Premium Essay

Groupon

In: Business and Management

Submitted By empireoffaith
Words 310
Pages 2
Groupon (www.groupon.com) is a website that offers various deals in a very low price. The main attractiveness of the offer is to help consumers buy products at a very low price and to let many people know about the deals. The businesses feel that this website is a very good tool for marketing promotions as well.

Groupon features a daily deal on the best stuff to do, see, eat, and buy in cities across the United States. By promising businesses a minimum number of customers, Groupon can offer deals that aren’t available elsewhere.

Groupon brings buyers and sellers together in a fun and collaborative way that offers the consumer an unbeatable deal, and businesses a large number of new customers. To date, it has saved consumers more than $17 million and claims it has generated millions in revenue for the businesses it features.

Groupon originated the concept of using collective buying to get a daily deal on local goods and services, and is an outgrowth of ThePoint.com, an online community launched in 2007 for organizing all forms of group action and fund-raising around a “tipping point” of required participants.

There is one deal offered each day. A minimum amount of people need to purchase the daily deal. If you accept an offer, once that minimum amount is met, your credit card is charged, and you will be sent an e-mail. The e-mail will include a link to print your Groupon. If the minimum amount is not met, your credit card will not be charged, and you do not get the deal. On average, only about one in 50 deals will fall short. In order to meet the threshold, many consumers are using Twitter, Facebook and other social networking sites to get the word out to help make sure that the limit is…...

Similar Documents

Premium Essay

Groupon

...Groupon Economic Forces Understanding economic trends is helpful in determining areas that are ripe for new business ideas and areas to avoid. When the economy is strong people have more money to spend and are willing to buy discretionary products and services. In contrast when the economy is weak people have less money to spend and are more reluctant to do so. (Barringer & Ireland, 2012). A weak economy provides opportunities for companies to sell upscale and everyday items at a “discount”. The founder of Groupon realized this opportunity and took advantage of it, however it was not an instant success, and it took the failure of an idea in order to prosper. The Idea An idea is defined as a thought, an impression, or a notion. An idea may or may not meet the criteria of an opportunity. Most entrepreneur ventures fail because there was no real opportunity to begin with; therefore it is important to understand that there is a difference between the two. (Barringer & Ireland, 2012). Andrew Mason, founder and CEO of Groupon had the idea for a website that would bring people together to solve problems collectively. Mason was offered $1 million in funding to develop the idea he created called the Point. The Point would herd people into collective social actions: marches, protest, fundraising, etc. (Saporito, 2011). Mason realized that social action was not profitable and the idea was failing. In an interview, Andrew Mason the founder of Groupon said, “I think......

Words: 723 - Pages: 3

Premium Essay

Groupon Case

...Executive Brief for Groupon To: Board of Directors From: Lindsay P Re: Strategic Development Plan Date: August 7, 2013 Executive Summary Groupon is an online daily deals company that originated in Chicago and quickly expanded internationally through acquisitions. As growth was enormous, Groupon became the market leader in the daily deal industry and decided to go public. However, since its IPO, Groupon has struggled to demonstrate profitability for its shareholders and stabilize its rapid growth. Two recommendations that will help Groupon create long-term value and profitability for its company are to strengthen its core business by operating only in the daily deals industry, and to develop a customer loyalty program in order to differentiate itself against competitors and gain loyal subscribers. Current Strategic Position Initially, Groupon started as a daily deals company that offered discounts on local services in large cities. Recently, however, Groupon has attempted to expand its strategic focus into the mobile payment and e-commerce industries in order to become the “operating system” for local commerce. In order to reduce competition and quickly build revenue, another one of Groupon’s strategies is to acquire copycat companies operating in large cities. Currently, Groupon is operating in 35 countries worldwide. Last year, Groupon was valued at $15.8 billion and is currently valued at $5.7 billion. If Groupon continues to focus on......

