Groupon1
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Groupon's business model involves offering daily deals or "groupons" for goods and services provided by local businesses. Merchants pay Groupon a commission (around 50%) for promoting their deals to Groupon's email subscribers. This provides marketing benefits to merchants without upfront costs. While it generates buzz and discounts for customers, critics argue it relies on short-term price sensitivity rather than building long-term customer loyalty. Groupon faces competition from other daily deal sites that may adapt the group buying model in different ways such as localized sales teams.
Groupon1
- 2. INTRODUCTION
- 4. INTRODUCTION
- 10. GROUPON-BUSINESS MODELOffers Groupon (group coupon) in each market it servesWorks as an assurance contractReduces risk for retailersCompany earns approximately 50% of what customer pays for a coupon
- 11. GROUPON-BUSINESS MODELMerchant does not pay any upfront cost to communicateConsumers interested in buying products are entertained through e-mailEntry into new marketsUse Social networking site to promote ideas
- 12. GROUPON-BUSINESS MODELPromotional text for deals contributes to the popularity of the websiteCustomers received coupons, some of which included coupons from FTD and Gap
- 13. GROUPON-BUSINESS MODELPROSBuzz factor price discriminationNegative working capitalDelivered benefits to the consumer segmentPower as an online marketing/advertising tool was immense
- 14. GROUPON-BUSINESS MODELCONSGroupon redeemers were price sensitiveModel did not lay stress on repeat visitsProfitable deals fetched less repeat valueModel did not encourage awareness and trial elementsMerchants did not show interest in doing business again
- 15. VALUE CREATION
- 16. Value creationPower as an online marketing/advertising tool was immenseDelivered benefits to the consumer segmentNegative working capitalprice discriminationBuzz factor
- 17. TARGET GROUP
- 18. Target groupPrimarily composed of female customers.
- 19. The deals are often focused on the health, fitness and beauty markets.Adaptability of the model in different market situationGeographic markets
- 21. ALTERNATIVE APPROACHES IN PRODUCT/MARKET DEVELOPMENTLeveraged centralized call centersPopulation centers and internet usage patternsPairing zip codesSales force still needed in new markets especially small stores
- 22. Groupon introduced a new concept known as Groupon StoreConcept of group buying was done away.There was no minimum discount thresholdDifference in merchant payment
- 23. Groupon Merchant Services platformE-commerce solution for merchantsGrouponWorks.com offered an array of services
- 24. In March 2011 Groupon announced plans for Groupon NowGroupon-Now an innovative mobile applicationFocus more on providing immediate offers based on user, location and preferences
- 27. Capital Intensive
- 28. More about social discovery
- 29. Did not require tipping points for the deal to become active
- 30. Employed local sales force in each city it was operating(B2B) Core model similar to Groupon
- 31. Believed in the notion of attainable luxury
- 32. Betterment of merchants Leveraged the concept of group buying
- 33. Deals were live for a full week rather than 24 hours
- 34. Sales representatives personally visited each merchant that ran a deal(B2B) Focuses on mothers and their buying power
- 35. Introduces one new deal every day in each of the local markets it serves.
- 36. The deal is mailed to local and national Plum District subscribers. Deal-of-the-day website based in Ft. Lauderdale, Florida
- 37. Features discounts, coupons, gift certificates, and gift cards
- 38. Participating businesses typically offer discounts from 50% to 90% on services and productsCRITICISM
- 39. CRITICISM
- 40. QUESTIONS???