Groupon Industry Analysis Essay

Occasionally, Groupon would target major promotions for national brands offering discount vouchers. This would increase the Groupon brand awareness and subscribers, however negatively affect the smaller local businesses pushing critical consumer revenue away from local restaurants, and merchandisers. For example the timing of the vouchers from national brands would be utilized on weekends and holidays, taking away critical revenue from local merchants at critical times. Finally, the consumers that utilized Groupon on a recurring basis were able to spend exactly what the voucher offered and did not provide recurring business to the merchant. The overall goal of the merchant was to gain exposure and recurring customer traffic and revenue based upon initial discount vouchers. This did not hold true for many merchants, as the Groupon voucher was utilized and customer retention was non-existent.

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 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)

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

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.

On the off chance that Groupon consents to highlight that business' rebate, they will deal with all copywriting of the great or administration being advertised. Organizations just pay to Groupon if enough individuals buy the great or benefit, and "the deal is on". Moreover, Groupon takes an expense of half of the aggregate buy. At last, the dominant part of organizations say they wind up "making back the initial investment" subsequent to reclaiming all Groupons, however the presentation procures them around 20% in long haul development - and they are saved the cost of customary promoting costs.

I noticed that Grill Em Steakhouse & Sports Bar is currently using Groupon, and we also understand how Groupon works. We have talked to many restaurants in San Jose area who used deal sites such as Groupon or Livingsocial in the past and many of them have one thing in common. They are definitely not happy because restaurants lose money on every single deal, regular customers become coupon users, and customers stopped coming back.

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,

Groupon has become the No. 1 of deal-daily Internet companies, and I think that its information systems are good enough. Either security issues, or technical support are good enough so far. However, Groupon still need to focus on the future because this industry is very competitive. Groupon have to keep learning and improving. Therefore, I recommend that Groupon should focus on the aspect of data storage and payment method.

In addition to these learning effects, Groupon is also a dominant design in its industry because of its leadership’s absorptive capacity, meaning that they have a great ability to recognize, adapt to and utilize new knowledge and changing market needs. Since Groupon began, Lefkofsky and Mason have developed a great “sink or swim” mentality that has led to the entire firm’s resiliency in facing the challenges of a newly founded industry. THE VALUES OF GROUPON In becoming the dominant design for the online promotional deal industry, Groupon has become a really valuable resource for merchants and consumers alike, and vice versa.

On the other hand Groupon offers national as well as local deals, which caused the business to

This is where Groupon comes in with having the ability to save the consumer money anywhere from 50% to 90% through different services and products. Saving people money is only going to mean better things for Groupon in these economic times. We can only think that Groupon is going to fair well despite the economic situation the country is currently suffering.

Groupon has many strengths that it offers as a company from ease of access to its customer loyalty, all of which have contributed to the overall reputation of the company as a whole. The first ease of access is a no brainer. First off the fact that it operates solely from the web makes it easier for returning and new customers to access their web page and to browse various products and daily deals. Every day the company lists various deals for its customers, in addition to sending multiple notification via text messaging or email whenever a new deal arrives or has been uploaded. Internet merchandisers and

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: