GROUPON




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Overview



Groupon is an online website that started in Chicago in 2008. Groupon acts as a lesion between the consumer and local companies in areas all across the United States.( Morrissey, 2010) In fact in less than two years, it has grown to 29 countries, 230 markets and boasts 17 million subscribers.( Morrissey, 2010) Groupon and local company’s team up to offer special “Deals of the day” to members of the Groupon community on products and services at a discounted rate. Groupon is a great way for local businesses to the word out about their business and generate sales and awareness. Each deal offered must be pre-purchased by a certain amount of people for the deal to be “on”.

















Why groupon?



Groupon is a great forum for companies to take advantage of because of the reach that Groupon has to potential new customers. In fact Forbes has christened it "the fastest-growing company ever" (Morrissey, 2010). Often times when a Groupon subscriber purchases a deal of the day they become loyal and reoccurring customer. This generates even more business for the company featured in the long run, and they are only charged off of the initial Groupon.









Limitations



The major downfall to using Groupon as a way to advertise your company is that people who are not subscribers of Groupon do not know much if anything about the whole process and the discounts and promotion do not reach non-subscribers. It can be viewed as a very limited form of advertising and in a way you have to count on Groupon to advertise their website well in order for your company to be advertised to as many customers as possible successfully. Companies cannot pay to be advertised on the Groupons website, however they can apply and Groupon then selects companies they wish to use based on customer feedback and reputation (Groupon, 2010).


Costs



Companies featured on Groupon do not pay for the advertisement directly. A portion of the proceed-typically the revenue is split from the coupon between the merchant and Groupon (Waddel, 2010) made on the deal of day once the transaction is completed. There are some unseen costs when it comes to Groupon if the coupon being offered becomes too popular too fast. One business owner reported that using Groupon was the worst decision she had made as a business owner because it forced her to spend $8,000 of her own money to pay rent/employees because the discount offered destroy her profits (Mui, 2010).



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Reach and Frequency



Groupon is now in 29 countries, 230 markets and has about 17 million subscribers (Morrissey, 2010) and counting. Since starting up in 2008 Groupon estimates that it has saved consumers in North America about $400 million since launching and says about 97% of the businesses it works with want to come back (Patel, 2010). Groupon has done deals with companies ranging from Wal-Mart to upscale Salons and almost everything in between (Patel, 2010). Groupon already reaches over 25 million people and are in the process of building facebook and twitter apps which will increase their reach even more (Patel, 2010).



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Scheduling


Since Groupon is an online website that offers “deals of the day” (Groupon, 2010), their method for scheduling can be considered continuous. The deal offered changes every day which constantly gives new companies the chance to be advertised on Groupons website.




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Audience











The majority of Groupons audience is in the 29-to-33 age range; 77 percent are women, and 75 percent are fully employed. (Spielburg, 2010). the typical Groupon consumer is a single women who tends to go out 2 or more times a week, graduated college, have money to spend and use social media such as facebook and twitter (Groupon, 2010). Groupons Audience is very ideal for businesses, however happen to be one of the hardest audiences to reach (Groupon, 2010) which is where Groupon comes in and breaches the gap between consumer and company.



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Groupons Target Audience



Responsiveness


Consumers are so responsive to Groupon because it acts as a tour guide and enables you to explore the city and experience what you normally wouldn’t be able to because of the discounted rates Groupon offers their subscribers (Groupon, 2010). Groupon also relies on their subscribers to spread the word about the deals of the day to their friends because people are typically more likely to purchase something if it is recommended by a friend than any other form of advertising.



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Companies that have used Groupon




GAP
Wal-mart
Levin Furniture
Shutterfly

These are just a few of the most well known, nation wide companies who have used Groupon. More often than not Groupon features local business in each area that they reach, for example salons, restaurants, bars, bakeries and so on.


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General Impact/Interesting Qualities



Groupon has found a way to reach a very targeted,centralized, desirable audience and very effectively. The way Groupon works makes it so successful because they guarantee the best and if you do not agree they work with you until you are satisfied with your Groupon experience. Groupon has changed the where people shop, eat, travel and even in some instances get they get their hair cut and all because of the genius idea of "Deal of the day". Groupon is a consumer based sight and works to make the consumer happy and really focuses on the needs and wants of people in cites Nation Wide.

One of the interesting things about Groupon is that you cannot pay your way onto their site, the company's featured are hand chosen by those at twitter because they are committed to giving the best experiences to their customers.



References


Morrissey, B. (2010, September 20). Who needs agencies? a social platform just says 'no' to madison avenue. Retrieved from http://www.adweek.com

Mui, Y. (2010, September 18). Group coupons can be too popular. The Washington Post, p. A10.

Patel, K. (2010). SUDDENLY, EVERYONE WANTS TO BE GROUPON. (cover story). Advertising Age, 81(39), 1-26. Retrieved from Communication & Mass Media Complete database.

Waddel, R. (2010, September 4). Groupon: follow the crowd. Retrieved from www.billboard.com

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Spielberg, G. (2010, August 17). The nieman journalism lab. Retrieved from http://www.niemanlab.org