۱- Introduction

۲- Literature review and hypotheses

۳- Methodology

۴- Results

۵- Discussion

۶- Theoretical and managerial implications

۷- Conclusion, research limitations and future avenues

References

Abstract

This study builds on the theory of parallel distributed processing, Thaler’s exchange theory, and the trust theory to extend our existing knowledge on the location-based coupons literature in the retail fast food sector. Based on several location-based coupons provided by fast food chains, a mock coupon was designed and an online survey was conducted on a sample of 228 Canadians. Attitude toward location-based advertising is found to be significantly determined by consumers’ trust and perception of control. Attitude toward location-based coupons, however, is driven by monetary benefits as well as convenience and hedonic motives. Attitude toward location-based coupons is significantly predicted by attitude toward location-based advertising. Both of them have a significant impact on consumers’ intention of using location-based coupons. The study provides strong evidence supporting Thaler’s exchange theory according to which customers are motivated by monetary benefits as well as convenience and hedonic aspects.

Introduction

The widespread use of smart mobile devices and the recent advances in technologies have provided many possibilities of personalizing the promotional message sent to consumers within a variety of Global Positioning Systems (GPS) and have thereby dramatically fostered the development of location-based advertising (Okazaki and Taylor, 2008). The latter refers to the “marketer-controlled information customized for recipients’ geographic positions and received on mobile communication devices” (Bruner and Kumar, 2007, p. 3). As a result of the development of location-based advertising, location-based coupons emerged as a new element of the promotional mix strategy. Locationbased coupons help retailers to send personalized promotional contents and marketing messages to nearby consumers (Unni and Harmon, 2007). This ‘new’ form of couponing is gaining great interest among firms because it allows a “better interactivity and connectivity” with customers (Karjaluoto et al., 2008, p. 242). It includes both price and special offers, such as location-based coupons, and non-price offers such as brand ads, polling, location-based reminders, and geotags (i.e., an electronic tag that assigns a geographical location (e.g., the vendor’s address) to a posting on a social media website, a digital photograph, etc.) (Barwise and Strong, 2002; Bruner and Kumar, 2007). The current research focuses on the former aspect of coupons (i.e., price and special offers).