P&G RIVALS CLEAN UP IN COUPON TEST: STUDY

RICHARD TURCSIK

DALLAS -- Consumers in upstate New York are switching from Procter & Gamble brands to competitors that still offer coupons, it was revealed during a "state of the industry" report at the Chicago-based Association of Coupon Professionals annual fall conference here.

"We did a sample of seven retailers in the upstate New York area. Then we looked at [P&G] competitors," said Sharon Joyner-Payne, marketing services manager at Inmar Enterprises, Winston-Salem, N.C., who presented the report. "When we compared the first quarter of 1996 to the third quarter of 1996, we found that all but one competitor showed an increase in their redemptions from first quarter to third quarter, and only two of those had significant increases in [coupon] distribution," she explained.

Joyner-Payne noted that some of the manufacturers, who were not named, saw increases in redemption as high as 48%.

"We can conclude that consumers in the upstate New York area are choosing to buy products supported by coupons," she said.

As reported, in February Procter & Gamble, Cincinnati, said it was discontinuing coupons in the Buffalo, Rochester and Syracuse markets in an effort to prove that coupons are an expensive and wasteful promotional practice.

However, many consumers in the region are staunchly in favor of coupons.

Joyner-Payne said the future still looks bright for coupons, although a movement toward more targeted couponing vehicles is expected to continue, especially in account-specific marketing. She said growth will continue in the in-ad and in-store frequent shopper coupon arenas, as well as on the Internet.

She noted that 27.3% of coupon users said they currently receive discounts through frequent shopper programs. While this area is expected to continue to grow, Joyner-Payne cautioned that with a traditional in-ad coupon, only shoppers who want the discount will clip the coupon, while electronic discounts are frequently automatically applied to every shopper, even those who are not expecting or do not want the discount.

Noting that only shoppers who have a dog will clip dog food coupons, Joyner-Payne said the industry has been giving too much play to the low redemption rate of coupons, which is often cited at about 2%.

Joyner-Payne said the typical coupon user is not a little old lady, but is usually a consumer under age 60. Thirty percent have a household income greater than $50,000.

She noted that over 3,000 manufacturers offer coupons and 161 did so for the first time in 1995.

Even P&G, which has stated it despises coupons, has said in a published report that it will broaden the use of an electronic checkout coupon, and had planned to increase the distribution of coupons for its laundry detergents in the Phoenix and Tucson markets, she said.