Capturing the effects of coupon promotions in scanner panel choice models

The authors develop a logit modeling approach, designed for application to UPC scanner panel data, to assess the effects of coupon promotions on consumer brand choice. The effects of coupon promotions are captured via two measures: the prevailing level of availability and the prevailing face value of coupons for each brand. Both of these measures are derived from coupon redemptions of a separate sample of households. The approach captures both the advertising effect and the price discount incentive of a coupon. It also avoids drawbacks of previous choice models which have incorporated coupon effects by subtracting the value of a redeemed coupon from the price of the brand purchased. The authors illustrate their modeling approach on data for two product categories: catsup (light coupon usage) and liquid laundry detergent (heavy coupon usage). Findings are reported for coupon users and non‐users as well as across latent segments.