Management Information System

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INTRODUCTION

Industry that author selected is Groupon

1. About Groupon

Groupon, launched in November 2008 in Chicago, US features a daily deals offered each day via email that offers savings of 50% or more on products and services on the best stuff to do, eat, see and buy in 48 countries around the world. Groupon uses collective buying power to offer huge discounts such as $100 worth of dinner for $50 and provide a win-win for business and consumers, negotiates unprecedented discounts with popular businesses and delivering more than 1,000 daily deals globally. Consumers buying the Groupon must pay its price upfront, and then have a certain amount of time, up to a year, to redeem it at the business. Groupon promotion is valid only if a ertain minimum number of consumers purchse the deal. News of Groupons spreads virally through Facebook updates and Twitter tweets on a daily basis, as people encourage family, friend and others within their networks to “tip” the deal so that everyone can get the offerUsing the principles of collective buying, Groupon subscribers get free daily emails alerting them to the deals. The deals are activated only when a minimum number of people agree to buy, encouraging subscribers to share the promotion with family and friends. By guaranteeing a large nuumber of new customers, Groupon has created a powerful new marketing vehicle for local merchants. This innovative approach to e-commerce has brought millions of dollars in new revenue to local businesses while saving millions for million subscribers globally. For more information, please visit http://www.groupon.com.

WHAT ARE THE ISSUES OF GROUPON

3. Business Strategy

Although there are many players competing aggressively in the space and more are coming in and offering deals, Groupon has emerged as the leader. Because Groupon’s strategy to offer the only the very best deals to its users. Unique business model combined with excellent pricing mechanism, wider reach and exciting offers makes Groupon, the undisputed market leader in the group buying sphere. Besides, Groupon’s incredible ability to coordinate effectively covering a wide range of geographically localized goods and services across a wide spectrum of industries has resulted in creating a niche for Groupon and clearly sets it apart from the ever increasing competitors. Groupon is always open to reach out to businesses and services that have the potential to attract the subscribers. Over the years Groupon has expanded and extended its group buying phenomenon across thousands of merchants tapping even the smaller ones. Groupon has never hesitated in extending an invitation to those existing merchants who are keen to venture in to online group-buying service or the new breed entrepreneurs who are bitten by the bug of group-buying business. Groupon never charged the business houses for advertising their goods and services but instead demanded a fixed percentage of the revenues generated by each deals sold by the business houses as its profits. For many businesses, particularly new or struggling ones, hordes of new customers flocking in because of groupon promotion may seem appealing in these recessionary times when consumers are cutting back on so many products and services. Marketers have acknowledged the effectiveness of promotions in drawing new customers to businesses. The exposure to a small business from a Groupon promotion is undeniable and its efficacy is increasing direcly as the Groupon site becomes more and more popular. Groupon’s adopts a different pricing strategy for the deals. As mentioned in its website, “We only win if you win”, Groupon makes it clear that the focus is making the subscriber happy. Based on this policy, Groupon has a fixed price for all the deals it offers on its website. The pricing is not limited to any time frame but it is valid till a fixed minimum number of subscribers accept the deal. The subscribers can enjoy the...
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