DistinguishingCouponPronenes From Value Consciousness an Acquisition-Transaction Utility Theory Perspective

Dorjiald R. Lichtenstein,.Richard G. Netemeyer, & Scot Burton

Distinguishing Coupon PronenessFrom Value Consciousness: AnAcquisition-Transaction Utility

Theory PerspectivePrevious research on coupon proneness has measured the construct only in behavioral terms (i.e., con-sumers who are more responsive to coupon promotions are coupon prone). On the basis of the studypremise that at least one other psychological construct, value consciousness, underlies the behavior ofredeeming coupons, the authors argue that coupon proneness should be conceptualized and measuredat a psychological level and treated as one construct that affects coupon-responsive behavior rather thanas isomorphic with the behavior. They offer conceptual definitions of both coupon proneness and valueconsciousness and make a theoretical distinction based on acquisition-transaction utility theory. Eighthypotheses that reflect theoretical differences between the two constructs are proposed and tested. Re-sults support the study premise that coupon-responsive behavior is a manifestation of both value con-sciousness and coupon proneness.

COUPONS give consumers opportunities to obtainpromoted products at reduced prices. Because these

reduced prices are in the form of a coupon, individ-uals who respond to coupon offers have been referredto as "coupon prone" consumers or, more generally,"deal prone" consumers. Most research involving dealproneness has measured the construct in behavioralterms; consumers who act on deals (e.g., coupons) aremore deal prone (e.g., Blattberg et al. 1978; Dodson,Tybout, and Stemthal 1978; Hackleman and Duker1980; Henderson 1985; Massy and Frank 1965;Montgomery 1971; Narasimham 1984; Schiffman andNeiverth 1973; Webster 1965). A major premise ofour research is that for some consumers, the concep-tually related but distinct psychological construct of

Donald R. Lichtenstein is Assistant Professor, College of BusinessAdministration, University of Colorado. Richard G. Netemeyer and ScotBurton are Assistant Professors, Department of Marketing, Louisiana StateUniversity. The authors are grateful for the helpful comments of BillBearden, Ed Blair, Terry Shimp, and three anonymous JM reviewers.

"value consciousness" at times may also underlie thebehavior of responding to coupon promotions, sug-gesting that coupon proneness should not be equatedwith coupon-redemption behavior.

"•rollowing the conceptualization of Monroe andPetroshius (1981), we can define value as the ratio ofquality to price. As coupon offers involve a lesser out-lay of money, some consumers may redeem couponsbecause of the increase in value rather than becauseof a proneness to respond due to the reduced pricebeing offered in coupon form. Consequently, whenthe construct of coupon proneness is measured strictlyin behavioral terms, coupon proneness is confoundedwith the correlated construct of value consciousness.Hence, we argue that coupon proneness should not beconceptualized as isomorphic with coupon-respon-siveness behavior, but rather should be conceptual-ized and measured at a psychological level as onlyone construct that affects the behavior of redeemingcoupons. We employ acquisition-transaction utilitytheory (Thaler 1983) as a paradigm for investigatingthe relationship between coupon proneness and one

54 / Journal of Marketing, July 1990Journal of MarketingVol. 54 (July 1990), 54-67

other psychological construct, value consciousness,which is also hypothesized to underlie coupon-re-demption behavior.

Conceptual BackgroundTwo serious problems in dealing research are the lackof a conceptual definition of deal proneness and thefact that conclusions are based solely on empirical dataanalysis with no prior theoretical framework (Raju andHastek 1980). As a consequence, explanations of con-sumer response to deals at the individual level usuallyare not provided, and hence little is known of the psy-chological processes underlying dealing behavior.Similarly, some researchers have noted that little re-search has examined dealing behavior from the con-sumer's viewpoint in an effort to understand the be-havior for its own sake (Price, Feick, and Guskey-Federouch 1988; Shimp and Kavas 1984).

We contend that coupon-redemption behavior is afunction of value consciousness as well as couponproneness. Thus, when the construct of coupon prone-ness is grounded in behavioral terms of "does or doesnot act on a given coupon offer," it is confoundedwith the correlated construct of value consciousness.Previous research supports this position. For example,some researchers have argued that a price reductionin coupon form may produce an increase in consumerresponse beyond that expected from an equivalent lowerprice (Raju and Hastek 1980; Schindler and Rothaus1985). Consistent with this contention is Cotton andBabb's (1978) finding that a price discount in couponform produced a significantly larger increase in salesthan an equivalent lower price. Nevertheless, quantitydemanded was higher at lower prices, as would beexpected by the negative relationship between priceand quantity demanded. This observation suggests thatclassifying all individuals who respond more heavilyto coupons as coupon prone is an overstatement. Thatis, many of these coupon-redeeming individuals maybe more "value prone" than "coupon prone," and thuswould have responded similarly had the product beenoffered at the equivalent lower price.

Because coupon proneness and value conscious-ness have in common a focus on paying lower prices,these constructs have many similar implications formarketplace responses. However, because there arecharacteristics that these two constructs do not share,they also carry some different implications for mar-ketplace responses. The primary objective of our ar-ticle is to discriminate between the constructs "valueconsciousness" and "coupon proneness" on the basisof acquisition-transaction utility theory (Thaler 1985)and to demonstrate the differential relationships of thesetwo constructs with cognitive and behavioral con-structs.

We begin by offering conceptual definitions ofcoupon proneness and value consciousness. Then weoffer a theoretical distinction between the two con-structs based on utility theory concepts (Thaler 1985).A hypothesis for our major premise (i.e., coupon re-sponsive behavior is a manifestation of value con-sciousness as well as coupon proneness) is proposedand tested via covariance analyses examining the ef-fect of value consciousness of self-reported couponredemption behavior (controlling for the effects ofcoupon proneness). Next, seven additional hypotheseson the relationship between value consciousness, cou-pon proneness, and various related cognitive and be-havioral marketplace responses are proposed and tested.Finally, we discuss results and limitations along withimplications for marketers and future research needs.

