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Groupon Business Model

Groupon offers group coupons to customers in the markets it serves. If a minimum number of people sign up for a deal, it becomes available to all; otherwise, no one gets the deal that day. This reduces risk for retailers. Groupon keeps approximately half the money customers pay for coupons and does not charge retailers upfront costs. Groupon collects customer information and contacts interested consumers by email about relevant deals. It enters new markets by identifying successful local businesses and uses social media to promote deals. Groupon employs writers to draft witty descriptions of deals featured in emails and on its website.

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Pritam Patil
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122 views2 pages

Groupon Business Model

Groupon offers group coupons to customers in the markets it serves. If a minimum number of people sign up for a deal, it becomes available to all; otherwise, no one gets the deal that day. This reduces risk for retailers. Groupon keeps approximately half the money customers pay for coupons and does not charge retailers upfront costs. Groupon collects customer information and contacts interested consumers by email about relevant deals. It enters new markets by identifying successful local businesses and uses social media to promote deals. Groupon employs writers to draft witty descriptions of deals featured in emails and on its website.

Uploaded by

Pritam Patil
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Grou p o n B u s i n e s s Mod e l

Basic idea- The company o ers group coupons to cutomers per day in each of
the markets it serves. The Groupon works as an assurance contract using ThePoint's platform: if a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quan ty discounts as well as sales promo on tools. Groupon makes money by keeping approximately half the money the customer pays for the coupon. Unlike classi ed adver sing the merchant does not pay any upfront cost to participate:[ Groupon collects personal information from willing consumers and then contacts only those consumers, primarily by daily email, who may possibly be interested in a particular product or service. Groupon breaks into new markets by identifying successful local businesses, first by sending in an advance squadron of employees to research the local market; when it finds a business with outstanding reviews, salespeople approach it and explain the model, and use social marketing sites such as Facebook to further promote the idea. Groupon employs a sizable number of creative staff who draft descriptions for the deals featured by email and on the website. Groupon's promotional text for the 'deals' has been seen as a contributing factor to the popularity of the site, featuring a distinctive mix of thorough fact-checking and witty humor. The problems that can occour are if a deal is successful to large extent then the supply from small businesses may fall short also there is a risk that a customer may remain unsa s ed.

Di erence of coupon from groupon:


Unlike companies like Groupon that have group-buying models, coupon does not have a threshold number of deals that must be bought before a deal can 'go live'. Even if one deal sells one voucher, it can be redeemed. Some mes some sites like EBay charge extra fees to sellers like inser on fees, fees for addi onal lis ng of an item.

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