Introduction Operators in the lodging industry often grapple with excess inventories due to the seasonal nature of their consumption trends. Not only is the lodging business affected by the seasonality of consumption, it is also affected by economic dynamics and market slowdowns. These moderating factors, triggered by the advent of internet and ecommerce have spawned a new business model known as “Flash Sales.” This is an ecommerce trend in which a website may offer a sale on a single product for the duration between 24 and 36 hours (Max & Ritesh, 2011). Potential customers then register as members to receive daily updates of the products in sale through social media or email. Websites partner with suppliers to give great discounts to the …show more content…
Considering the numbers, one may wonder why this business will survive in the market (Dane, 2012). How? Why? When? Groupon had benefitted from the couponing comeback of the mid 2000s, which was fueled by recession, rising food prices, and the advent of digital marketing and social media. Although online coupons accounted for only 1 percent of all coupons distributed, they accounted for about 10 percent of all coupons redeemed (Coupon Facts Report, 2010). Currently, Groupon is the most renowned and the largest flash site. The site is able to feature a daily deal for every city in which it operates, offering great discounts for products. For instance a sushi special that would normally cost $40 is featured for $20 or $59 for a spa that is worth $175. Here, customers would have to pay upfront, within a designated period of time. Such sites are often attractive; not only do they have appealing coupon features, they also possess additional benefits. Sometimes their discounts can reach 70-80% off the market price. This provides the consumer with a low-risk opportunity to experience new services, products, newly opening restaurants that have or ones they may not have tried before. In 2010, the Colorado Vail Cascade Spa & Resort launched a flash-sale offer through Living Social, and the results were immediate. The revenue manager
The usage of discount coupons is simple and holds a lot of profit with website based coupons you get online from a store where securing is a factor you are incumbent to establish.
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).
Highly seasonal sales can be a burden on human resources and cash flow since the company has to quickly adjust during the busy times. Since they outsourcing and purchasing of raw materials often takes place internationally, there is a chance of running into issues of not getting what they need in time. If this were to happen during a peak period, a lot of customers would be dissatisfied. They also must continue to effectively manage all functions and not let essential activities be pushed aside. This can be difficult to manage when resources are tied up. Finally, these “peak experiences” impose a real strain on the company’s current information systems. More time than necessary is spent on trying to fix or prevent any issues from occurring. The significant challenge for Vermont Teddy Bear is attempting to keep everything up and running by providing a secure and dependable
Throughout this question, ignore all of Groupon’s costs other than the $150 paid to the merchant. The offer is announced on August 1st and it requires 100 customers to purchase the deal so that the deal goes through. For all of the questions below, if no transaction should be recorded, please explain why.
Internet sales are growing rapidly within the industry, and amongst all retail, eventually they might start to see Amazon as a major competitor. Stores like Home Depot and Lowe's have interactive websites, with the ability purchase items not seen in stores, how to guides, project ideas, and quotes for specific jobs. Trends in the industry are moving to more green products, private label and exclusive brands, more interactive retail experience with new payment options. This would utilize modern technology to increase sales. Demand which has been driven by home remodeling and building doesn’t fluctuate too much, typically minor shifts within the economic cycles.
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
As we discussed in class, every business is faced with these issues and they are important to managers making strategic decisions. One of the first things learned about business is that if there is no demand for a good or service, the firm that provides it will not continue to exist. Over time the hotel industry has continued to change with market conditions and make itself attractive to business
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.
Groupon is a real deal industry that operates within the Electronic commerce also referred to as e-commerce is a module of business that employs computer networks, namely the internet to trade and to sell and buy. At its essence it is an industry that uses technology and the internet to conduct business. Moreover, the e-commerce industry may employ online shopping where customers can use internet access to shop and trade between businesses or between customers and businesses. Groupon is a geographically diversified publicly traded company that operates based off of the ecommerce sale of the day model. This industry business model caters to customers shopping for deals and employs the means of using marketing, and cost saving strategies to entice potential clients by offering discounted coupons to potential clients for savings at various groups. There are discretionary concerns that are notably present for companies that operate in this industry, namely the fact that in a weak economic environment people are less likely to spend money on memberships at clubs and eating out at premier places.
“Marketing strategies can have a broad impact on the business in terms of instilling a marketing orientation among all those in the firm: the way of thinking or philosophy of the whole organization. However, marketing strategies can alternatively be seen as dealing only with the development of competitive advantages directly associated with the marketing function such as customer loyalty and distribution channel control. In the latter case, the domain is sometimes even further restricted by sole attention to the various element of the marketing mix rather than the more general issues of customer and channel relationships. There are two key
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:
Noone, B. M., & Lee, C. (2011). Hotel Overbooking: The Effect of Overcompensation on Customers’ Reactions t