GROUPON: HELPING
CUSTOMERS WITH
PURCHASE DECISIONS
Mike Chernishenko
Adel Al Nashi
SUMMARY
•
Andrew Mason founded Groupon in Chicago,
Illinois in October 2008.
•
He felt as though there was a lot to do in Chicago
but found himself frequenting the same
restaurants and theatres.
•
In the hopes of allowing people like himself a
means of trying new things, he created a
company based around the idea that group
purchases should be awarded discounts.
THE COMPANY
•
Groupon as we know it today came about as a result of
founder Andrew Mason’s previous endeavor – Thepoint.org
•
It began with a two-for-one offer on pizzas at the Motel bar
in Chicago and expanded across America.
•
Groupon can now be found in Asia, Europe, Latin America
and Russia.
•
Business model – Offer subscribers at least one deal in their
city each day. ( They now send over 900 deals out daily)
•
Since 2008, Groupon has employed over 5,900 people
worldwide.
THE GROUPON CONCEPT
•
The concept behind Groupon is to introduce the
consumer to events and experiences that they may
have otherwise never had by giving them a
discounted price for group sales.
•
Approximately 95% of Groupon’s offers reach the
number of buyers required in order for the merchant
to give them a discount. Once this figure is met,
Groupon and the merchant in question will split the
revenue. In addition, the merchant also gets free
advertising through Groupon.
•
Groupon prides itself in having a business concept in
which all involved parties benefit.
THE GROUPON PROMISE
•
The Groupon Promise states that that if a customer
has used a local voucher before expiry, took a
Getaways trip or attended a GrouponLive event
and were unsatisfied with their purchase, they are
able to contact Groupon within 14 days of the
experience and reach an agreement regarding
compensation.
•
This is usually done by working with the consumer to
come to an agreement regarding suitable
compensation or by simply refunding the purchase
price of the voucher/event.
•
Having the Groupon promise in place allows
skeptical customers some comfort in the fact that if
they aren’t completely satisfied, they have the
option of either getting their money back or trying
something else through Groupon.
GROWTH & UNDERSTANDING
CONSUMER BEHAVIOUR
•
Forbes Magazine called Groupon the fastest
growing company in history.
•
Groupon has increased its number of subscribers
from just 400 in Chicago in 2008 to 60 million in 40
countries today.
•
They attribute their success to the fact that their
company truly understands consumer behaviour
•
Groupon is well aware of the process that its
customers go through before making a purchase
and take it into consideration when trying to
appeal to its customer base.
FIVE –STAGE PURCHASE DECISION
PROCESS
1.
Problem Recognition
2.
Information Search
3.
Alternative Evaluation
4.
Purchase Decision
5.
Post-Purchase
INFLUENCES ON PURCHASE
DECISION PROCESS
•
Consumers want to get the most value for their
money, especially when the economy is in a state of
recession.
•
Age and gender play a significant role in the
purchase decision process
•
The majority of Groupon’s customers are female
between the ages of 18-34 with an average yearly
income of $70,000.
•
With this in mind, Groupon has decided to advertise
largely though personal electronic devices such as
computers or smartphones as they know that these
tools are almost guaranteed to get them noticed.
They also figured that their average customer owns
and regularly uses at least one of these two devices.
CHALLENGES
1.
Use of coupons
2.
Managing growth
3.
Competition

https://www.youtube.com/watch?v=iHWEXs6fOrw