Words: 969 - Pages: 4

Premium Essay

Groupon Case

...Groupon Case 25 points This case is to be completed individually by each student in the class. No collaboration or discussion of the case with any other student in the class is permitted. The due date for the case is at the beginning of class on Monday, April 29, 2013 (the last day of class). Only hard copies of the case should be turned in. If you will be absent for class on that day, have somebody else in class turn it in or put it in the professor’s mailbox on the 5th floor of the RCB building. No email submissions of the case will be accepted. The two accounting standards pertaining to the case, SAB 101(SEC) and EITF 99-19 (FASB) have been posted on Desire2Learn in the same folder as the case. Students will receive an extra credit of 5 points for filling out a questionnaire about the case at the end of the semester.  The Case of Groupon’s Revenue Recognition: The Bottom Line on Top Line Revenues Groupon is the extraordinary company that has revolutionized the world of coupon marketing. In November 2008, at the age of 27, Andrew Mason, a music major from Northwestern University, launched Groupon – a name that is a blend of “group” and “coupon”. Gross billings increased from $30 million in 2009 to $713 million in 2010 (Pepitone 2011). In 2010, Forbes declared Groupon as the “fastest growing company ever (Steiner 2010). By 2011, the company had a subscriber base of over 150 million, gross billings of $1.2 Billion, and went public, raising $750 million in...

Words: 2332 - Pages: 10

Premium Essay

Groupon Strategy

...Does Groupon have a loyalty or reward program for its regular customers? You can earn $10 in Groupon Bucks whenever you refer a friend to Groupon and they buy their first deal.  To accumulate and redeem Groupon Bucks, you must create, and maintain in good standing, a Groupon customer account registered with a valid credit card.   What sort of warranty does Groupon offer its customers?Tickets purchased through Groupon are only refundable on the day of purchase. Please review their Extraordinary Events Policy for details on refund exceptions.Details about GrouponLive and Ticketed Events are listed here.Unless a deal's fine print states otherwise, any unredeemed, unprinted Groupon may be returned within the first 7 days after purchase. In other cases where a Groupon is not redeemed, returns are evaluated on a case-by-case basis. After the expiration date on a Groupon, it should still be used at the business for the amount paid, which never expires. * If Groupon sells items directly to you, the answer is usually yes. * Unless otherwise stated, returns are permitted on item(s) purchased directly from Groupon Goods within 14 days of receipt. * Beauty products, food, beverages, and perishable items or items marked "final sale" are not returnable Are customers allowed to purchase Groupon deals for areas other than what appears under their own city selection?Yes, you can.  There is an area at the top of the home screen on the website where you can enter a different zip......

Words: 3045 - Pages: 13

Premium Essay

Groupon

...features of contemporary e-commerce does Groupon Now! utilize? * Ubiquity: Groupon now offers local deals at any moment of the day. * Global Reach: Groupon features a daily deal on the best stuff to do, see, eat, and buy in 48 countries, and soon beyond (read: Space). We have about 10,000 employees working across our Chicago headquarters, a growing office in Palo Alto, CA, local markets throughout North America and regional offices in Europe, Latin America, Asia and around the world. * Interactivity: Since the payment information is saved with the Groupon account you can just tap on a deal to purchase it. The app will give you a scannable barcode that the shop offering the deal can read using the Groupon NOW app. * Personalization and customization: Groupon personalizes “deals” for users who supply some information about themselves, such as their zip code, gender and age, and it will make sure you see the deals most relevant to you. * Information density: Groupon now share with the user many promotions according to the place, so the user can compare options and select the one he likes more. * Richness: If the user finds a deal he or she likes, that person “buys” the deal online via Groupon. The user can print the voucher or bring it up to display on a mobile device. 2. What value does this service provide subscribing merchants? What value does it provide customers? SUBSCRIBING MERCHANTS * A deal in Groupon becomes available only if a......