Coupon Proneness

Because coupon proneness cSan be conceptualized asone dimension of deal proneness, previous character-izations of deal proneness appear to be an appropriatestarting point for developing a conceptual definitionof coupon proneness. Prior research suggests that dealproneness can be defined in terms of a general prone-ness to respond to promotions predominantly becausethey are in deal form. For example, Hackleman andDuker (1980) suggest that a deal prone consumer isone who is more likely to find a deal "impossible torefuse." Thaler (1983) suggests that deal prone indi-viduals are likely to be those who purchase somethingbecause it is a deal, only to have it lie around thehouse and never be used. Henderson (1988) suggeststhat consumers who operate on the behavioral mech-anism of coupon primacy have a predominant "com-mitment to a coupon" that prevents attention to factorssuch as lowest price or best value for the money. Asa result, many of these consumers may be implicitlymore likely to make their purchase decisions on whichbrand to buy outside the store at the time they clip acoupon. Similarly, Zeithaml (1988) found a segmentof consumers who define value in terms of "sales,""specials," and "ability to use coupons."' She foundthat many of these consumers use coupons as extrinsicsignals of good deals without actually comparing thereduced price of the couponed brand with the prices

'Zeithaml's use of the term "value" is not isomorphic with the term"value consciousness" used here in that it has a different "systematicmeaning" (cf. Peter 1981). Zeithaml uses the term "value" in a verybroad sense to reflect the many different things consumers "value"(place importance on) in a purchase transaction, which include theproduct as well as such factors as the shopping experience, interper-sonal contact, and the ability to use coupons. As noted in the intro-duction, the term "value consciousness" has a more narrow meaningconsistent with the definition of Monroe and Petroshius (1981) andpertains to a specific concern for "value" received (defined in termsof need-satisfying properties of the product) for price paid. This def-inition is also consistent with value as defined in acquisition-trans-action utility theory (Thaler 1985).

Distinguishing Coupon Proneness From Value Consciousness / 5 5

of other hrands. Operating in such a manner suggeststhat these consumers may rely "mindlessly" on cou-pons as indicators of good deals (Henderson 1988;Zeithaml 1988).

These characterizations suggest that deal proneconsumers may perceive a deal as an end in itself aswell as a means to an end. Therefore, deal pronenessis defined as an increased propensity to respond to apurchase offer hecause the form of the purchase offerpositively affects purchase evaluations. Similarly,coupon proneness can he defined as an increased pro-pensity to respond to a purchase offer hecause thecoupon form of the purchase offer positively affectspurchase evaluations.

Value Consciousness

Perceived value has heen defined as "the consumer'soverall assessment of the utility of a product hased onwhat is received and what is given" (Zeithaml 1988,p. 14). On the assumption that for most people priceand quality are the most salient "give and get" com-ponents, we define value consciousness as a concemfor paying low prices, suhject to some quality con-straint.^ This definition is consistent with the defini-tion of Monroe and Petroshius (1981; i.e., the ratioof quality to price), the findings of Zeithaml (1988)on the meaning of value used hy many consumers (i.e.,"the quality I get for the price I pay"), and severalother definitions of value that appear in the literature(cf Zeithaml 1988).

A Theoretical Distinction Based on UtilityTheory

Thaler (1985) postulates two types of utility associ-ated with consumer purchases (see equation 1). Thefirst is acquisition utility, which'represents the eco-nomic gain or loss from a purchase transaction. Spe-cifically, acquisition utility is equal to the utility de-rived from the purchased good minus the price paidfor the good (see equation 2). The second type of util-ity—transaction utility—represents the pleasure (ordispleasure) associated with the financial terms of thedeal per se and is equal to the intemal reference price(i.e., the mentally stored price against which otherprices are judged; Rosch 1975) minus the purchaseprice. The theoretical importance of the role of the

^The "subject to some quality constraint" part of the definition (ratherthan a strict ratio of quality to price) is used to suggest that though aconsumer recognizes one brand as offering the highest ratio of qualityto price, it may not necessarily be the best value for the particularconsumer. The quality of the product may exceed the consumer's spe-cific quality requirements. Therefore the highest value for the partic-ular consumer is viewed as the lowest priced product that meets hisor her speciflc quality requirements.

intemal reference price in affecting purchase evalua-tions cannot he overstated. That is, because purchaseevaluations are hypothesized to he related positivelyto the amount hy which the intemal reference priceexceeds the purchase price, anything that affects theintemal reference price necessarily affects purchaseevaluations (Lichtenstein and Bearden 1989; Thaler1985; Winer 1986).

Total Utility = Acquisition Utility + Transaction Utility (1)

Total Utility = (Utility of Purchased Good

- Purchase Price) (2)

+ (Intemal Reference Price

— Purchase Price)

Equation 2 indicates that, with purchase price heldconstant, acquisition utility is a function of the utilityof the purchased good, whereas transaction utility isa function of the intemal reference price. The utilityof the purchased good is determined hy the inherentneed-satisfying properties of the product (Thaler 1983).The hasis of the intemal reference price is less clear.The intemal reference price may conespond to someaverage price of similar products (Emery 1970), theprice of the most frequently purchased hrand (Gahorand Granger 1961), the price most frequently charged(Olander 1970), the price last paid, the huyer's notionof a fair price (Monroe 1973), the most recently oh-served price (Winer 1986), the lowest market price(Lichtenstein and Bearden 1989), or other possihlehases (cf. Klein and Oglethorpe 1987).

Zeithaml and Graham (1983) suggest that thoughthe mechanisms by which consumers form intemalreference prices are largely unknown, most researchis based on the assumption that intemal reference pricesare derived from (1) experience with the product or(2) readily accessihle information from the environ-ment. With purchase price held constant, if the inter-nal reference price is hased largely on the perceivedutility of the product, transaction utility will he af-fected by acquisition utility (see equations 1 and 2).In this case, coupons provide increases in transactionutility (and, hence, "good deals") otily if they are usedfor hrands that offer higher levels of perceived need-satisfying ability. In contrast, if the intemal referenceprice is hased primarily on extemal price information(e.g., normal prices charged), transaction utility is lessdependent on acquisition utility. In this case, the useof a coupon represents a "good deal" (via transactionutility) for any hrand because it increases the amounthy which the (extemal price-based) intemal referenceprice exceeds the purchase price.

