You are opening an informal dining establishment in your hometown, a novel type of buffet-style eatery offering a wide variety of breakfast and lunch choices 24-hours a day, called Anytime Cafe. As part of your initial promotions, you are considering a couponing effort as well as a frequent diner program. Briefly describe a couponing effort for this business, naming several advantages and disadvantages.

Then describe how a frequency program would work for this establishment, including any advantages and disadvantages.

References:

Advantages

o Give a discount to price-sensitive consumers

while selling brand at full price to others

o Induce brand switching

o Timing and distribution can be controlled

o Stimulates repeat purchases

o Gets regular users to trade up within a brand array

Disadvantages

Timing of redemption cannot be controlled

No way to prevent current, brand loyal customers from redeeming coupons

Coupon programs require costly administration

Fraud is a serious, chronic problem