How do coupons benefit the companies who are issuing them?

I am very grateful for any coupon I can get now a days, it really does a lot to help me save a lot of money, but I would like to know how they work, who actually PAYS that 35 cents off I got from my box of ring dings or any other coupon. It is obviously not a loss or else they would not be issued. I would just like to know how this system works.


Thank you.How do coupons benefit the companies who are issuing them?
Issuing coupons with discounts does in fact lower the profits of the company that has issued them; however, if you look at it at the other side, companies are actually marketing their products or service because it will attract customers' attention like yourself. Just put it this way, you went to that store due to the fact that you got 35 cents off and my question is, if they didnt offer you the 35 cents off coupon, maybe you could have chosen other companies. They might make less profit but at least they are getting your money. Second, economies of scales which means the more they sell, their cost to produce something will decrease; therefore, it actually does not affect them. By issuing these coupons, companies expect a lot of people to come into their business and that's what all companies want. I am a business owner and I will definitely offer 15% off right now if someone is truly willing to buy my products and services.