A hasic premise underlying our research is that in-dividuals whose value perceptions are largely affectedhy the inherent need-satisfying ahility of the product(acquisition utility) are more likely to he value con-

56 / Journal of Marketing, July 1990

scious than coupon prone. Conversely, individualswhose value perceptions are more dependent on trans-action utility (and less dependent on acquisition util-ity) are more likely to be coupon prone. The basis forthis premise is the relationship between the conceptualdefinitions of value consciousness and coupon prone-ness and their differential relationships with the twotypes of utility. Because the coupon form of the pricedeal (i.e., a coupon vs. a lower offering price) affectsthe internal reference price (and hence transactionutility), but does not affect the inherent need-satis-fying ability of the product (and hence acquisitionutility), the value perceptions of coupon prone con-sumers are more likely to be affected by transactionutility than are the value perceptions of value con-scious consumers. Conversely, because value con-sciousness (i.e., a low price subject to some qualityconstraint) explicitly addresses the inherent need-sa-tisfying properties of the product, and thus is moreclosely allied with acquisition utility, value percep-tions of value conscious consumers are more likely tobe affected by this type of utility than are value per-ceptions of coupon prone consumers. Consistent withthis perspective, eight hypotheses pertaining to dif-ferential effects of value consciousness and couponproneness on consequences of interest are offered.

Hypotheses

Differential Relationship With Coupon-Responsive Behavior

We contend that coupon-responsive behavior is amanifestation of value consciousness as well as cou-pon proneness. If this contention is valid, value con-sciousness should explain significant variation in cou-pon-responsive behavior after one accounts for thevariation in coupon-responsive behavior explained bycoupon proneness. Hence:

H,: Value consciousness explains a significant amount ofvariation in coupon redemption behavior after one ac-counts for the variation in coupon redemption behav-ior explained by coupon proneness.

To assess further the validity of the proposed ac-quisition-transaction-utility-based delineation betweenvalue consciousness and coupon proneness, we offerseven additional hypotheses on cognitive and behav-ioral consequences of interest. The rationale for thesehypotheses is drawn directly from the preceding dis-cussion on acquisition and transaction utility theory.Several of the hypotheses pertain to constructs centralto the deal proneness literature (e.g., brand loyalty,deal retraction), but all hypotheses on differences be-tween coupon proneness and value consciousness have

theoretical grounding in Thaler's (1985) utility the-ory.^

Differential Relationships With CognitiveConstructs

H2a and H2b propose different relationships betweenvalue consciousness and coupon proneness and en-during and situational involvement. Bloch and Richins(1983) have distinguished between enduring involve-ment and situational involvement. Enduring involve-ment is ongoing and more likely to be related to theproduct class, whereas situational involvement is tem-porary and more likely to be due to a particular prod,uct-related situation. Value conscious consumers aremore concerned about acquisition utility (the inherentneed-satisfying properties of the product).'* This focusimplies that value conscious consumers are concernedabout the product's value in use over time, which isa stable characteristic of the product. Thus, value con-scious individuals are likely to have greater enduringinvolvement with the product. Conversely, couponprone individuals are viewed as having more involve-ment in any purchase situation or specific transaction,which includes acting on a coupon. This greater focuson transaction utility should result in greater situa-tional involvement for coupon prone consumers.

H2a: The correlation between value consciousness and en-during involvement with purchased products is greater(more positive) than the correlation between couponproneness and enduring involvement with purchasedproducts.

H2b: The correlation between coupon proneness and sit-uational involvement is greater (more positive) thanthe correlation between value consciousness and sit-uational involvement.

H3a and H3b pertain to consumers' price and prod-uct knowledge. For at least two reasons, value con-scious individuals should have more accurate price andproduct knowledge for purchased goods than couponprone individuals. First, because coupon prone con-

^These additional hypotheses (i.e., Hj-Hg) are not considered to beexhaustive of all possible acquisition- and transaction-utility-baseddifferences between the value consciousness and coupon pronenessconstructs. Rather, these hypotheses are offered to illustrate the con-ceptual differences between these two constructs, and as such are as-sumed to represent only a subset of those that might have been of-fered.

'In the rationale for the hypotheses, consumers may seem to be po-sitioned as either "value conscious" or "coupon prone." It is not ourintent to imply a mutually exclusive relationship between the two.Rather, we feel that a given consumer may have high degrees of bothvalue consciousness and coupon proneness, low degrees of both valueconsciousness and coupon proneness, or a high degree of one but notthe other. Hypotheses are stated and tested in a manner consistent withthis view. In the discussion of hypotheses, language suggesting thatconsumers are either coupon prone or value conscious is used to sim-plify the rationale for hypothesized relationships.


sumers are influenced more by transaction utility, theyare expected to purchase a wider variety of brands thanvalue conscious individuals. If fewer brands are pur-chased by value conscious consumers, greater pur-chase repetition may result in more accurate price andproduct knowledge for products they purchase. Sec-ond, the (predicted) higher level of enduring involve-ment with the product (H2a) for value consciousconsumers also suggests that they may be moreknowledgeable than coupon prone consumers aboutthe products they purchase.

H3a: The correlation between value consciousness and, product knowledge of purchased products is greater

(more positive) than the correlation between couponproneness and product knowledge of purchased prod-ucts.

H31,: The correlation between value consciousness and priceknowledge of purchased products is greater (morepositive) than the correlation between coupon prone-ness and price knowledge of purchased products.

Tabuer (1972) notes that an implicit, ego-centeredpurchasing competition appears to occur between buyers(i.e., a concern for paying lower prices for productsthan other consumers pay). H4 pertains to this shop-ping competitiveness and again is based on the prem-ise that value conscious consumers are more con-cerned with acquisition utility than are coupon proneconsumers, and coupon prone consumers are moreconcerned with transaction utility than are value con-scious consumers. Based on Thaler's (1985) concep-tualization, acquisition utility is a function of value inuse whereas transaction utility is a function of the in-ternal reference price. Because what other consumerspay is expected to affect the internal reference pricebut not value-in-use perceptions, coupon pronenessshould be correlated more highly with shopping com-petitiveness than is value consciousness. That is, aconsumer may find out that he or she paid a higherprice than others paid, but this knowledge does notaffect the inherent need-satisfying (value-in-use)properties of the product in relation to the price paid(i.e., acquisition utility). However, finding out thatsomeone paid less serves to lower the internal refer-ence price, which negatively affects transaction util-ity.

