Coupons Hold on Survive Procter & Gamble's Cutting Back

Article excerpt

Coupon use has dropped slightly since the world's largest advertiser, Procter & Gamble Co., cut back distribution in February, but overall appeal remains strong.

"The number of coupons distributed has declined slightly from 1995 to 1996," said Charles Brown, marketing vice president at Dun & Bradstreet's Nielsen Clearing House promotional services unit. "But half the top 10 manufacturers have increased distribution."

More than 3,000 companies issued 291 billion coupons last year, almost twice the number dumped on the market in 1994, said Sharon Joyner-Paine, spokeswoman for Carolina Manufacturing Service, which prints and processes coupons for food and household goods manufacturers. "No other marketing vehicle can reach 50 million households in one day so cost-effectively," said Joyner-Paine. About 161 companies issued coupons for the first time last year. Used By 1 In 3 Shoppers Coupons have changed the way Americans shop. Almost one of every three consumers say they wouldn't shop without them. About 82 percent say they use them regularly. That didn't stop Procter & Gamble from reasoning that with only 2 percent of coupons cashed in the last two years, they're a drag on the company's $5 billion marketing budget. "There's nothing effective about a system that fails 98 percent of the time," said P&G spokeswoman Elizabeth Moore. Not all companies are ready to make the break. Clorox Co. and Kimberly-Clark Corp., which considered following Procter & Gamble's lead, are sticking with coupons for now. In February, Procter & Gamble, which at one time issued about 3 billion coupons a year, stopped circulating them in three New York areas and reduced distribution across the country. Since 1990, it's cut its coupon spending in half. The New York Attorney General's office is investigating whether P&G, along with Tops Markets and Wegmans Food Markets Inc., are trying to use their strong market positions to discourage others from issuing coupons. New York Attorney General Dennis Vacco said the consumer goods maker is cooperating with the investigation. Vacco said it probably won't, however, disclose results of its experiment in eliminating coupons - figures that manufacturers and retailers would love to see. While coupons remain popular, "the players and play itself has changed slightly," said Nielsen Clearing House's Brown. Cereals and breakfast foods, for example, once the top category for which grocery coupons were distributed, fell almost 40 percent from midyear 1995 to No. 5. That category was superseded by health aids, hair care, pet food and oral hygiene products. …