Coupon Value: A Signal for Price?

In this article, the author proposes that consumers use the value of a coupon to estimate price. Study 1 shows that the higher the percentage discount, the higher the perceived price; Study 2 demonstrates this effect with cents-off coupons. Study 3 then demonstrates that the effect is contingent on whether alternate sources of information are available to consumers and examines the consequences of this on deal evaluations and purchase intentions. The author discusses implications for the information value of promotions, along with managerial implications for coupon design and communication.