H4: The correlation between coupon proneness and shop-ping competitiveness is greater (more positive) thanthe correlation between value consciousness andshopping competitiveness.

The rationale for H5, concerning consumer eval-uations associated with deal retraction, is again linkedto utility theory. Rothschild and Gaidis (1981) statethat primary reinforcers (the product) have intrinsicutility whereas secondary reinforcers (e.g., coupons)have no such utility. Our contention is that this pri-mary-secondary ordering is more applicable for value

conscious than for coupon prone individuals. In com-parison with value conscious individuals, coupon proneindividuals are more likely to view coupons as pri-mary reinforcers whereas the product itself is morelikely to take on the role of a secondary reinforcer.In terms of utility, value conscious consumers are rel-atively more likely than coupon prone consumers toperceive acquisition utility as primary and transactionutility as secondary. Coupon prone consumers are rel-atively more likely than value conscious consumers toperceive transaction utility as primary and acquisitionutility as secondary. Sawyer and Dickson (1984, p. 14)state that "care must be taken so that eventually theproduct is the reinforcing stimulus rather than the salespromotion," indicating that the criterion of primaryversus secondary reinforcement is not fixed, but ratherdepends on the perceptions of the consumer. Hence,we posit that the product is more likely to be the pri-mary stimulus for the value conscious consumer andthe coupon is more likely to be the primary stimulusfor the coupon prone consumer. Because the couponis more likely to be the primary reason for the pur-chase for coupon prone consumers, deal retractionshould have a more negative impact on those con-sumers.

H5: When a deal is retracted, the correlation between cou-pon proneness and unfavorable purchase evaluationsis greater (more positive) than the correlation betweenvalue consciousness and unfavorable purchase eval-uations.

Acquisition and transaction utility also seeminglyhave implications for the marginal utility of additionalpurchase quantities. We propose that diminishingmarginal utility of a commodity should be experi-enced earlier by value conscious individuals becausetheir utility is derived primarily from use situations,and one can use only so much of any commodity.Because transaction utility is more important for thecoupon prone consumer than for the value consciousconsumer, and the number of transactions a consumercan make is limited only by his or her budget, mar-ginal utility should decline more slowly for couponprone than for value conscious consumers.

Hg: The correlation between coupon proneness and mar-ginal utility of additional purchase quantities is greater(more positive) than the correlation between valueconsciousness and marginal utility of additional pur-chase quantities.

Differential Relationships With BehavioralConstructs

Much of the previous research on dealing behaviorhas addressed the relationship between purchases ondeed and brand loyalty. As would be expected, therelationship between responding to deals and repeatpurchases of the same brand usually has been negative


(cf. Schiffman and Neiverth 1973). When consumerswho redeem coupons are differentiated as being valueconscious or coupon prone, coupon prone individualsshould exhibit less brand loyalty than value consciousindividuals. These hypothesized relationships are againbased on the differences between acquisition andtransaction utility. Acquisition utility should covarymore strongly with the brand than transaction utility,whereas transaction utility should covary to a greaterdegree with the coupon. That is, both terms associatedwith transaction utility (see equation 2) are affectedby a coupon (i.e., a coupon serves to lower the pur-chase price and to reinforce perceptions of a highernormal price, thus leading to a higher internal refer-ence price). In contrast, only the purchase price termassociated with acquisition utility is affected by a cou-pon; need-satisfying ability is brand specific and is notaffected by a coupon. Because of the greater impactof deals on transaction utility, coupon proneness shouldbe related more negatively to brand loyalty.

H7: The correlation between coupon proneness and brandloyalty is less (more negative) than the correlation be-tween value consciousness and brand loyalty.

Finally, we hypothesize that differences in the im-portance of acquisition and transaction utility betweenvalue conscious and coupon prone consumers also mayaffect aspects of consumer information search. Forexample, because coupon prone consumers' valueperceptions are seen as infiuenced more by transactionthan by acquisition utility, and because transactionutility is tied exclusively to price information (i.e.,internal reference price and purchase price), couponprone consumers are less likely to perceive benefit fromsearching for quality or "value for the money" infor-mation about brand altematives. Value conscious con-sumers are more likely to consider "value in use" inaddition to purchase price and thus are more likely tosearch for "value for the money" information. Con-sumer Reports magazine has been widely recognizedas a source of "value for the money" information (cf.Curry and Faulds 1986). Consequently, we hypoth-esize that both the behavior of reading Consumer Re-ports and the perception of the value of the infor-mation provided by Consumer Reports are correlatedmore positively with value consciousness than withcoupon proneness.

Hgj: The correlation between value consciousness andreadership of Consumer Reports is greater (more pos-itive) than the correlation between coupon pronenessand readership of Consumer Reports.

Hgb: The correlation between value consciousness and theperception of usefulness of information provided byConsumer Reports is greater (more positive) than thecorrelation between coupon proneness and the per-ception of usefulness of information provided byConsumer Reports.

MethodTo test the hypotheses, we developed measures ofcoupon proneness (CP) and value consciousness (VC)using the scale development procedures recommendedby Churchill (1979). For constructs hypothesized tobe differentially related to CP and VC, we drew mea-sures from the literature and also used the followingpretest procedures to generate and purify items.

Pretest

Consistent with the procedures of Churchill (1979), apool of 66 items was generated to refiect the concep-tual definitions of the value conscious and coupon proneconstructs (33 items each). To assess the face validityof the items, a judgment sample of three marketingfaculty members and two marketing PhD students weregiven the conceptual definitions and asked to cate-gorize each statement as VC, CP, or not applicable.An a priori item-retention decision rule was usedwhereby only items for which at least four of five judgesagreed on the category were retained (cf. Bearden,Netemeyer, and Teel 1989). This decision rule re-sulted in the retention of 43 items (18 for VC and 25for CP).

In a procedure similar to those followed in themarketing literature (e.g., Zaichkowsky 1985), the facevalidity of this reduced set of items next was assessedby five additional judges (again, three marketing fac-ulty members and two maiketing PhD students). Thesejudges were asked to rate each item as clearly rep-resentative, somewhat representative, or not represen-tative of the constructs. Only items that were classi-fied as clearly or somewhat representative by at leastfour of five judges were retained, resulting in 15 and25 items for VC! and CP, respectively.

