Everyone gets deal !
Groupon takes a portion of the sales of the coupon as a commission.
Businesses get easy access to potential customers with risk free.
What can we get?
We get huge discounts usually more than 50%!!!
Groupon is a leading online company that offers interesting discount opportunity to its registered members. Groupon advertises and offers deep discount. Then, only if minimum number of customers is met, those customers get deal.
This marketing strategy is based on Word of Mouth through social media such Facebook and Twitter. Customers who have already decided to take offers try to find more potential customers.Group coupon is very simple but sophisticated marketing strategy. The basic concept of this business strategy has already existed more than 20 years ago. In Japan, many companies have heavily relied on word of mouth, and customers were trying to find more potential customers such as families and friends to get companies’ offers. And there are a lot of evidences that many companies have succeed to get more loyal customers. However, in that time, Internet was not available yet. People had to communicate directly.
I believe group coupon is very sophisticated strategy, and these rapid growths of social media market enable both Groupon and its competitors to operate effectively.
Sources:
Recently a study by Utpal M. Dholakia, a marketing associated professor from the Rice University Business School shows that 32% out of 150 businesses which have used Groupon services agree with the deal is not profitable and they are not willing to use it in the future. As he said "Exposure is good. But exposure is not necessarily free if you're losing money on every sale," …. "Small businesses need to be clear about what they want to achieve from these promotions." So, please be carefully with extreme opinions, let leave room for real experience instead to sale the Groupon model ourselves without before think rationally and get some data.
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