Table of Contents
Executive Summary…………………………………………………………………………………………………………………...2
An Introduction to Groupon……………………………………………………………………………………………………...2
Company Overview………………………………………………………………………………………………………..2
Background……………………………………………………………………………………………………………………2
The Marketing Issue………………………………………………………………………………………………………3
The Research Objective………………………………………………………………………………………………...3
Summary of Situation Analysis………………………………………………………………………………………………….4
The Brand and Product………………………………………………………………………………………………….4
SWOT……………………………………………………………………………………………………………………………..4
Sales……………………………………………………………………………………………………………………………….6
Market Share and Rank………………………………………………………………………………………………….7
Groupon Consumer Demographics ……………………………………………………………………………….8
Consumer Consumption Patterns ………………………………………………………………………………….9
Market Trends………………………………………………………………………………………………………………..9
Primary Research Information: The Focus Group and Online Summary…………………………………..10
Survey Research ………………………………..………………………………………………………………………..11
Characteristics of Final Sample…………………………………………………………………………………….11
Summary of Research Findings…………………………………………………………………………………….13
Survey Error …………………………………………………………………………………………………………………15
Managerial Recommendations and Conclusion……………………………………………………………………….16
Works Cited ……………………………………………………………………………………………………………………………18
Executive Summary
Our paper details our Marketing Strategy and Market Research for Groupon, Inc: an
online website featuring daily coupon deals and was established in 2008. Groupon offers
multiple coupons services: food, getaways, events and activities, beauty and spa, fitness,
shopping, and goods. While services have begun to decline over the pervious year and company
decisions have led to unhappy businesses and confused consumers. Over the previous
decisions, our group has decided to conduct research on the consumer consumption habits and
market trends of the Groupon consumer.
An Introduction to Groupon
Company Overview
Groupon is a Chicago founded deal-of-the-day website that partners up with various
businesses to give their consumers the best price. Groupon first started in the Chicago market
in 2008, and soon expanded to other big cities in the United States. It now serves over 40
countries around the world. Groupon gives a consumer a chance to purchase goods and
services near your hometown or in any of its markets nationwide for an economic price. The
process is simple; you enter your email, zip code and automatically deals for businesses around
your area show up on your Groupon home page. They have no secret fees or hidden
information about their deals. In the last year and a half, Groupon sales and revenue have
managed to decline due to a heavy load of competitors and management issues.
Background
These deals are called “Groupons,” the words group and coupon put together. There is a
Groupon for almost anything. You can narrow your choice of Groupons by choosing the
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categories, which you are most interested in. There are categories such as dining deals, spa and
beauty treatments, family activities, goods, and getaways. Deals include any big or small
restaurants in your area. There are deals for up to 80 percent off the original price.
There are more deals than the previous categories mentioned. Groupon also has deals for
various holidays and/or special events around your area. In the Chicago area we can sometimes
find deals for Cubs baseball tickets and the Wavefront music festival. There are also gift ideas
for Mother’s Day and other upcoming holidays.
Marketing issues and Objectives
Groupon had succeeded in providing a large network of merchant deals to a large base
of global consumers. But, there are many companies offering similar daily deals to services to
consumers. Once Groupon’s IPO, its stock is down more than 82%. Groupon fails because the
small businesses offering the discounts end up losing money. The theory behind small
businesses doing this is even though they would lose money on coupons, they believed they
could attract long-term customers. Unfortunately, this theory is wrong. The businesses find
customer volume falls off after the deals are done and they are not much better off than before
they offered the coupon. The purpose of this research project is to determine what Groupon
can do to keep consumers purchasing these “Groupons.”
Research Objective
In order to determine our marketing issue, our group must use many resources to
gather the market research. The issues that our group chose to explore were consumer based.
We wanted to measure the percentage of men and women between the ages of 18-35 that
were Groupon members. If people weren’t Groupon members at the time, we wanted to find
out if they were ever a member and had cancelled their membership. If their membership was
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cancelled we wanted to know why. For those that were members, we wanted to see which
ones have actually purchased one or more deals. Once we identified which people are
members, we wanted to see how frequently they purchase a Groupon, and which Groupons
were the most popular. We noticed before we started this class project that Groupon
consumers were primarily women. In our project we wanted to know the percentage of men
compared to the percentage of women who use the Groupon website. We also wanted to
know what would attract more men to the site, and how we could raise the number of men
subscribers. This marketing research would give us a better idea of the consumer perceptions
towards Groupon.
Summary of Situational Analysis
The Brand
Groupon offers discounts for services at local businesses, goods, and getaways.
Businesses that frequently participate are spas, salons, and restaurants. Discounts often hover
around 40-60% off of retail price. In order to view these deals, a consumer must subscribe by
entering an email address when entering the website or through the mobile app. Groupon has
expanded into 175 North American markets and 47 countries world wide. Groupon is the
pioneer of the daily coupon deal websites.
SWOT
Strengths:

Groupon has expanded tremendously within a five-year time span. They have 150
markets in the U.S. and 250 markets nationwide in 45 different countries.