These remaining items were interspersed ran-domly throughout a questionnaire that was adminis-tered to a pretest sample of 263 graduate and under-graduate business students. Two sets of analyses wereperformed on the data. In the first, the item-to-totalcorrelations were examined. Only items with cor-rected item-to-total correlations greater than or equalto .40 were retained (Saxe and Weitz 1982). This pro-cedure resulted in the retention of seven items for VCand eight items for CP. The items representing the VCand CP constructs are listed in Appendix A.'

'In an initial version of the manuscript, the CP construct was labeledas deal proneness rather than coupon proneness. However, scale pu-HHcation procedures resulted in a final scale consisting primarily ofcoupon-related items. Therefore, on the basis of reviewer comments,we defined the construct more narrowly as coupon proneness and de-leted four items on grounds of content validity (i.e., they referred torebates, specials, etc., in addition to coupons).


In the second set of analyses on these data, weexamined the reliability and structure of the remainingitems by using confirmatory factor analysis and in-ternal consistency reliability. To determine the di-mensionality of the measures, we compared null andone-factor models with the hypothesized correlated two-factor structure using LISREL VI (Joreskog and Sorbom1983). The chi square values were 1813.60 (d.f. =104, p < .01) for the null model, 829.65 (d.f. = 90,p < .01) for the one-factor model, and 440.33 (d.f.= 89, p < .01) for the hypothesized correlated two-factor structure. Though significant, the correlated two-factor structure offered a substantial improvement infit over both the one-factor model (x^ difference =389.32, d.f. = 1, p < .01) and the null model (x^difference = 1373.27, d.f. = 15, p < .01), thus of-fering support for the dimensionality and discriminantvalidity of the VC and CP measures (Anderson andGerbing 1988; Bagozzi and Phillips 1982). In addi-tion, all indicator t-values associated with the corre-lated two-factor model were significant at the .01 leveland the internal consistency estimates (i.e., constructreliability; Fomell and Larcker 1981) for the seven-item VC and eight-item CP measures were .80 and.88, respectively.

To further establish the discriminant validity be-tween VC and CP, we conducted several additionaltests. First, the discriminant validity between two fac-tors is supported if the phi correlation between thefactors ((})) is less than one (Bagozzi 1980). For theVC and CP measures, this condition was satisfied (<})= .36, S.E. = .04). A complementary assessment ofdiscriminant validity involves assessment of whetherthe confidence interval (plus or minus two standarderrors) around the maximum likelihood phi correla-tion includes a value of 1.0. If not, discriminant va-lidity is supported (Anderson and Gerbing 1988). Thiscondition was also satisfied (.28 < <|) < .44). Last,the dimensionality and discriminant validity betweentwo measures can be examined by comparing the vari-ance explained in the two constructs with the squareof the correlation between the two constructs. If thevariance explained estimates are greater than the squareof the correlation between the constructs, discriminantvalidity is supported. The variance explained in VCwas .37 and the variance explained in DP was .48.Both of these estimates were greater than <t>̂ whichequaled .13. In sum, all three tests support the dis-criminant validity of the VC and CP measures.

Measures of cognitive and behavioral constructshypothesized to be differentially related to VC and CPalso were pretested in this administration. We as-sessed reliability estimates for these measures by us-ing coefficient alpha, and modified the scale itemswhere necessary.

Maiti Study

A convenience sample of 350 nonstudent adults froma medium-size SMSA was employed to test the hy-pothesized relationships. Forty-three percent of the re-spondents were men and 69% were married. The av-erage respondent had some college education and 40%were college graduates. The median age and house-hold income categories were 35 to 44 years and $30,000to $39,999, respectively.

With data from this study, we again used confir-matory factor analysis and internal consistency esti-mates to evaluate the structure and reliability of theVC and CP measures. The chi square values associ-ated with a null and one-factor solution were 2974.12(d.f. = 104, p < .01) and 1124.11 (d.f. = 90, p <.01), respectively. For the hypothesized correlated two-factor structure, the chi square value was 559.55 (d.f.= 89, p < .01). The difference in chi square valuesbetween the two-factor and one-factor structure wassignificant (564.56, d.f. = 1, p < .01), as was thedifference between the two-factor structure and the nullmodel (2414.57, d.f. = 15, p < .01). These resultssupport the modeling of a two-factor structure. Con-sistent with results of the pretest, all t-value indicatorsfor the two-factor structure were significant (p < .01)and the construct reliability estimates were .80 and.88 for VC and CP, respectively. Item-to-total cor-relations were above .40 for all items across both con-struct measures. The correlation between the VC andCP measures was significantly less than one (<t> = .24,S.E. = .04) and the confidence interval around phidid not include a value of one (.16 < <|) < .32), sup-porting the discriminant validity of the two constructs.In addition, the variance-extracted estimates for theVC and CP measures were .37 and .48, respectively,and were both greater than <|)̂ of .058. In sum, despitethe differences in subject pools (i.e., students andnonstudent consumers), these results mirror those ofthe pretest.

Multi-item measures of the constructs hypothe-sized to be differentially related to VC and CP weregathered. Some of the measures were established scalesused in previous research and others were constructedspecifically for use in our study. All measures wereassessed for face validity and reliability (coefficientalpha) in the pretest procedures described previously.Sample items for each of these measures are listed inAppendix B. For all of the constructs (i.e., VC, CP,and constructs hypothesized to be differently relatedto VC and CP), scales were coded/recoded so thathigher scores refiect higher levels of the construct. In-ternal consistency estimates for the measures are re-ported in Table 2. In addition to these items, a generalmeasure of coupon-redemption behavior, as well as


four product-category-specific measures (toothpaste,laundry detergent, deodorant/antiperspirant, andshampoo), was employed.

