Coupons and Manufacturer Market Shares: A Brand-Level Analysis of the Ready-to-Eat Breakfast Cereal Market

This study builds on a theory-consistent demand system, namely the Almost Ideal Demand System, utilizing the Nielsen Homescan Panel data on household purchases, and models potential effects of coupons on market shares of related ready-to-eat breakfast cereal brands. The results emerging from this brand-level analysis reveal an important link between coupons and brand market shares. Specifically, based on the coupon elasticities of market shares derived in this study, coupons are found to have contributed to expanding national brand market shares, while not affecting those for private labels.