Coupons are a favorite promotion tool of consumer packaged goods companies such as Proctor & Gamble and Unilever. How does the couponing work, and what are the advantages for using different types of coupons?

What will be an ideal response?

A coupon is a printed certificate that entitles the bearer to a price reduction or some other special consideration for purchasing a particular product or service. In the United States, marketers rely heavily on newspapers to deliver coupons. Most of the coupons are distributed in a printed ride-along vehicle referred to as a "free-standing insert (FSI)." "On-pack coupons" are those that are attached to, or part of, the product package; they can frequently be redeemed immediately at checkout. "In-pack coupons" are placed inside the package. Coupons have flexibility since they can also be handed out in stores, offered on a self-service basis from on-shelf dispensers, delivered to homes by mail, or distributed electronically at the checkout counter. Also, the number of coupons distributed via the Internet is growing. "Cross coupons" are distributed with one product but redeemable for a different product. The United States leads the world in the number of coupons issued by a wide margin. The goal of couponing is to reward loyal users and stimulate product trial by nonusers. In the EU, couponing is widely used in the United Kingdom and Belgium. Couponing is not as prevalent in Asia where saving face is important. Although Asian consumers have a reputation for thriftiness, some are reluctant to use coupons because doing so might bring shame upon them or their families. Thus, couponing also depends on the culture of a particular country. There are also regulations in many countries pertaining to the use of coupons by manufacturers.