ResultsTest of Differential Relationship With Coupon-Responsive Behavior (H-,)

Based on the contention that VC and CP are distinctconstructs that both affect coupon-responsive behav-ior, the first hypothesis states that VC explains vari-ation in coupon-redemption behavior after one ac-counts for variation explained by CP. To test thishypothesis, five hierarchical regression analyses wereperformed. In the first analysis, the dependent vari-able was the general self-report measure of couponredemption behavior ("In the past month, on whatpercentage of your grocery shopping trips did you re-deem coupons?" with seven response categories rang-ing from "less than 10% of my shopping trips" to "91-100% of my grocery shopping trips"). On the firststep the variance in coupon redemption behavior ex-plained by CP was assessed. VC was entered on thesecond step, thus permitting a test of whether addi-tional variance in coupon redemption behavior can beexplained by VC. The remaining four hierarchicalanalyses were identical to the first except that themeasures of coupon redemption behavior were prod-uct-category-specific (i.e., toothpaste, shampoo,laundry detergent, and deodorant). For example, thetoothpaste coupon redemption behavior measure read,"Approximately what percent of the time do you usea coupon to purchase toothpaste?", for which subjects

provided responses ranging from 0 to 100%. Resultsof these analyses are reported in Table 1.

For each of the five analyses, CP is a significantpredictor (p < .01) of coupon redemption behavior.Also, in all five analyses, VC explains a significantamount of variation (p < .01) in coupon redemptionbehavior after we account for the variation explainedby CP. These results provide consistent support forthe major study premise in Hi that coupon redemptionbehavior is a manifestation of VC, as well as CP.

Test of Hypotheses on CognitiveConsequences

All remaining hypotheses were tested by performingt-tests for the difference in correlations within the samesample (Cohen and Cohen 1975). Results on the dif-ferential relationships between cognitive (H2-H6) andbehavioral constructs (Hv-Hg) are reported in Table 2.

H2a predicts that the correlation between VC andenduring involvement with purchased products is morepositive than the correlation between CP and enduringinvolvement with purchased products. The respectivecorrelations are .26 and .12 (t = 2.27, p < .05), thusoffering support for H2a. H2b, which predicts that thecorrelation between CP and situational involvement ismore positive than the correlation between VC andsituational involvement, also is supported (r = .60 andr = .40, respectively; t = 4.03, p < .01).

The third hypothesis predicts a more positive cor-relation between VC and product knowledge and be-tween VC and price knowledge than between CP andthese two types of knowledge. The correlation be-tween VC and product knowledge is .43, whereas thecorrelation between CP and product knowledge is - .01

TABLE 1Effect of Value Consciousness on Coupon Redemption Behavior After Controlling

for Coupon Proneness"

Dependent Variable

General couponredemption

Coupon redemption.toothpaste

Coupon redemption.shampoo

Coupon redemption.laundry detergent

Coupon redemption.deodorant/antiperspirant

Beta

.50

.45

.89

.45

.42

Coupon Proneness

T-Value

10.84"=

9.36"=

7.95"=

9.48"=

8.70-=

Independent

R̂

25.4

20.2

15.5

20.7

18.0

Variables"

Value

Beta

.16

.22

.17

.22

.15

Consciousness

T-Value

3.41"=

4.52"=

3.42"=

4.60"=

2.98=

R̂

27.8

24.7

18.3

25.3

20.0'Degrees of freedom for the reduced model (i.e., coupon prone only) are 1,345; degrees of freedom for the full model (i.e., bothindependent variables) are 2,344.

""For all five dependent measures, coupon proneness was entered into the hierarchical regression equation on the first step; valueconsciousness was entered on the second step,

"p < .01.


TABLE 2Results of Correlational Tests With Related Constructs

Construct

Cognitive ConstructsH2a Enduring involvement''H2b Situational involvement"H3a Product knowledgeH3b Price kriowledgeH4 Shopping

competitivenessH5 Deal retractionHe Marginal utility

Behavioral ConstructsH7 Brand loyalty, scale

Behavioral'̂Toothpaste"Detergenf^Deodorant"Shampoo"

Hga Consumer Reportsreadership

Hsa Consumer Reportsinformation

No.Item

111142

533

511111

1

1

Reliability'

.90

.96

.77

.76

.63

.50

.80

.88—————

—

—

Hypothesis

VC > CPCP > VCVC > CPVC > CP

CP > VCCP > VCCP > VC

CP < VCCP < VCCP < VCCP < VCCP < VCCP < VC

VC > CP

VC > CP

Correlations

VC

.26"

.40"

.43"

.41"

.24"

.15".06

-.15"-.08-.10^

.01

.00-.ir

.15"

.20"

CP

.12"

.60"-.01

. 1 1 "

.31"

.29"

.19"

-.22"-.22"-.ir-.ir-.10°-.12"

.01

-.02

T-Value

2.2T4.03"7.69"5.13"

1.172.30°2.09°

1.132.25°

.161.88°1.58'.18

I.IT

3.52"

Result

SupportedSupportedSupportedSupported

Not supportedSupportedSupported

Not supportedSupportedNot supportedSupportedSupportedNot supported

Supported

Supported

"Pearson correlations are reported for all two-item measures.''Operationalized via 11 items from the revised Zaichkowsky Personal Involvement Inventory (McQuarrie and Munson 1987).'Response categories of 1 = less than 10%, 2 = 10-20%, 3 = 21-40%, 4 = 41-60%, 5 = 61-80%, 6 = 81-90%, 7 = 91-100%."p < .01.°p < .05.'p < .10.

(t = 7.69, p < .01) and the correlations between VCand price knowledge and CP and price knowledge are.41 and .11, respectively (t = 5.13, p < .01). Thus,both H3a and H3b are supported.

Only directional support is found for H4, whichpostulates a more positive correlation between CP andshopping competitiveness (.31) than between VC andshopping competitiveness (.24) (t = 1.17, n.s., H4unsupported). However, the correlation between CPand unfavorable deal-retraction-related evaluations isgreater than the correlation between VC and unfavor-able deal-retraction-related evaluations (.29 and .15,respectively, t = 2.30, p < .05), offering support forH5.

The sixth hypothesis pertains to the relationshipsof CP and VC with marginal utility. The correlationbetween CP and marginal utility of additional pur-chase quantities (.19) is significantly greater than thecorrelation between VC and marginal utility (.06), thusproviding support for Hg (t = 2.09, p < .05).

