Groupon Case Analysis Essay

Groupon is a deal based business that brings customers discounted deals from the businesses. As a result of massive success and the growing competition, the business is faced with the option of either selling to Google or developing an effective marketing strategy for continuing its own. In the due context, the underlying report proposes a marketing plan for successfully dealing with the market challenges (Chatterjee, O”Keeffe, and Streiff, 2012).

Groupon is an internet website company focused on generating revenue by utilizing relationships with merchants to provide consumers with discounts on select items. The goal of the discounted vouchers is to drive additional consumer store traffic and generate revenue for merchants which are shared with Groupon via a predetermined contractual percentage. Groupon generates visibility and exposure with email and social networking to increase consumer spending at specific merchants. Groupon has many features from personalization of product offerings to specific demographics and target segments. In addition, a more defined value proposition allowing merchants an opportunity to showcase their own product offerings on

Andrew Mason, Founder & CEO of Groupon, had a big idea, but was not aware how massive it could grow. Before Groupon, Mason begun a website called ThePoint.org as a site for collective action, to get groups of people together to solve public and social issues. It wasn’t as effective as he projected, and so started to think of how he could take the group approach of ThePoint.org and turn it into a business channel. Mason believed the Internet had potential to change how people discover and buy from local businesses. That’s when Andrew Mason came up with the excellent concept for Groupon. “Part of Groupon’s success is the simplicity of its business model…” (Kerin & Hartley, p. 110) Groupon offers “Deal of the Day” coupons from local and nationwide

Groupon, Inc. (“Groupon”) is a company that specializes in local commerce. It has relationships with companies on a global scale and alerts consumers on the hottest deals with respect to shopping for various products, travel destinations, and popular spots, goods and services that a city has to offer. The stock ticker for the company on the NASDAQ exchange is “GRPN.” The company is listed under the sector ‘Technology’ and industry ‘Internet Information Providers.’ It started off as ‘ThePoint.com, Inc.’ but in October 2008 it changed its name to ‘Groupon, Inc.” Groupon was founded in 2008 by the now ousted CEO Andrew Mason. The current CEO is Eric Lefkofsky who initially invested $1,000,000 toward the development of the company. The Chief

After discovering errors in its accounting and the failure to set aside enough reseveres for customer refunds, Groupon. Inc announced revision of its first financial results posted as a public company in April 2012, which resulted in a cut to its 2011 fourth-quarter revenue of $14.3 million. In addition, this revision has reduced its fourth quarter operating income by $30 million, net income by $22.6 million, and earnings per share by $0.04, due to an increase of operating expenses after compliance with GAAP.

In conclusion, the understanding of consumer behavior mixed with the growing social trends of technology was a crucial part in the growth of Groupon in 2008. By being able to understand consumers and the target market, Groupon were able to affect the wants of their customers and help start their process of the purchase decision using daily deals, providing them with warranties such as the “Groupon Promise” and discounted prices.

Groupon’s primary strategy for growth is sales and marketing. They use complex analytics to segment customers not only by city but more specifically, by neighborhood. They target these customers with marketing that is close to home and relevant to their demographic. They provide local businesses with instant access to droves of local customers and in exchange they split the revenue from the sales of “groupons” with the local businesses. Groupon’s market name recognition and vast data warehouses containing intimate customer data give them an advantage over competitors. They use this data to buy Google Ad Words that will attract the most customers and provide an

This unique company was founded in November of 2008 by Andrew Mason, Eric Lefkofsky, and Brad Keywell. Groupon, which is a combination of the words group and coupon, is a global force in the e-commerce marketplace. It offers discounts on activities, travel, goods, and services in over twenty-eight countries today. Starting in Chicago and expanding worldwide in a very short period of time, Groupon was the “first of its kind and changed the way consumers spend, shop, and think about discounts”. (Wheelan, page 11-1) Eric Lefkofsky provided the one-million-dollar seed money to start the company and by April of 2010 the company was valued at 1.35 billion dollars. Over the years there have been FCC challenges and restating of figures

As a group, we have chosen to examine and report on Groupon and relevant information on the marketing strategies and efforts employed by the organization, as well as the ethics and social responsibility related to Groupon’s marketing. Groupon’s mission statement according to their letter to shareholders is “To become the operating system of local commerce.” Groupon has stumbled and disappointed users of their services because of rapid growth. Instead of focusing on growth, Groupon must listen to their stakeholders and improve relations with the customers-both merchants and consumers, as well as investors of the organization. We want to evaluate the company’s objectives, goals, marketing strategy, marketing mix, as well as

Lefkofsky will later go on to invest a million dollars in Mason’s idea for The Point. Unfortunately for Mason, The Point had a hard time gaining traction and online traffic. Once The Point stalled and Lefkofsky pulled the plug, Mason went searching for another niche in online commerce. Mason and his team eventually came to an idea that is so commonplace most people would wonder why it hasn’t been thought of before. They figured that most businesses have unused inventory, food that goes to waste, and appointments that don’t get booked. (Sennett 53) Groupon’s main goal was to bring new customers to businesses because of their deals. The businesses developed deals with the hope of retaining repeat customers. The basis of Groupon was formulated when Mason and his team established the “tipping point” concept. If so many people bought the deal, then it would go through. If the deal didn’t “tip” then merchants would have no penalty and Groupon wouldn’t make profits. (Sennett 53) Most deals offered 50 percent or more off a seller’s goods or services. Owners got half the profits from each Groupon purchase and they would also fulfill the coupons. Another staple that sets them apart is the Groupon

Groupon’s business model is much different than that of WalMart. WalMart is the largest retailer in the world consisting of physical store entities such as WalMart U.S., WalMart International, and Sam’s Club in addition to it e-commerce sites. Their business model has everything you can think of (shown in Exhibit A), from relations with their supplies to relations with their trade partners. WalMart maintains its mottos of “Always low prices” and “Save money, live better” by focusing a great deal on its suppliers. Because of the size of the company and its continuing needs, WalMart is able to negotiate immensely well with its suppliers to fulfill such a slogan. On the other hand, Groupon is not so much a physical entity as it focuses in the e-commerce industry. To put it in simple terms, Groupon is an online middleman offering discounts for local shops and restaurants. The business model entails Groupon offering discounts at such locations to its customers/subscribers on a

As Groupon is established in many countries of the world, a global strategy has to be pursued

Groupon is a deal-of-the-day website that is localized to major geographic markets worldwide. Launched in November 2008, the first market for Groupon was Chicago, followed soon thereafter by Boston, New York City, and Toronto. Groupon has over 50 million subscribers across 300 cities in more than 40 countries. The idea for Groupon was created by Andrew Mason who is currently the company’s CEO. [update]Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 60 million registered users. The growth in the future is likely to be at a slower pace, primarily because the company is already one of the largest in the local deals space.

In my opinion Groupon is not a ready-to-go solution to the problem of low marketing budgets of many local merchants. If Groupon is good

With the internet technology, everyone can stay at home for online shopping. What’s more, if you can enjoy daily discounts with all the information, home delivery and 24-hours daily operation, that’s all can be found by buying Groupon. Groupon, the company has successfully captured millions of online consumers throughout the world. The marketing strategy of Groupon captures the consumer behavior. Consumer buying behavior, defined as... “The buying behavior of final consumers, individual and households who buy goods and services for personal”.Groupon consumers mainly responses to: