Groupon Case Study

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

Groupon redefines how small businesses operate when it comes to attracting and selling to consumers. It helps businesses operate and grow more effectively. Groupon knows it has a social responsibility with respect to the society it operates in. It tries to help small businesses grow which in turn boosts the economy. Additionally, given the state of the economy, it helps consumers find deals at an affordable cost. Groupon has a corporate social responsibility department which has employees who work on “strengthening local communities, connecting customers to their neighborhoods, and making Groupon a better place to work” (Carlson)

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.

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The three problematic areas that Groupon will face in its future are use and repeat purchases, managing its growth, and high levels of competition. For some of us we by our coupons months in advance and forget to use them which often leaves us dissatisfied about the purchase. Still with its lack of customer loyalty new subscribers are flocking to the website, which has created a demand for continuous expansion of the company’s infrastructure as well as goods and services that it offers. Moreover, the inundation of mobile devices has created some competition. Now anyone with a smartphone can save money on the spot. This has leveraged the competition against Groupon. For example will shopping at Kohls I used a 20% off coupon I found on my phone

The premise is simple -- companies get free coupon advertising without paying any upfront costs. Merchants sign up and agree to certain promotional limits, and Groupon does the rest.

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Groupon’s name is the combination of the words “group” and “coupon” and the company was founded in 2008 in Chicago by CEO Andrew Mason who is also the founder of the campaign organization website ThePoint.com, the company which Groupon grew out of. So, the idea of groupon was born from a frustration of the founder when he wanted to cancel his telephone subscription. Groupon’s concept grew into an entirely new venture: a daily deals service that relied on the power of groups and the company remains the market leader in the sector of daily deal industry. The first deal the company offered was for 50% off at a pizza restaurant from the bar motel in Chicago, where it is currently headquartered. The company expanded quickly into Boston, New York, and Washington DC and has shown impressive growth. Groupon is one of the business website that continues to rise day by day and as proof, the company rejected refused $ 6 billion acquisition offer from Google. By 2010, it served approximately more than 150 markets in the north America, 100 markets (in Europe, Asia, and south America), and boasting 35 subscribers worldwide and 1.6 billion dollars of revenue in 2011 (exhibit1, Pg.11-8). Groupon makes money through commissions on the Deals of the day and the explosion of daily deals on Groupon is its key to success. The success allowed the company to become the second fastest website to reach the milestone of $ 1 billion of wealth in short time duration of 16 months,

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 described itself as “a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount.” It is through cooperation with all businesses, companies, hotels, products, and finally to provide discount services to consumers, and to lower the amount of profit to gain tremendous customer. The company used e-mail to disseminate deals. And these deals were based on individual customer preferences which collected through the company’s technology and scale.

This article from the Economist discusses the Groupon, which is a global e-commerce marketplace that offers online coupons for bargains at shops and restaurants. Nowadays, more and more people use Groupon to get some online discounts, and it is very helpful for people to buy a product very cheaply in order to save money. It is undeniable that Groupon created a new market and it is definitely the “first-mover”. According to what we have learned in our international business class, the “Early mover” has many advantages. The “daily deal” idea attracted many customers, and helped Groupon gain the market power and customer loyalty. Because of the first-mover advantage, Groupon had many preemptive opportunities and it developed rapidly. Groupon’s

Groupon is a global e-commerce marketplace connecting millions of subscribers with local merchants by offering activities, travel, goods and services in more than a total of 28 countries. In 2011 Groupon put out some advertisements during the Super Bowl in which viewers here not too pleased with. Groupon’s mission behind its advertisements was not intended for its viewer audience to misread them, but instead the company was making fun of itself along with the genre of celebrity endorsements. Groupon is actually raising money for a lot of the causes that viewers thought the company may have been mocking or making fun of. Groupon’s intended mission was established to bring more funding as well as support to the highlighted causes.

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.

Making the offers timesensitive triggers a feeling in consumers that they might miss out on a chance that will not repeat itself if they don´t act now. Many even bought vouchers that they never redeemed, just not to miss out on an opportunity. In this sense Groupon is speaking to the risk-aversion of the majority of people. The thrill of seeing how much time is left on a coupon and how many others are acting as well, appeals to a person´s addictive behavior. We want to repeat the thrill of the bargain hunt. Groupon then made many moves to foster and expand its initial success. It expanded rapidly into more cities and later on even more countries. It fostered its connection with social media and the online world by setting up an affiliate marketing program that allowed bloggers and websites to earn commissions. This online referral was also expanded by giving consumers a direct incentive to refer Groupon by offering them a 10$ reward towards a future purchase. Groupon also heavily invested in paid search engine advertising and even created an ad that was shown during half time of the super bowl. So, to sum up, Groupon made sure that its existence spread as fast and as much as possible.

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: