The Effects of Mobile Coupons on Consumer Buying Behavior: A Dynamic Perspective Based on Hidden Markov Model

ABSTRACT

Mobile coupons are an important way for enterprises to strengthen customer–firm relationships and increase sales. How to improve the effects of mobile coupons is an issue of great concern to enterprises. Based on large‐scale consumer shopping behavior data, this study constructs a Hidden Markov Model to explore the effects of mobile coupons on consumer purchasing behavior from a dynamic perspective. The results find that the dynamically changing relationship states can be categorized into high‐state and low‐state, and the higher the relationship state, the higher the purchase probability and the higher the purchase quantity. Additionally, both discount coupons and full‐price coupons increase the purchase probability and the purchase quantity of high‐state customers, while they have no effect on low‐state customers. The results also indicate that both the number and the offer strength of coupons enhance customer–firm relationships for customers with high‐state, but only the offer strength strengthened the relationship for customers with low‐state. The study provides a reliable empirical ground for improving the effectiveness of corporate marketing activities.