The people who are too cynical for coupons

Everyone knows that Manitobans love a deal. But do they really?

Sijie Sun, Assistant Marketing Professor and F. Ross Johnson Fellow at the Asper School of Business, doesn’t think so.

Throughout his research, Sun has seen that markdowns can cause a certain group of people to start asking questions instead of flocking to the deal. 

“When you give discounts, some people are triggered to ask, ‘Is there something wrong with that product?’ or ‘Are they price jacking?’,” said Sun.

Who are these people that question coupons? And how can marketers gain their trust? 

Sun’s resulting research article, “Power Distance Belief Affects Coupon Use,” was recently published in the prestigious Financial Times 50-ranked Journal of Marketing. The article was co-authored by Minkyung Koo (University of New Mexico) and Ashok K. Lalwani (Indiana University).  

Power Distance Belief and coupons

Sun and his co-authors hypothesized that the people who choose not to use coupons were people with a high power distance belief (PDB), a metric for how people perceive power in the world.

People with a low PDB see the world like a collective community, where everyone is on the same playing field. But people with a high PDB tend to see the world in an uneven, structured hierarchy of bosses and workers. 

Sun’s research proved—across eight studies and a series of experiments—that people with a high PDB are less likely to use coupons. Their cynical worldview leads them to think of a coupon as a “strategic maneuver,” designed to benefit the bottom line, not people. 

Finding the right people

Understandably this is a problem for marketers, who could be using coupons to potentially double, triple, or quadruple their sales. 

The solution? Either (1) you target coupons to people with low PDB, or (2) you try to gain the trust of those with high PDB.

Sun and his team found that finding the right people means the marketer must think about where their target is from, and what they believe. 

PDB is highly determined by the cultural, social and political norms of where you live. 

In China, it is normal for a professor to enter a classroom and have all the students stand up out of respect—demonstrating the high PDB present in their culture.

But in terms of politics, more liberal-leaning people are more likely to support non-hierarchical, community-based governance, and thus more likely to have a low PDB. 

Taking these factors together, marketers can more effectively deploy coupons by critically thinking about beliefs within each individual neighbourhood, city and country they target.