Groupon case study

Question # 1

How has an understanding of consumer behavior helped Groupon grow from 400 subscribers in Chicago in 2008 to 60 Million subscribers in 40 Countries today?

Goupon figured out that people were looking for simplicity in purchasing deals. They determined what people wanted and that they would purchase

these items at a discounted price. They brought these deals to peoples hometowns and made it easy to try new things at a discounted price. Their concept was

genious the model was a win for everyone. Consumers received discounts, merchants obtained new customers without the cost of advertising and Groupon

generated revenue at the sametime creating value in the marketplace.

Question # 2

What is Goupons Promise?

Any customer can return a Groupon no questions asked even if they used it.

How does the Groupon Promise affect a consumer’s perveived risk and gognitive dissonance? The guarantee gives the purchaser

peace of mind. The purchaser knows that if they are unsatisified in any way they can just return the item for a refund even if they

have used it and are unhappy with the purchase. This allows the purchaser to make the purchase without the fear that they will be

wasting their money if they are unhappy.

Question # 3

Describe the Five-Stage purchase decision process for a typical Groupon user?

problem recognition – When the consumer wnts or needs something or has a problem that requires a purchase. infomation search – when the consumer shops for the desired product or service alternative evaluation – a consumer arrives at a final set of product choices and then must evaulate them based on individual need. purchase decision – the consumer has considered all the options and has come to a decision. evaluation – the consumer has made the purchase and must now evaluate if it was the correct decision.

**The Five Stages of the Consumer Buying Process, By Carl Hose, eHow Contributor,http://www.ehow.com/info_7896069_five-stages-consumer-buying-process.html web.

Question # 4
What are the phychological and sociological influences on the Groupon consumer purchase decision process? The recession has increased the importance of thriftiness therefore people are becoming more consious of spending and also on saving. People are looking for deals and ways to save money. Groupon can greatly influence purchasing decision because it gives them the opportunity to do something they enjoy but at the same time be conscious of saving money.

Question # 5
What challenges does Groupon face in the future?’ The first challenge Groupon is facing is customers purchasing coupons but not using them. The fear is that this will leave a bad taste in their mouth and they will cease to use Groupon or recommend it in the future.. Also some customers use the coupons and for whatever reason they don’t use Groupon again.

The second challenge Groupon is facing is managin their growth. The company has expanded into Europe, Latin America, Asia and Russia. They have accomplished this by buying out other local daily deal services. The third and final challen Groupon is facing is an extraordinary level of competition. Part of the problem is the technology that they use is not very sofisticated and easy to copy.

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