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Outline
• Introduction
• Industry Analysis
• Marketing Research Problem and Research Questions
• Hypotheses
• Research Methods
• Analysis
• Results
• Implications
FIVE reasons digital coupons matter right now!
Economic recession and slow recovery, means couponing is here to stay!
Saving is becoming an expected behavior among most Americans.
Newspaper readership is on the decline.
Smartphone penetration is increasing.
The internet has become a key part of our daily lives.
Saving $$$
Newspaper
An excellent shopping tool, providing heavily discounted deals
Motivating consumers to try NEW!product/service offerings
To interact, share ideas, and provide feedback
To show support for the company to others
For fun or entertainment
From a consumer perspective, social coupons are:
Industry Analysis
•US spending on deals will hit nearly $2 billion this year and will rise to $4.1 billion by 2015.
•74% of respondents claimed to search multiple coupon sites every week - Bing and Impulse Research
•Grouponwas the industry pioneer, however there is a long list of other deal services:
• Living Social
• Scoutmob
• Bloomspot
• Yelp, Facebook, Yahoo, Open Table, and Amazonlocal.
•Low Barriers to entry
•3 R’s: Retention, Redemption, Respond
•Yelp reviews that mention having used a coupon have a strikingly lower rating score than those that do not.
exploratory
Marketing Problem
To determine what drives digital coupon usage from a consumer perspective by examining:
• What contributes to consumers using deals?
• What contributes to their overall experience?
• Does brand loyalty has an effect on consumers’ digital site preference?
Research Questions
1. What drives consumers to use digital coupons?• Do social networks affect which digital coupon service customers use ?
• Does mobile redemption affect which digital coupon deal site consumers use?
• Do consumers preferences affect whether or not they use digital coupons?
• Do consumer preferences affect which digital coupon services a consumer uses?
2. What drives consumers to not use digital coupons?• Do demographics affect whether or not a consumer uses a digital coupon?
3. How does digital coupon usage affect a business?• Does using a digital coupon at a place that you’ve used before affect
consumers’ overall experience with digital coupons?
• Does consumer used which category of business before affect consumers’ overall experience with digital coupons?
• Do consumers view the business differently if they utilize social couponing?
The goal of this research is to answer the following questions:
Hypotheses
1-1 Do social networks affect which digital coupon service customers use ? Ho: usage of different types of social network sites has no effect on digital coupon deal sites
which consumer useHa: usage of different types of social network sites has effect on usage of digital coupon
deal sites which consumer use
1-2 Does mobile redemption affect which digital coupon deal site consumers use?Ho: usage of mobile redemption has no effect on digital coupon deal sites which consumer
useHa: usage of mobile redemption has effect on digital coupon deal sites which consumer use
1-3 Do consumers preferences affect whether or not they use digital coupons?Ho: consumers’ preference has no effect on usage of digital couponHa: consumers’ preference has effect on usage of digital coupon
1-4 Do consumer preferences affect which digital coupon services a consumer uses?Ho: consumers’ preference has no effect on digital coupon deal sites which consumer useHa: consumers’ preference has effect on digital coupon deal sites which consumer use
Hypotheses
2-1 Do demographics affect whether or not a consumer uses a digital coupon? Ho: demographics has no effect on usage of digital couponHa: demographics has effect on usage of digital coupon
3-1 Does using a digital coupon at a place that you’ve used before affect consumers’ overall experience with digital coupons?
Ho: prior to using the deal, consumers have purchased from business has no effect on consumers’ overall experience on using digital coupon
Ha: prior to using the deal, consumers have purchased from business has effect on consumers’ overall experience on using digital coupon
3-2 Does consumer used which category of business before affect consumers’ overall experience with digital coupons?Ho: consumers used which category of business before has no effect on consumers’ attitude toward the businessesHa: consumers used which category of business before has effect on consumers’ attitude toward the businesses
3-2 Do consumers view the business differently if they utilize social couponing? Ho: businesses utilizing digital coupon has no effect on consumers’ attitude toward the businessesHa: businesses utilizing digital coupon has effect on consumers’ attitude toward the businesses
Research Methods
Methods
Primary Data
Executive
Interview
Data Analysis
Secondary
Data
Academic Journals &
Survey Data
Analysis
• Types of analysis:• Frequency Distributions
• Comparison of Means
– T-test
–Chi-Square tests
• Comparison of Proportions
• Regression Analysis
Insights from ScoutmobMain Concepts from Interview with Liza Dunning
“Maintaining the trustworthiness of its brand is one of the company’s primary objectives”
Creative coupon design was part of a larger concept to have consumers use Scoutmob’s mobile app, products and editorial as a part of their lifestyle
Category preferences are not uniform: Restaurants are seen as the sustaining element for Scoutmob
A trend of retail successes within the app as well
“Improve the mobile app and the product as well as add excitement to the brand”
Future plans to reward loyalty
Secondary ResearchDaily Deals: Prediction, Social Diffusion, and Reputational
Ramifications
Do Facebooklikes correlate with the final deal size and whether the dataappears consistent with current models for the effects of social networks ofbuying decisions?