Tests of Hypotheses on BehavioralConsequences (Hj-Hg)

The seventh hypothesis predicts a more negative cor-relation between CP and brand loyalty than betweenVC and brand loyalty. To test this hypothesis, we em-ployed six different measures of brand loyalty: (1) afive-item brand loyalty scale (Jacoby and Chestnut

1978), (2) a single-item general behavioral scale (Raj1982), and (3) four single-item scales that assessedbrand loyalty in four individual product categories (Raj1982). Results pertaining to the relationships betweenbrand loyalty and VC and CP are mixed. Only direc-tional support is found for the multi-item scale (t =1.13, n.s.); however, for the single-item general be-havioral scale, the difference in correlations is statis-tically significant (t = 2.25, p < .05). For all fourproduct-category-specific brand loyalty measures (i.e.,toothpaste, detergent, deodorant, and shampoo), CPis more negatively correlated with brand loyalty thanis VC, and for the detergent and deodorant measures,these differences are significant (t = 1.88, p < .05;t = 1.58, p < .10, respectively). These results offergeneral support for H7.

Hga and Hgb pertain to the relationships betweenVC, CP, and Consumer Reports information. Hga pos-tulates that Consumer Reports readership would be morehighly correlated with VC than with CP. The corre-lations are .15 and .01, respectively (t = 2.22, p <.05), supporting H^. Hgb posits that VC would be morehighly correlated than CP with perceptions of the use-fulness of information provided by Consumer Re-ports. The respective correlations are .20 and — .02 (t= 3.52, p < .01), supporting Hgb. In sum, resultspertaining to these eight hypotheses support the prem-ise that CP and VC are distinct constructs with dif-


ferent implications for coupon-responsive behavior andother consumer marketplace responses.

DiscussionSummary and Implications of Results

Previous researeh on deal/coupon proneness has lackeda conceptual orientation and generally has employeda single-item behavioral measure. A variety of prob-lems have resulted. Many researchers have not seemedto recognize that coupon redemption behavior may bemotivated simply by the ratio of quality to purchaseprice and may have nothing to do with the couponform of the offer, and hence that coupon redemptionbehavior is not equivalent to the psychological con-struct of CP. Such problems may suggest alternativeinterpretations of empirical results. For example,Blattberg et al. (1978) hypothesized that consumerswho were the least deal prone did not own automo-biles, lived in apartments, had less income, had oneor more children under six years of age, and lived inhouseholds in which both spouses worked. If CP isconceptualized as a psychological state that is one an-tecedent of a consumer's response to a deal, such fac-tors probably are more accurately described as mod-erators of the relationship between CP and couponredemption behavior. That is, such factors do not lessenthe individual's level of CP, but affect the strength ofthe relationship between CP and the likelihood of act-ing on that proneness.

Confounding levels of abstraction (resulting frommeasuring the psychological construct of coupon/dealproneness in behavioral terms) and the use of single-item measures of coupon/deal, proneness may havecontributed to results that generally have been able toexplain less than 10% of the variance in behavioralresponse to coupons/deals. The need to measure ab-stract constructs with multi-item measures is well doc-umented. Single-item measures result in construct un-derrepresentation and/or contamination from otherconstructs (Churchill 1979). Such problems mirror thoseexpressed by Jacoby and Chestnut (1978) in arguingthat brand loyalty is a complex psychological con-struct that can never be accurately assessed or under-stood via pure behavioral measures.

The lack of conceptual definition and the accep-tance of a single-item behavioral measure probably alsohave served to retard the theoretical development ofcoupon proneness and, more generally, deal prone-ness. Shimp and Kavas (1984) note that though re-search has addressed the impact of deals on consumerchoice, brand switching, product sales, and marketshare, surprisingly little research has examined be-havioral response to deals at the individual level in anattempt to understand the behavior for its own sake.Similarly, Raju and Hastek (1980) have criticized dealproneness research generally for its lack of a theoret-

ical orientation, and specifically for its lack of a con-ceptual definition of the construct. On a broader level,Zeithaml (1984) has criticized price perception re-search for its lack of a theoretical orientation in de-veloping conceptual and operational definitions ofconstructs.

We attempt to address these problems and criti-cisms. We demonstrate that CP and VC are distinctconstructs that both underlie coupon redemption be-havior and that these constructs are related differen-tially to other constructs of interest. By hypothesizingthat CP and VC are two constructs that underlie cou-pon redemption behavior, the conceptual frameworksuggests that the more appropriate level of measure-ment of CP is the psychological, rather than the morecommon behavioral, level. In contrast to other re-searchers, we offer conceptual definitions of deal andcoupon proneness, which to our knowledge are thefirst proposed in the literature. The definitions areconsistent with the idea that purchase evaluations areenhanced by the form of the purchase offer per se,and are based on acquisition-transaction utility theoryproposed by Thaler (1985).

Drawing from this conceptual background, we de-veloped a multi-item measure of CP and demonstratedit to be a psychometrically satisfactory measure of theconstruct. This construct also is shown to be distinctfi-om VC, and findings support the utility-theory-basedproposition that coupon redemption behavior is amanifestation of both CP and VC.

Future Research

Findings indicate that further theoretical developmentof both coupon redemption behavior and CP is needed.Our measures of CP and VC explain between 18%and 28% of the variance in self-reported coupon re-demption behavior. These results can be interpretedas encouraging, but they also indicate that much vari-ance remains unexplained. We believe conceptualmodels specifying other psychological antecedents andmoderators will lead to a greater understanding ofcoupon redemption behavior.

Marketing managers will have a particular interestin future studies that further examine the relationshipbetween CP, VC, and repurchase behavior. Research-ers often note that a pitfall of consumer promotions isthat once the promotion is removed, consumers do notrepurchase. Similarly, Raj (1985) has argued thatcompanies should assess the percentage of their mar-ket share that is brand loyal because such consumersprovide stability by making the brand less vulnerableto competitive efforts. Both theoretical and empiricalsupport from our study suggests that coupon promo-tions targeted at value conscious consumers who arenot coupon prone may enhance the likelihood of re-peat purchases for brands that offer high acquisitionutility. Though the two constructs are correlated, when


median splits were performed on each scale to createlow and high groups and then cross-tabulated, 40% ofthe respondents were either low on VC and high onCP (20%) or high on VC and low on CP (20%). Theseresults, along with the findings that support the hy-pothesized differential relationships, suggest that thecorrelation between the constructs is not so high as toreduce the potential importance of the differences be-tween the constructs for marketing practitioners. Thatis, these results suggest that value conscious con-sumers who are not coupon prone may represent a siz-able segment who are motivated to use coupons. Iffuture research demonstrates that the repurchase prob-ability of the high VC/low CP segment is greater thanthat of other consumers, this segment may prove aprime target for coupon promotions. The increasedability of marketers to target coupons at specific seg-ments heightens the relevance of understanding thedifferences between coupon proneness, value con-sciousness, and coupon usage and repurchase behav-ior. Consumer scanner panels that track coupon re-demptions and product purchases longitudinally offera practical means for empirical testing.