Words: 322 - Pages: 2

Premium Essay

Groupon

...Groupon is a global leader of local commerce. The company offers its consumers thousands of discounted deals tailored to their individual needs. Groupon offers discounts on products ranging from electronics, food, miscellaneous services, luxury items, to even exquisite “Groupon Getaway” vacations. The organization has successfully dominated the market at capturing 53% market share with its well-known rival, Living Social trailing behind at an estimated 22% market share. Both companies have found strategic criteria that work well for them. One key strategic criteria that Groupon has been using is to adjust their model and offerings to meet the market and consumer demand. According to an article published by NASDAQ, “Groupon has been building up its website to offer a far greater range of products and services, national and local.”1 By using the adjustment as part of their strategic criteria, Groupon has been able to remain at number one in the industry. Groupon has also use promotion and promotional offerings as a strategic criteria. An example of this would be the offering to the consumer of “one day only” deals. For example, the organization is currently offering (as of May 21, 2014) an extra 10% fitness wear or fitness classes purchased by the consumer with a special offer code applied at the end of purchase. They also have their referral promotion of giving the consumer ten Groupon dollars if they refer a friend and the friend makes a purchase. A third strategic......

Words: 907 - Pages: 4

Premium Essay

Groupon

...1. What is Groupon and how does it work? What is Groupon’s market? What does this company do and how does it make money? Groupon is a deal-of-the-day recommendation service for consumers. Every 24 hours, Groupon broadcasts an electronic coupon for a specific service while also offering you a 50% to 90% discount if you purchase that service as long as and Groupon has a minimum number of purchasers The Groupon’s typical customers are young, well-educated, single, urban female, employed with significant earning power. Groupon make money by taking a 40 to 50% cut of all revenues generated from the daily deal. Groupon pay to the business after a deal and the business will not expend any money until customers redeem the Groupon. If subscribers who purchased a deal that failed to reach the minimum, their credit cards were not charged. Thus encourage subscribers to share a deal with friends. a. What does Groupon do that makes businesses willing to pay for its services? Groupon is a commission-based middleman. They provide a motivated customer base to the seller, and a promise to achieve a number of sales per day. If Groupon doesn't meet that promised quota, there is no need for the seller to provide any discount services, nor any commission pay to Groupon. Much more common, however, is where Groupon exceeds their quota of daily interested customers, the company earns a commission from the sales. b. Why is Groupon such a big deal? That is, why should consumers pay attention to......

Words: 917 - Pages: 4

Premium Essay

Groupon

...ACTG 630 – Case Assignment Due: Wednesday, December 3 Please submit one assignment per group. No more than 3 students per group. Read “Growing Pains at Groupon” by Dutta, Caplan and Marcinko (2014) and complete the questions included in the Case Requirements section (beginning on page 238). Instructions for accessing the FASB Codification database: 1. Go to http://aaahq.org/ascLogin.cfm 2. User ID: AAA51526 3. Password: x43AYtX ISSUES IN ACCOUNTING EDUCATION Vol. 29, No. 1 2014 pp. 229–245 American Accounting Association DOI: 10.2308/iace-50595 Growing Pains at Groupon Saurav K. Dutta, Dennis H. Caplan, and David J. Marcinko GROWING PAINS AT GROUPON s an undergraduate music major at Northwestern University, Andrew Mason eagerly sought a version of rock music that would fuse punk with the Beatles and Cat Stevens. Little did he imagine that within ten years he would be the CEO of one of history’s fastestgrowing businesses. After Northwestern and faded dreams of rock stardom, Mason, a self-taught computer programmer, was hired to write code by the Chicago firm InnerWorkings. InnerWorkings was founded in 2001 by Eric Lefkofsky, who had built several businesses around call centers and the Internet. In 2006, Lefkofsky became interested in an idea of Mason’s for a website that would act as a social media platform to bring people together with a common interest in some problem— Saurav K. Dutta is an Associate Professor and Dennis H. Caplan is an Assistant Professor, both at......

Words: 6399 - Pages: 26

Premium Essay

Groupon Now Essay

...1) Groupon Now! contains many features of contemporary e-commerce. They display an excessive amount of online market research qualities due to their personalization and customization to each and every customer. They target their customers by analyzing their customer’s location, preferences and needs. After that Groupon then identifies “deals” with local and/or national companies. This also displays a great amount of Global reach as Groupon spans throughout many countries. Interactivity also is a huge part because Groupon creates strong communication channels between both the merchant and the customers whilst also retaining a personalized customer service to both. There is a massive amount of information density because Groupon maintain all customer profiles in order to share many promotions according to the place they are in as well as always improving the interactions between them and merchants. 2) The value Groupon has for subscribing merchants is to eliminate the risk of not getting enough customers for a particular offer. This is due to the deal only becoming available when a certain number of customers sign up for a daily deal. What this does is let the merchant treat the coupons as quantity and while also giving them valuable data about any potential clientele. Also, as we were told in the video, Groupon allows merchants to personalize their deals so they only come on, and also taken down, at specific times of the day. This allows for merchants to try and attract......

