Groupon and the 4 P's
Product
The Groupon product is certainly categorized best as an innovative product. Groupon was the first to enter the “deals” market in a world of social commerce. Social commerce is a subset of e-commerce that involves the use of social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. While Groupon isn’t the first company to use social commerce in their distribution strategy, however, they are the first company to introduce “deals” within social commerce. In 2004, Woot.com was launched offering a deal a day, however, it was a modified version of earlier dot-com-bubble sales like Ubid.com which focused on technology related products. In November 2008, Groupon entered the market and became the first company to offer deals that were only triggered after a group of people purchased the deal, increasing the social aspect of the daily deal concept. Their complete deal package, including a marketing and advertising component for the merchants, has never been done before with such refinement.
With ideal timing of a recession in 2008, Groupon capitalized on a need in the market for merchants to target shoppers, as well as, helping consumers to find lower cost products. As an innovative product, the recessionary market conditions proved to be as strength for Groupon. However, although Groupon is an innovative product, its deals are naturally passing through the various stages of the product life cycle and deals are now approaching the “maturity” timeframe. The most poignant aspect of being in the maturity stage for Groupon is that with increase competition in the market, profits are beginning to stabilize or decline. This will prove for its innovative deals to shift from being a strength for Groupon to a weakness as the product becomes more mature in its life cycle.
Promotion
The nature of a Groupon’s promotion strategy is based on a pull strategy where Groupon
The Groupon product is certainly categorized best as an innovative product. Groupon was the first to enter the “deals” market in a world of social commerce. Social commerce is a subset of e-commerce that involves the use of social media, online media that supports social interaction and user contributions, to assist in the online buying and selling of products and services. While Groupon isn’t the first company to use social commerce in their distribution strategy, however, they are the first company to introduce “deals” within social commerce. In 2004, Woot.com was launched offering a deal a day, however, it was a modified version of earlier dot-com-bubble sales like Ubid.com which focused on technology related products. In November 2008, Groupon entered the market and became the first company to offer deals that were only triggered after a group of people purchased the deal, increasing the social aspect of the daily deal concept. Their complete deal package, including a marketing and advertising component for the merchants, has never been done before with such refinement.
With ideal timing of a recession in 2008, Groupon capitalized on a need in the market for merchants to target shoppers, as well as, helping consumers to find lower cost products. As an innovative product, the recessionary market conditions proved to be as strength for Groupon. However, although Groupon is an innovative product, its deals are naturally passing through the various stages of the product life cycle and deals are now approaching the “maturity” timeframe. The most poignant aspect of being in the maturity stage for Groupon is that with increase competition in the market, profits are beginning to stabilize or decline. This will prove for its innovative deals to shift from being a strength for Groupon to a weakness as the product becomes more mature in its life cycle.
Promotion
The nature of a Groupon’s promotion strategy is based on a pull strategy where Groupon