The Groupon app has become one of the most popular apps used by smart phone users.
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
Website is clear to understand and navigate, not as time consuming as clipping coupons.
There are many different categories people can browse from, also allowing them to
customize their own page.

Groupon has over 35 million users and the amount is still increasing.

No cost to promote your business

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.
Weaknesses:

Groupon only advertises 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.
Opportunities:

Groupon can continue to expand to more cities and more countries nationwide, allowing
for more markets to develop.

They can join forces with bigger companies and retailers such as big stores like Target,
Walgreens, or other web markets like Amazon.

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.
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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 or profit
coming from Groupon.

Competitive sites can result in decrease of members.

Groupon has many one time users that don’t really understand nor are well informed on
how the site functions.

There are always risk of financial loses.
Sales
The total revenue for the past three years for Groupon is listed before. This was taken
from the annual sales report that was listed on their website.
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Market Share and Rank
The graph below compares Groupon to its major competitors from 12/2009 to 11/2010.
Groupon has the largest share in the market. LivingSocial is a private company that
provides a service similar to Groupon. It owns the second largest share of the market, at 17%.
Travelzoo provides discounts on hotels, air- fare, and daily deals. It owns 5% of market share.
Local Corp. provides businesses with an affordable way to market and advertise online and
makes up for 3% of the market. The data below shows current standings for this market.
Market Share: Daily Deal Comparison
Websites
Groupon
LivingSocial
Travelzoo
Local Corp
2,330,000
536,000
151,168
78,763
75%
17%
5%
3%
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Groupon Consumer Demographics
Pulled from Groupon’s website, we have concluded that Groupons demographics are
young, intelligent, working, single women, with disposable income to spend. About 68 percent
are aged 18 to 34; 50 percent have a Bachelor’s degree; 49 percent are single; 77 percent are
women; 75 percent work full time; and 29 percent earn over $100,000.
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Consumption Patterns
Consumption patterns are not quite the same as certain companies that sell and offer
products at all times. Groupon has time limits on their deals, which don’t last more than three
days. There are many options such as food and drink, events and activities, beauty and spa,
health, goods, and getaways that are being purchased every day from consumers. Groupon’s
site mentions how many Groupons have been bought. Looking over the website they range
from 10 being purchased to over 1,000 purchases on a single Groupon.
Market Trends
Social couponing is more than a fad - it is a serious business and an entirely new way of
marketing. This allows consumers to keep an eye on trends in mobile commerce, locationbased push notifications, and a movement toward loyalty and immediacy in social couponing. It
engages consumers because of the frequent and the variety deals that they can reach from
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their computer 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 Information: The Focus Group and Online Summary
Beginning out research process, we understood that we would need to conduct a Focus
Group that could provide insights about their attitudes and history with Groupon. After
conducting the Focus Group, we gathered the following conclusions:

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 dislike the amount of emails Groupon sends a day.

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.

People worry about the perception of how employees of businesses act towards those
with a Groupon.
The conclusion of our Focus Group was that only a few have purchased a Groupon, they
did it because of the convenience and price of the deal and wouldn’t have purchased them if it
weren’t for the deal.
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Survey Research
After reviewing the answers we received from out Focus Group, it was only able to
answer a few questions my group needed to know and we knew that addition research would
be needed. The Focus Group didn’t allow us to receive detailed information about the thoughts
of consumer’s perception toward Groupon. With this thought in mind, our team developed a
self-administered survey that we would distribute amongst others. We created this survey to
provide more precise answers to consumer’s perceptions, as well as provide answers to our
questions that we weren’t able to receive from the Focus Group.
While this is a college class, there was a lack of time and research funds, our group
distributed the survey online via personal email and social media. The survey was designed to
answer the following questions:

Determine the percentage of Groupon users between male and females.

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.

The ranking between Groupon and competitors.

The number of consumers who would recommend Groupon to others.