Must be careful not to conflate correlation and causation; it is not clear that likesinspire purchases, even if the number of likes and deal sizes are correlated.
Deals with approximately the same number of likes can vary significantly interms of final deal size
Secondary ResearchDaily Deals: Prediction, Social Diffusion, and Reputational
Ramifications
The average month over month growth in number of reviews for deals prior to Groupon offers is about 5% while the average percentage increase in reviews the month after the groupon is 84%.
During\After the Deal: On average, the number of user contributed reviews increases significantly and based on the proportion mentions, the group deal appears to be the proximate cause.
Yelp reviews mentioning either keyword (groupon or coupon) are associated with star ratings that are 10% lower on average than reviews that do not
1-1 Do social networks affect which digital coupon service customers use?
• Ho: usage of different types of social network sites has no effect on digital coupon deal sites which consumer use
• Ha: usage of different types of social network sites has effect on usage of digital coupon deal sites which consumer use
R2=0.1495% of confidence
1-1 Do social networks affect which digital coupon service customers use? (contd.)
0
10
20
30
40
50
60
70
80
90
88
43 39 37
8 5 3
39%
19%17% 17%
4% 2%1%
People Who Use Deals
% of Total Sites
# of Users
0
5
10
15
20
25
3049%
12%10%
24%
0%4% 2%
People Who Don't Use Digital Coupons
% of Total Sites
# of Users
1-2 Does mobile redemption affect which digital coupon deal site consumers use?
• Ho: usage of mobile redemption has no effect on digital coupon deal sites which consumer use
• Ha: usage of mobile redemption has effect on digital coupon deal sites which consumer use
• 56% of Digital Coupons Used were redeemed via Mobile
R2=0.2195% of confidence
38%
8%8%
6%
12%
29%
Used Mobile Redemption
ScoutMob
Rest.com
IDK
HalfOff
Living Social
Groupon
1-3 Do consumers preferences affect whether or not they use digital coupons?
• Ho: consumers’ preference has no effect on usage of digital coupon
• Ha: consumers’ preference has effect on usage of digital coupon
R2=0.39 95% of confidence
1-3 Do consumers preferences affect whether or not they use digital coupons? (contd.)
0
5
10
15
20
1319
128
14
511
19
13%
19%
12%
8%
14%
5%
11%
19%
People Who Don't Use Digital Coupons
% of all Pref Categories
0
10
20
30
40
50
60
70
80
90
51
8976
51
82
3257 61
10%
18%15%
10%
16%
6%
11% 12%
People Who Use Deals
% of all Pref Categories
# Responses
1-4 Do consumer preferences affect which digital coupon services a consumer uses?
• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use
• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use
R2=0.1195% of confidence
1-4 Do consumer preferences affect which digital coupon services a consumer uses?
• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use
• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use
R2=0.1295% of confidence
1-4 Do consumer preferences affect which digital coupon services a consumer uses?
• Ho: consumers’ preference has no effect on digital coupon deal sites which consumer use
• Ha: consumers’ preference has effect on digital coupon deal sites which consumer use
R2=0.1095% of confidence
2-1 Do demographics affect whether or not a consumer uses a digital coupon?
• Ho: demographics has no effect on usage of digital coupon
• Ha: demographics has effect on usage of digital coupon
R2=0.1395% of confidence
2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)
• Ho: Consumer’s gender has no effect on usage of social coupon deal
• Ha: Consumer’s gender has effect on usage of social coupon deal
95% of confidence
2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)
• Ho: Consumer’s marital status has no effect on usage of social coupon deal
• Ha: Consumer’s marital status has effect on usage of social coupon deal
95% of confidence
2-1 Do demographics affect whether or not a consumer uses a digital coupon? (Cont.)
• Ho: Consumer’s age has no effect on usage of social coupon deal
• Ha: Consumer’s age has effect on usage of social coupon deal
95% of confidence
2-1 Do demographics affect whether or not a consumer uses a digital coupon?(Cont.)
• Ho: Consumer’s age has no effect on usage of social coupon deal
• Ha: Consumer’s age has effect on usage of social coupon deal
95% of confidence
Who Use?
