Groupon: Finding Strength in Numbers
Case Study 14.1 talks about the new internet coupon sensation: Groupon. Groupon was recently discovered in Chicago to gain exposure to new businesses through discounted membership deals and has been on the rise ever since. This particular case study attempts to elaborate on the success of Groupon and how it works. The e-coupon was designed to help business owners appeal to new prospective consumers by advertising group discounts on products and services. So far, the website advertises business in 45 major U.S Cities and has over 2 million subscribers. There are a range of businesses that are advertised on the website. You can find discounts on spa packages, concert tickets, dinner and dessert specials, and more. The way it works is, the business owner makes a deal with the website by offering a discount on a product or service and tells how much they are willing to accept for it and the amount they’re willing to give away. Then, Groupon advertises the offer for a limited time and receives a finder’s fee once consumers purchase the deals. The business has full control over the minimum and maximum number of deals they’re willing to offer. If the deal doesn’t appeal to consumers then there is no financial loss to the business owner. The intention of the business owner is not to gain a lot of profit from the deals made; rather the intent is to drive traffic to the business once the deal is over. Moreover, the benefit of Groupon to the producer comes after the deal is over and the benefit of Groupon for the consumer comes while the deal is still going on.
Questions for Critical Thinking
1. Coupons are a tried-and-true promotion method, and the
Internet includes other couponing sites. How does Groupon
Groupon differs from other couponing sites in the sense of the approach taken to advertise the businesses featured on it’s site. The creators of this e-coupon...