So Who Pays?

You might be saying, “OK, so the Money Maniac buys all kinds of food and groceries for a fraction of the retail cost – up to 90%. If the customer isn’t paying for those groceries, then who is?”

Good question.

Answer: Either the manufacturer or the retailer, depending on the coupon. Their motive is very simple, they do this so you’ll come into the retail store and buy lots of whatever the manufacturer is shipping them. The manufacturers and retailers print and redeem coupons because it is in their best interest to do so. Here’s why:

  1. Brand recognition is very important. They want us to love, use, and talk about their brand.
  2. Coupons influence our decisions as to whether or not we buy something. They are trying to attract first time users to their products.
  3. Manufacturers produce coupons so that you will switch brands that you may have been loyal to in the past.
  4. Manufacturers sometimes want to close out or otherwise reduce the size of their inventory in order to introduce a new product, size, or packaging.
  5. Manufacturers will attempt to beat their competition by doing a coupon blitz on their own product line.Manufacturers will produce coupons in order to soften their price increases.
  6. Manufacturers want to give promotional support to the retailers who sell their products. In the same way, retailers want to enhance their image through brand association.
  7. Manufacturers and retailers cooperate together to make sure that in-store promotions and manufacturer coupons come out at approximately the same time.
  8. Coupons enhance “image brand”. In the same way we call tissues “Kleenex” or gelatin dessert “Jello”, product manufacturers want to establish themselves in the market and in the consumers mind to the point that we call canned tuna, “Star Kist” and peanut butter, “Jif”.
  9. It is very inexpensive for manufacturers to have coupons printed in inserts (about $7 per 1,000 inserts with a circulation of about 60,000) compared to television advertising that cost millions of dollars. In the past when there were only three major TV networks, TV ads were more effective. With hundreds of cable TV channels, the viewing market has diminished. Printed and Internet coupons are the best possible means of advertising for the retailer and manufacturer.
  10. Kraft Foods, the second largest food manufacturer in the world, in 2008 had annual revenue of 42 billion dollars. Do you really think they don’t know what they’re doing by giving the consumer a good cents-off coupon?
  11. Manufacturers know that 30,000 square foot superstores and the introduction of 20,000 new products annually can easily confuse and distract the customer unless they go in with coupons.
  12. In 2008 only 1.82% of all the coupons printed in the U.S. were used by consumers, even though the average consumer goes into a retail store 2.6 times per week.

Bottom line: Manufacturers and retailers want, need, and would highly appreciate it if you used their coupons! They attend conventions, write articles, and otherwise do everything they can to induce us to buy their products.

Now think for a minute about the chain of influence that takes place when couponers clear the grocery shelf. Usually freight trucks come in daily. That item will be restocked as soon as possible, usually the next day. The store will need to order more. The store calls their supplier who contacts the manufacturer to ship more product. The manufacturer makes more of that product, keeping people employed all the way up and down the line. As for the store who has to keep the shelves stocked, they are employing the checkers, stockers, and management because their store moves products. Even in recessionary times, stores that are moving food and groceries do not close. Stores with nice full shelves and products dusty from sitting are the stores that close in a poor economy.

Filling your home with a stockpile of food and groceries for very little money is good for your personal economy – but that’s not all! It’s good for your local economy and it’s good for our national economy. So let’s do it – what are you waiting for?!