Determine those who are satisfied with Groupon
Characteristics of Final Sample
A total of 51 people completed our survey when we would have liked to have 100
responses. Our group only had one question that narrowed down our results. Our population
sampling question was if they currently subscribed to the Groupon website. We first asked if
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they shopped online. Our following question, which was also our population sampling question
asked if they subscribed to the Groupon website. We also asked if the respondent wasn’t
currently a member, were they ever a member of Groupon. We asked other questions like how
many Groupons have they purchased, what they like and dislike about Groupon, and if they had
the Groupon application on their phone. We had two questions that were based upon rating,
we asked which one they liked the most between competitors and asked them about the
selection of deals, easy to navigate, and if the deals were easy to purchase. Based upon the
gender, we had 66.7% female respondents and 33.3% were male. We were quite shocked to
see that high of a percentage in males, because Groupon has overall 22% male demographics.
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Summary of Research Findings
As a whole we learned about the various forms of survey error during research. In our
findings the type of research required is descriptive the degree to which the use of a product
varies with age and sex. We realized that Groupon is targeted mainly towards women and
during our research we examined the various methods Groupon can use to appeal to men. We
accumulated many research objectives, one was to determine what factors prevent consumers
from using Groupon and out of the total 65% say that it’s a location issue, 30% find the website
a bit confusing and others don’t like the variety of deals. Another research objective was
measuring the percent of men and women ages 18-50 who are Groupon members; our
conclusion is that the expansion of Groupon attracted primarily 68% of 18-34 year old
subscribers, and 18% of 35-44yrs, as well as 11% of 45-55yrs of age. When examining gender
they tend to be female that are dominant by 77% and only 23% are men. Not too many factors
reduced the accuracy of our survey estimate; the various forms of survey error didn’t affect our
research findings, most commonly sampling error is frequently an issue, even non-researchers
have a basic understanding due to the reference “margin of error.”
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Survey Error
Our survey results were not as accurate as we planned due to a few different types of
error that we realized. The first major thing that hurt our survey results was due to our sample
population. Our group had to narrow of a sample population; we determined it based on who
had subscribed to Groupon, when we should have focused on those who’ve shopped online.
This reflected on an administrative error, we should have informed our respondents that
subscribing to Groupon was just accessing the website and giving them their email. 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.
Survey Systematic error
Five types of systematic errors that occurred during the design and execution of our survey
study go as follows:
1. The main systematic error, which hurt our results, was our filter questions. Our filter
questions required all respondents to be members of the Groupon website. This could
have been avoided if we would have asked a question, which were more open and not
as narrow.
2. Not all respondents completed all the questions. This could have been avoided if all
questions would have been mandatory.
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3. Ratio questions were not written clearly or correctly. There was a question that asked
how many Groupons respondents had purchased in the last six months, there was not a
“0” option, so many skipped the question. This could have been avoided if there was an
option for a “0” response.
4. 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. This could have been avoided if we
had an “Other” option or perhaps a neutral ranking of zero.
5. There was some bias involved. Some of our peers and friends on our social network
knew this was a class assignment so they took the survey to help us. Almost everyone
took this survey knowing it was about Groupon; therefore they already had opinions
about the company before starting this survey.
Managerial Recommendations and Conclusion
When conducting survey research make sure that filter questions are clear, and have a
wide answer range. Having narrow filter questions makes it hard for us to get an accurate
sample. Making questions clear and easy to read makes it easier for the respondent to conduct
the survey and understand it completely.
When creating survey questions, it is important to include everyone. Groupon is a
website where you must submit your email to access the site. There are people who have use
Groupon but perhaps are not members yet. They have access through the site from friends. It is
important to not only make questions directed to members, but also make questions to people
who are non-members.
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When conducting focus groups, it is important to have an equal number of men and
women. Having an equal number of both will let us know more about the reasons why each like
or dislike Groupon. Having an equal number of both, will give each gender and equal chance to
express their opinion, and also allowing us to get more information we need.
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. We don’t want to persuade the
consumer to answer they way we want them to. We also don’t want them to feel
uncomfortable with their answers. It is important to avoid loaded questions, which are words
or phrases made to promote a specific response. Avoid double barrel questions, which are two
or more questions in one. Lastly, we should avoid taxing questions that ask questions, which
the consumers won’t be able to answer.
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“Groupon, Inc." International Directory of Company Histories. Ed. Jay P. Pederson. Vol. 122.
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June 2012. Web. 24 Feb. 2013.
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