71%
29%
Use Digital Coupon & Gender
Female
Male
56%
44%
Use Digital Coupon & Marital Status
Married/Living with partner
Single
37
46
9
0 10 20 30 40 50
18-29
30-45
46-65
Use Digital Coupon & Age
814
1229
88
13
0 5 10 15 20 25 30 35
0-30K
31K-50K
51K-80K
81K-100K
101K-125K
126K-150K
150K+
Use Digital Coupon & Income
**In range 81K-100K, there are 13 respondents who did not answer the question, we assume their income are the mean, which is $94,477.
Who Do Not Use?
46%
54%
Not Use Digital Coupon & Gender
female
male
82%
18%
Not Use Social Coupon & Marital Status
Married/Living with partner
Single
5
14
9
0 5 10 15
18-29
30-45
46-65
Not Use Social Coupon & Age
02
64
1033
0 2 4 6 8 10 12
0-30K
31K-50K
51K-80K
81K-100K
101K-125K
126K-150K
150K+
Not Use Social Coupon & Age
Why Do Not Use?
0
1
2
3
4
5
6
7
8
9
Don't Know How
Not Familiar
No Need No Value Too Busy Too Many
Comms
11%
30%
7%11%
26%
15%
Reasons People Don't Use Digital Coupons
% of Total Response
# of Response for Reason
3-1 Does using a digital coupon at a place that you’ve used before affect consumers’ overall
experience with digital coupons?• Ho: prior to using the deal, consumers have purchased from business has no effect
on consumers’ overall experience on using digital coupon
• Ha: prior to using the deal, consumers have purchased from business has effect on
consumers’ overall experience on using digital coupon
R2=0.29 95% of confidence
3-2 Does consumer used which category of
business before affect consumers’ overall
experience with digital coupons?• Ho: consumers used which category of business before has no effect on
consumers’ attitude toward the businesses
• Ha: consumers used which category of business before has effect on consumers’ attitude toward the businesses
R2 = 0.16 95% of confidence
Coefficients Standard Error t Stat P-value
Intercept 7.000 1.187 5.898 0.000
Category_Used_RestaurantBar -0.930 1.197 -0.777 0.439
Category_Used_Retail -1.143 1.269 -0.901 0.370
Category_Used_Salon -2.143 1.269 -1.689 0.095
Category_Used_Entertainment -0.846 1.232 -0.687 0.494
Category_Used_Health Service -0.667 1.370 -0.486 0.628
Category_Used_Experience -3.000 1.370 -2.189 0.031
Category_Used_Travel -1.250 1.327 -0.942 0.349
3-2 Does consumer used which category of
business before affect consumers’ overall
experience with digital coupons?(Cont.)
0
2
4
6
8
10
12
14
16
18
1 2 3 4 5 6 7
People Who Don't Use Deals
Lowers Biz Status Friends/Family Use Deals
3-3 Do consumers view the business differently if they utilize social couponing?
• Ho: businesses utilizing digital coupon has no effect on consumers’ attitude toward the businesses
• Ha: businesses utilizing digital coupon has effect on consumers’ attitude toward the businesses
R2=0.4995% of confidence
3-3 Do consumers view the business differently if they utilize social couponing?
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7
People Who Buy Digital Coupons
FriendsRecommend
PrevCust/BuyDeal
Tell Others
ProudSavings
FriendsRecommend
Uncomfortable
OnlyGoIfDeal
LowerBizStatus
NoBuy Upfront
Less Likely Very Likely
Coupon User
Demographics
• Female – 71%
• Married/living with partner – 56%
• 30-45 Age – 46%
• $81,000-100,000 – 32%
Lifestyle• Proud to save money • Enjoy going out• Highly engaged online• Always in the know• Green Lifestyle• Socialite
Lifestyle• Very busy• Not price sensitive• Traditional• Hands -on
Non-Coupon User
Demographics
• Male – 54%
• Married/living with partner – 82%
• 30-45 – 50%
• $101,000-125,000 – 36%
ImplicaitonsFor a restaurant targeting an older demographic partnering with health services would be beneficial.
-With partnering with health services, should avoid using Living Social.
As a business, targeting existing customers would be more beneficial than targeting new customers with digital coupons.
Should strongly consider Scoutmobbecause consumers who prefer mobility and who also prefer not to print deals are more likely to use Scoutmob.
-Scoutmob is also more likely used for restaurant than any other site
Targeting consumers with a high preference for restaurants is your best bet.As peoples preferences towards restaurants increases their opinions that it lowers a restaurants status decreases.
To create more of an experience for consumers, should provide an incentive for consumers to share through social networks. People that have no social network think only a few of their friends use deals.
Make it easier for consumers to use digital coupons by hiring brand reps/digital coupon ambassadors educating customers on how to use digital coupon—as age increases “don’t know how” becomes more frequent as the reason people don’t use digital coupons.