In difficult economic times, the coupon is king.
The last three years have been a growth period for product discount coupons as Americans worked hard at saving money. More than 7.7 billion coupons, with a record-setting value of $4.5 billion, were redeemed last year.
Manufacturers distributed a mind-boggling 310 billion coupons in all, a 6 percent increase over the previous year. Average face value of coupons redeemed was 58 cents, a 4-cent increase from 1991.
Couponing is a worldwide phenomenon that stretches across economic and age barriers. Breakfast cereals offer the most coupons, followed by laundry detergents, according to NCH Promotional Services, the world's largest coupon processor.
Industry growth is coming under some pressure, however.
Last year, several big companies, most notably Procter & Gamble with its Tide and Cheer products, began switching to an "everyday low pricing" strategy and fewer coupon offers. In the second half of 1992, overall coupon business was slower than in the first half.
"Coupon promotion periods can produce big ups and downs in required production capacity during the course of the year, and that gets in the way of a manufacturer's bottom line," explained Victor Imbimbo Jr., president of the Hadley Group marketing agency in Stamford, Conn. "Manufacturers and retailers look at everyday low pricing as a way to obtain pricing consistency throughout the year."
Results of that strategy aren't in yet. Meanwhile, there are still hundreds of billions of coupons.
The free-standing insert -- a coupon appearing in a four-color, preprinted advertisement in a newspaper -- is the primary method of coupon distribution. Newspaper run-of-press, as well as direct mail, magazine and in-store coupons, are other examples.
"Coupon use is a lagging economic indicator, since it takes about six months after the economy revives for the consumer to feel he isn't in recession anymore," said Jane Perrin, senior vice president with NCH in Lincolnshire, Ill., as she pointed out a typical Sunday newspaper insert that featured $60 in coupons. "But whatever the economy, coupon usage remains an important part of consumer grocery patterns."
There are many reasons why.
"Manufacturers issue coupons if they're introducing a new product, if they have a slumping product or if they're trying to steal market share," said Lynn Liddle, vice president with Valassis Inserts of Livonia, Mich., which makes free-standing coupon inserts.
Some tips from the coupon experts:
* Use a file box with dividers to organize coupons at home. Have a smaller portable accordion file for in-store use that you can carry with you when you shop.
* Treat coupons as money. Cut out coupons only of brands or products you normally use or want to try.
* Organize your coupons alphabetically in product and brand-name categories. Check the coupon offers for any size or quantity restrictions.
* Keep coupons that are expiring first in the front of each category. Stock up on a brand you use regularly if a coupon is about to expire.
* Make coupons a family project. Kids in particular like to take part in the bargain hunt, and it teaches them about money as well.
Phil and Fran Lascola of Woodridge, Ill., who have five children, have carefully followed those money-saving guidelines for years, entering supermarkets each week as a team armed with their cardboard coupon organizer. One amazing grocery bill they showed me totaled $120, of which $60 was covered by fistfuls of coupon offers they'd clipped from numerous sources. Frugality saves them thousands of dollars annually.
"I'm a practical person and just can't see shopping without coupons," explained Fran, who combs newspapers for coupon deals each week. "Maybe I am a coupon addict, but the addiction saves my family money."