Words: 962 - Pages: 4

Free Essay

Groupon

...harshly competitive climate. Could a big one—LivingSocial—actually be the next to wither away? Sources familiar with the company say they wouldn’t be surprised if the industry’s No. 2 player, trailing only Groupon, was sold to a larger company or liquidated piece by piece by spring 2014. They say LivingSocial has lacked the speed to adjust to a space that’s increasingly becoming more complex. Even worse for this nascent field, the marketplace has gotten a lot more crowded. Dozens of outfits from Yelp to marketing giants such as American Express and Bank of America—to even companies that enable retailers to set up their own offers—now provide innovative ways to link customers with local merchants. Forrester Research analyst Sucharita Mulpuru-Kodali says neither LivingSocial nor Groupon are too big to fail—even if the latter still has cash reserves in the billions from its 2011 initial public offering. “The daily deals space is saturated,” she says, “and it never provided tremendous value to merchants. And that was the fundamental flaw in the business model. They’ve survived over the last few years even when these truths were obvious because they’ve reduced the margins they ask of merchants, they extend the length of offers and they make more offers available at any time.” Groupon, in recent months, has been giving a bigger slice of voucher sales to deals-weary local businesses—a gesture meant to inspire loyalty to its platform. The lower merchant commissions were largely......

Words: 2740 - Pages: 11

Premium Essay

Groupon

...oupon Groupon: Decisions! Decisions! Decisions! Saint Leo University MBA 530 Introduction The owner and creator of Build-A-Bear Workshop, Maxine Clark, worked for large retailers before she became an entrepreneur. The CEO of one of the companies she worked for, Stanley Goodman, once made a comment that changed the way Maxine viewed the retail business, “Retailing is entertainment, and when customers have fun, they spend more money” (Quick & Nelson, 2013). She took this outlook and created a company geared towards children, because she knew children knew how to enjoy themselves. Her company, Build-A-Bear Workshop, is “the only make your own stuffed animal’ retail-entertainment experience” (Quick & Nelson, 2013). The concept allows children to choose their own bear, or other stuffed animal have it filled with stuffing, choosing a heart to place inside, stitch it up and choose from a wide array of clothing to dress it in. (Make Your Own Stuffed Animal). The process even allows you to add a recording to the bear that can be replayed and receiving a birth certificate (Make Your Own Stuffed Animal). When Maxine started Build-A-Bear many people did not believe in her idea and did not think it would last, but her business it reaching children and has opened stores all over the world (Quick & Nelson, 2013). Now there are 254 Build-A-Bear Workshop stores in the United States and more franchises overseas. The company has 3360 employees and its’ annual......

Words: 1720 - Pages: 7

Free Essay

Groupon Essay

...In Chapter 8, What Would You Do Case Groupon Headquarters, Chicago, Illinois written by L.Chao, which was published in February of 2011. The article talks about the now multi-million dollar company Groupon. Groupon is a deal of the day service for consumers, which gives them discounts on items in certain stores, and encourages people to try a variety of different restaurants and stores each day, which they earn a commission whenever successful. The article talks about the dilemma of why would companies sign with Groupon if they get more than half of the revenue? My answer to that question would be Groupon is responsible for bringing you more customers, so once a referral is successful, you now have a consumer that is aware of your business, which they will tell other people about the company. Basically partnering up with them isn't a bad idea, even though they get more than half of the revenue because your company will now get more recognition due to their coupons advertising your store. I think the reason Groupon has expanded so much in such little time is due to the fact of technology. Technology plays a big role in today’s society, & who would turn down a 40% to 60% discount anyway? Because I know I wouldn’t. Farther down in the article is about the expansion of Groupon in other parts of the world & how they must adapt to what people are likely to buy. That’s very important to me, because you have to base what you advertise to the people’s liking, because, if......

