GROUPON

Executive summary

•  This semester our group chose to research the company

Groupon.

•  We researched the company as a whole, as well as the company’s benefits and weaknesses.

•  We also conducted various types of research methods to get an insight on not just the company, but the consumers as well.

Company Overview

•  Groupon was founded in 2008 by former CEO Andrew Mason.

•  Groupon is one of the leading deal-of-the-day websites.

•  The company gives people the opportunity to purchase

discounted deals for businesses in their area. Products include: Dining deals, Getaways, Goods, and many more.

•  Groupon is a Chicago based company, which now serves

over 40 countries across the Globe.

Marketing Issues

As marketers we wanted to focus on:

•  Why people purchase or don’t purchase Groupons?

•  What can Groupon do to persuade people to join or stay as

members of their site?

•  What similarities consumers share?

•  How informed are people about Groupon?

Research Objectives Measure the percent of consumers between the ages of 18-35 that: •  Are Groupon members

•  That have cancelled their membership

•  That are male users

•  Have purchased 1 or more Groupon(s) between the last six months

•  Have purchased getaway and/or dining deals

•  Have purchased spa and/or beauty treatments

Swot Analysis Strengths:

•  Groupon was one of the most fastest growing websites in e-commerce.

•  Groupon has over 35 million users and the amount is still increasing.

•  Groupon has gained much popularity in the social media department allowing them to have a younger and active consumer base.

•  Groupon encourages group activities and local businesses, allowing

for a more active community, and growing community economy.

Swot Analysis

Weaknesses:

•  Groupon only advertises in local business.

•  Business owners lose a percentage of profit by lowering

their prices up to 60 percent.

•  Businesses only benefit if consumers become continuous.

•  Only a web base company.

Swot Analysis

Opportunities:

•  Groupon can specialize in a particular product to enhance their user base.

•  Groupon can have celebrity endorsers, allowing them to get more exposure.

•  More television and radio promotions can be helpful to get an older target market.

Swot Analysis

Threats:

•  Groupon has and is going to continue having growing competitors. For example (living social/ saveology..etc)

•  Businesses would not want to use Groupon anymore if they don’t see success nor profit coming from Groupon.

•  Competitive sites can result in decrease of members.

•  People are not well informed or aware of the company.

2008   2009   2010   2011-­‐2012  2007   2013  

Development  The  website  “The  Point”    was  created  for  consumers  banding  together  to  increase  buying  power.  

Growth  Groupon  expanded  into  3  markets.  EsFmated  sales  of  $1  million  dollars,  with  more  than  60,000  subscribers.  

Decline  A  net  loss  of  $146.5  million.  Subcribers  were  also    unhappy  with  their  services.  

Introduc4on  Groupon  website  was  launched.  CollecFng  $238,000  from  its  first  sales  for  a  boat  tour.  

Maturity  Groupon  was  now  in  28  ciFes  and  InternaFonal.  Company  valued  at  $1.35  billion,  with  35  million  subcribers.  

CEO  Fired  Andrew  Mason  was  fired  from  Groupon  due  to  sales.      

LIFE CYCLE

Product  Life  Cycle  

Sales

2012 2011 2010

Gross Profit 1,615,552 1,351,551 270,045

Market Share and Rank

Competition

Groupon $2,330,000 75%

Living Social $536,000 17%

Travel Zoo $151,168 5%

Local Corp $78,763 3%

Market Share Comparison

Consumer Demographics

Consumer Demographics

Consumer Demographics

Consumer Demographics

Consumer Demographics

Consumer Demographics

Consumer Consumption & Patterns

Most Popular 1.  Hair Removal 2.  Food & Grocery 3.  Massages

Least Popular 1.  Women’s Clothing 2.  Treats 3.  Bar and Club

Market Trends

•  Social couponing is more than a fad - it is a serious business and an entirely new way of marketing.

•  It engages consumers because of the frequent and the variety deals that they can reach from their computer and/or mobile device.

•  Especially with the economy hitting a recession a few years ago, this allows consumers to live an active and social lifestyle without hurting their wallet.

Primary Research

Our Cause: Get an insight on consumer’s thoughts and experiences about Groupon.

Our Method: Focus Group

Focus Group Analysis •  Women use Groupon more for its services, they like to use the spa and

hair care Groupons.

•  Men like Groupons for outdoor and active activities, such as skydiving and sporting events.

•  People would not generally buy these items or services if it weren’t a deal.

•  People enjoy online shopping because it is easy, convenient and allows them to compare deals with several other websites.

•  People would purchase more often if they offered deals on concerts or events. People believe the quality of the concert wouldn’t decrease with a purchase of a Groupon.

Descriptive Research

Method: Survey

•  Online

•  Self-administered

•  Non- Probability

•  Convenience

•  Survey Monkey

Survey Research Goals •  Determine the percentage of Groupon users who are male. •  Determine the percentage of users who have subscribed to

Groupon.

•  Determine the percentage of users who shop online.

•  The percentage of those who have purchased a Groupon deal before.

•  Discover the ranking between Groupon and competitors.

•  Discover the number of consumers who would recommend Groupon to others.

Final Sample

•  A total of 51 people completed our survey when we would have liked to have 100 responses.

•  66.7% female respondents and 33.3% were male.

•  All respondents were online shoppers.

•  Only 70% of respondents were current Groupon members.

Summary of Research

Summary of research

Survey Error •  The first major thing that hurt our survey results was due to our

sample population. Our group had too narrow of a sample population; we determined it based on who had subscribed to Groupon.

•  There was a question on our survey that didn’t give the respondent a choice to pick 0, which let to us having data that wasn’t accurate.

•  Question order error: we should have asked them more information about online shopping before jumping into Groupon information. Our group should have asked more questions based upon their demographics.

•  Overall, we had many flaws in our survey that we will all know to take into account for the next time.

Systematic Survey Error •  Our filter questions required all respondents to be members of the Groupon

website.

•  Not all respondents completed all the questions.

•  Ratio questions were not written clearly or correctly.

•  Respondents were not clear of some answers. There was a question where respondents had to rank four websites. Some respondents did not know what all four websites were; therefore they were confused as to what to choose.

•  There was some bias involved. Almost everyone took this survey knowing it was about Groupon; therefore they already had opinions about the company before starting this survey.

Recommendations

•  When conducting survey research make sure that filter questions are clear, and have a wide answer range.

•  When creating survey questions, it is important to include everyone.

•  When conducting focus groups, it is important to have an equal number of men and women.

•  It is important to double check questions both in surveys and

focus groups. When asking questions to a consumer is good to be as neutral as possible.