Field studies could be used to examine potentialdifferences in the in-store behavior of deal prone andvalue conscious consumers. For example, heavy usersof coupons have been hypothesized to engage in moreout-of-store decision making (Bettman 1979; Henderson1988). It would be interesting to observe in-store be-havior (e.g., number of brands examined, time spentexamining brands, information gathered about price,price per ounce) and to compare these data with cou-pxjn proneness and value consciousness measures acrossinstances in which a coupon was and was not used forthe purchase.

Study LimitationsOne shortcoming of our study is the use of self-reportmeasures of coupon redemption behavior. A few pointsabout this limitation are noteworthy. First, self-reportmeasures of coupon redemption behavior have beenused in previous studies of coupon redemption (cf.Price, Feick, and Guskey-Federouch 1988; Shimp andKavas 1984) and the correlation between self-reportmeasures and observed coupon redemption behaviorhas been significant (Shimp and Kavas 1984). Sec-ond, we used one general measure and four product-category-specific measures of coupon redemption be-havior. Results are consistent in direction across allfive measures, suggesting that these measures have areasonable level of validity.

Another limitation is related to the generalizabilityof the results to other forms of deals. Our measurepertains to only one dimension or type of deal-re-sponsive behavior (i.e., coupons) and ignores otherdeal forms such as cents-off promotions and rebates.

(This limitation also applies to much of the dealingliterature, which often focuses on coupon usage.) Otherforms of deal proneness and their relation to deal be-havior should be examined.

Reliability estimates are lower than anticipated forthe deal retraction and shopping competitiveness con-structs. However, the hypothesis about the former issupported in spite of its low reliability and the hy-pothesis about the latter is supported directionally.Hence, even stronger results might be expected withmore reliable measures.

Despite these limitations, our results have impli-cations for marketing researchers. There is a strongneed to recognize both VC and CP as psychologicalconstructs that affect coupon redemption behavior. CPis shown to be distinct from the related construct, VC,which is shown to have an effect on coupon-redemp-tion behavior beyond that of CP. Additional hy-potheses based on utility theory further distinguish be-tween CP and VC. We hope our results will stimulatefurther theoretical and empirical studies of anteced-ents and moderators of the relationships between CP,VC, and behavioral response to coupon promotions.

Appendix AItems Comprising Coupon Proneness and

Value Consciousness ScalesAll items are 7-point scales ranging from strongly agree tostrongly disagree. All scale items were coded/recoded so thathigher scores reflect higher levels of the construct.

Coupon Proneness

• Redeeming coupons makes me feel good.• I enjoy clipping coupons out of the newspapers.• When I use coupons, I feel that I am getting a good

deal.• I enjoy using coupons, regardless of the amount I save

by doing so.• I have favorite brands, but most of the time I buy the

brand I have a coupon for.• I am more likely to buy brands for which I have a cou-

pon.• Coupons have caused me to buy products I normally

would not buy.• Beyond the money I save, redeeming coupons gives me

a sense of joy.

Value Consciousness

• r am very concerned about low prices, but I am equallyconcerned about product quality.

• When grocery shopping, I compare the prices of dif-ferent brands to be sure I get the best value for the money.

• When purchasing a product, I always try to maximizethe quality I get for the money I spend.

• When I buy products, I like to be sure that I am gettingmy money's worth.


• I generally shop around for lower prices on products,but they still must meet certain quality requirements be-fore I will buy them.

• When I shop, I usually compare the "price per ounce"information for brands I normally buy.

• I always check prices at the grocery store to be sure Iget the best value for the money I spend.

Appendix BSample Items for Related Constructs

Reference citations indicate the measures that were used inprevious research. The other measures were developed spe-cifically for our study. All measures used 7-place, stronglyagree/strongly disagree scales, with the exception of the be-havioral and product-specific brand loyalty measures and theConsumer Reports readership item. The response formats forthe behavioral and product brand loyalty measures were: 1 =less than 10%, 2 = 10-20%, 3 = 21-40%, 5 = 61-80%, 6= 81-90%, and 7 = 91-100%. The Consumer Reports read-ership item was operationalized in a 7-point never-always for-mat. All scale items were coded/recoded so that higher scoresreflect higher levels of the construct.

Product Knowledge (Alba 1983; Brucks 1985;Gardner 1983)

I have a lot of knowledge about how to select the best brandwithin a product class.

Price Knowledge

I know the prices I pay for the products I buy.

Shopping CompetitivenessI am better at shopping for bargains than most people.

Deal RetractionFor some products, when the manufacturer stops offering cou-pons, I stop buying their products.

Marginal UtilityEven when I flnd a real good sale on a grocery item I amcareful to buy only as much as I need.

Brand Loyalty, Scale (Jacoby and Chestnut1978; Raju 1980)I generally buy the same brands I have always bought.

Brand Loyalty, Behavior (Raj 1982)In buying within a given product category, what percent of thetime do you purchase the same brand?

Brand Loyalty, Toothpaste (Raj 1982)When buying toothpaste, what percent of the time do you pur-chase the same brand?

Brand Loyalty, Detergent (Raj 1982)When buying laundry detergent, what percent of the time doyou purchase the same brand?

Brand Loyalty, Deodorant (Raj 1982)When buying deodorant/antiperspirant, what percent of the timedo you purchase the same brand?

Brand Loyalty, Shampoo (Raj 1982)When buying shampoo, what percent of the time do you pur-chase the same brand?

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Distinguishing Coupon Proneness From Value Consciousness / 67

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DistinguishingCouponPronenes From Value Consciousness an Acquisition-Transaction Utility Theory Perspective