Words: 366 - Pages: 2

Premium Essay

Groupon Video Case

...JANE P. LAUDON CHAPTER 10 E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS Groupon: Deals Galore CASE 1 (a) The Real Deal With Groupon VIDEO CASE Systems URL http://www.youtube.com/watch?v=tgeh607ZXA0; L=12:42 (b) Introducing Groupon Now! VIDEO CASE URL http://www.youtube.com/watch?v=Vgk1YfInZoM; L=1:55 continued Chapter 10, Case 1 Groupon: Deals Galore 2 SUMMARY: Groupon is the leading daily-deals site on the Internet, with nearly 50 million subscribers. In 2011 it was the fastest growing company in the history of the Internet, but in 2012 it imploded to be one of the fastest falling stocks on Wall Street. Groupon Now! is a Groupon location-based service that finds local deals you can buy and use immediately using your mobile phone. It is one of several new initiatives from Groupon as it seeks to expand beyond the vulnerable daily-deals marketspace. CASE Groupon’s business model is based on the theory that everyone loves a great deal. Groupon is a popular “deal of the day” Web site offering discounted gift certificates usable at local or national companies. Each day Groupon e-mails its subscribers discounted offers for goods and services that are targeted by location and personal preferences. Consumers can also access its deals directly through its Web sites and mobile applications. Customers purchase Groupons from the company and redeem them with affiliated merchants. The discounts are......

Words: 977 - Pages: 4

Premium Essay

Groupon Case

...Case Study #1 Groupon 1) How has an understanding of consumer behavior helped Groupon Grow from 400 subscribers in Chicago in 2008 to 200 million subscribers in 48 countries today? Consumer Behavior: The action a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions. Types of consumer behavior: Routine Response Behavior, Limited Decision Making Behavior, Extensive Decision Making Behavior, Impulse Buying Behavior. Groupon: Uses consumers impulse buying to their advantage. 2) What is the Groupon Promise? How does the Groupon Promise affect a consumer's perceived risk and cognitive dissonance? "Nothing is more important to us than treating our customers well." "If you ever feel like Groupon let you down, give us a call and we'll return you purchase-sample as that." Cognitive Dissonance and Perceived Risk: When you ask yourself if you made the right decision or buy the right product. 3) Describe the five-stage purchase decision process for a typical Groupon user. Problem recognition: Perceiving a need. Information search: Seeking value. Evaluation of alternatives: Assessing value. Purchase decision: Buying value. Post-purchase behavior: Value in consumption or use. 4) What are possible psychological and sociological influences on the Groupon consumer purchase decision process? Psychological influences: Explain why and how consumers behave...

Words: 288 - Pages: 2

Premium Essay

Groupon

...1) Groupon doesn’t have sustainable business model: • Less Customer Loyalty • Easily Replicable • Huge Competition • Ponzi Scheme used to make payments to merchant 2) Groupon’s growth has been following exponential trend owing to following reasons: • 1st mover advantage • Large customer base • Continuous new acquisitions • Targeted deals to customers • Increase merchant base with no initial fee Groupon is appealing to customers: • Good Bargain • Customer Service • Local deals available • No membership fees • Huge number of daily deals • Attractive phrases 3) Groupon is a good option for Merchants: • Brings new customer • Helps to sell products which are in inventory from long time • Advertises the brand • Helps in increasing the sales during off peak hours • Builds Customer Merchant relationship • Increases revenue Merchants are excited with Groupon but there are merchants who are skeptical about it because • Can disrupt normal business • Long wait time for advertisements • Negative bargain • Can cause loss if more customer appear than expected • Long time to receive payment • It mostly attracts low end bargain seekers • Deals don’t generate repeat customers • Less customer loyalty 4) To calculate the profitability we need to assume the below mentioned points: a) number of coupons sold b) amount of purchase by returning customers c) kind of agreement(negotiation) between American apparels and Groupon Total 133000 coupons were......

Words: 498 - Pages: 2