Groupon

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Groupon

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 the ethics and social responsibility of this organization. Groupon is a Chicago based company started by a Northwestern musical prodigy, Andrew Mason. It had an IPO last November that priced the company at nearly $20 billion. Since then, the company’s fortunes have suffered and the stock is currently valued at 40% of the IPO price. The drop in their stock value makes sense since Groupon as a whole isn’t profitable since their U.S. division only made 12% profit, but this was with their heaving marketing and administrative costs associated with it, so in actuality we no one besides Groupon can be certain what the real profit was, there could be a possibility they suffered a loss, thus making this company intriguing on so many fronts. According to Forbes, “Groupon is the fastest growing company in US history.” As a result of this growth, Groupon has struggled with maintaining and developing long lasting trust by its users.

Groupon states on their company webpage that the company philosophy is “we treat our customers the way we like to be treated.” This philosophy involves providing deals that members of Groupon themselves would like to buy, no terms and conditions added into these deals, and unbelievable customer service. Further, “we want you to love Groupon. “Gotchas” and buried conditions that sour the experience are a terrible way to accomplish that goal (Groupon website).” Judging by the fact that Groupon went public in such a short time after its inception, the goal of the organization can be seen along the lines of providing investors and shareholders with returns, in addition to allowing adventurous people the ability to try new and exciting things at a discounted rate and allowing somewhat unknown businesses the ability to market themselves and gain a new customer base through their discount service.

Groupon’s marketing department still focuses on the trends of marketing followed by startup companies. For the first year and a half Groupon heavily relied on Google Adwords, where it seemed as if every time someone would Google something there was a Groupon ad to the side which essentially turned into them having one time buyers. Groupon’s marketing efforts are not as easy to see as those of large names in business, especially the tech industry. “Groupon spent $200 million in the first quarter of this year alone on marketing (Vanity Fair 8/11).”

Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it. Groupon’s target market is any consumer of products and services in the marketplace. Where they have struggled early on, is by offering a “deal” to everybody who receives their daily email. The problem with this is, after a while, the consumer gets bombarded with these “50-75% off deals” that they never had an interest in and never will be interested in. Groupon then becomes spam to many consumers. They are continually working on their promotions to direct them to more specific target markets. So, unless they do make a change to their marketing strategy Groupon will have to continue to pump millions upon millions of dollars that they can attract these “one time...
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