Coupon Redemption in Food and Beverage Businesses: Situational Effects of In-Vehicle Scenarios

Abstract

This study adopted discrete choice modeling to examine the effects of a set of situational factors on consumers’ redemption of coupons in food and beverage businesses. The situational factors delineate a multitude of in-vehicle scenarios in which consumers expressed their preferences for five types of coupons displayed on their smartphone. Controlling for the socio-demographics of respondents and coupon attributes, we found that almost all situational factors which characterized the in-vehicle scenarios, including weather, temperature, time of driving, and driving companion, have significant effects on the likelihood of coupon redemption. The situational effects become evident when consumers choose among different types of coupons rather than simply accepting or rejecting a single coupon. Consumers also make reference to corresponding consumption activities (dining, drinking, takeaway) when deciding to redeem coupons. The study results suggest that firms should take into account situational factors when deciding where, when, and to whom a coupon should be distributed. This dynamic approach can help nudge consumers toward accepting a specific coupon with a particular discount in a particular situation.