Paul Cubbon prepared this presentation for a talk to BCAIM, Vancouver, Jan 26th, 2011.
It represents a compilation of a range of reports, some research based and some opinion/commentary.
I have tried to distill them into something helpful for businesses considering Groupon or other deep discounters, at this stage of the evolution of model.
The intent is not to provide a blanket “good” or “bad” pronouncement, but a basis for asking informed questions and making better choices on whether or not to engage and use this tool.
Update: I have added two slides towards the end discussing the IPO
This is a presentation I made for my students. It covers different aspects of Groupon case, including marketing, finance, accounting, and corporate governance.
Update: I have added two slides towards the end discussing the IPO
This is a presentation I made for my students. It covers different aspects of Groupon case, including marketing, finance, accounting, and corporate governance.
This .ppt was designed to be a bit more self-explanatory, since this version I did not present. It contains numerous hyperlinks to various sources of information on the project.
Paul Cubbon prepared this presentation for a talk to BCAIM, Jan 26th, 2011.
It represents a compilation of a range of reports, some research based and some opinion/commentary.
I have tried to distill them into something helpful for businesses considering Groupon or other deep discounters, at this stage of the evolution of model.
Groupon and the SEC Case Study - (1) Sources important to investment decision; (2) future business prospect; (3) Groupon's accounting tell us about accounting; and (4) Groupon's accounting tell us about accounting.
I wrote this article for SES Magazine under the byline of executive leadership, showing how Groupon and group buying use a business model that works for some, not all.
Presentation at the 2015 Academy of Management annual conference for a Professional Development Workshop on "The Media and How to Publicize your Academic Research". The workshop was designed for doctoral students and research scholars interested in understanding how to publicize their research and manage media relationships. I focused on how to develop your reputation as a thought leader on social media.
This .ppt was designed to be a bit more self-explanatory, since this version I did not present. It contains numerous hyperlinks to various sources of information on the project.
Paul Cubbon prepared this presentation for a talk to BCAIM, Jan 26th, 2011.
It represents a compilation of a range of reports, some research based and some opinion/commentary.
I have tried to distill them into something helpful for businesses considering Groupon or other deep discounters, at this stage of the evolution of model.
Groupon and the SEC Case Study - (1) Sources important to investment decision; (2) future business prospect; (3) Groupon's accounting tell us about accounting; and (4) Groupon's accounting tell us about accounting.
I wrote this article for SES Magazine under the byline of executive leadership, showing how Groupon and group buying use a business model that works for some, not all.
Presentation at the 2015 Academy of Management annual conference for a Professional Development Workshop on "The Media and How to Publicize your Academic Research". The workshop was designed for doctoral students and research scholars interested in understanding how to publicize their research and manage media relationships. I focused on how to develop your reputation as a thought leader on social media.
As Groupon helps local businesses build their presence in the market, G-Team helps build the communities around these businesses. Kyle Klatt, G-Team’s Manager of Development, will discuss the company’s heritage, present best practices from nonprofits, and offer helpful tips on running a successful charitable campaign.
Slide deck overview of my term paper on the 2011 Groupon, Inc. Initial Public Offering. I focus on accounting and financial reporting issues relevant to the course material, including: non-GAAP financial measures, revenue recognition, and internal control weaknesses.
The business model canvas applied to analyze Groupon business model, a peculiar form of double sided platform. Part of my personal marketing research at www.marketingespresso.net
Prepared by the students of strategic management at the MBA program of IE Business School, this presentation analyzes Groupon’s position in the US market, the pitfalls in its current business model and recommends solutions for sustainable growth
Social Media strategy - the rise of social apponomicsTamara Obradov
Booz & Company's social media breakfast meeting presentation from November 3rd 2010. We discuss why social media does matter, what the value is and how to capture the value. It also offers for the first time ever a sizing of the social commerce market (directly selling goods through social media) in this era of social apponomics.
Charlotte Perkins Gilman, "The Yellow Wall-Paper" and related writingsChristina Hendricks
Slides for a lecture for the Arts One program (http://artsone.arts.ubc.ca) at the University of British Columbia in Vancouver, BC, Canada. This lecture is about Gilman's "The Yellow Wall-Paper" as well as her book Our Androcentric Culture, or The Man-Made World. It also discusses historical and personal context to these writings, including neurasthenia and the "rest cure" proposed by Dr. S. Weir Mitchell.
Using Social Commerce/Group Buying websites for Art OrganisationsAudiencesEastScotland
Jane Hogg will share details of Audiences East Scotland's recent research on social group buying, looking at whether sites such as Groupon, LivingSocial and Itison can harness the power of these segments to deliver new revenue and increased audience growth.
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Marketing PlanBy Tara SeitlerThe Gap Company 1.docxinfantsuk
Marketing Plan
By: Tara Seitler
The Gap Company
1
1
Agenda
Current Marketing Situation
Market Description
Product Review
Competitive Review
Distribution Review
SWOT Analysis
Micro-environments
Macro-environments
2
Current Marketing Situation
Market Description
Target Market
Market Targeting strategy
Value proposition – The Gap Company
Consumer behavior
Buyer decision principles
3
Target Market
GAP is a brand-builder.
We create emotional connections with customers around the world through inspiring product design, unique store experiences and compelling marketing.
It’s goal is to simply make it easy for customers to express their personal style throughout their life.
GAP hoped that effective Web initiative could let company to solidify its brand, improve customer relationships, serve markets that could not support a store and cut costs.
Company also believed that going online would attract new customers and steal market share from competitors.
4
Target Market- Segmentation
Target Section of Market
Residential,
Non-residential,
Mobility and
Personal
Buyers Category
Upper middle and upper class individuals
5
Marketing Strategy
Marketing objective is to create a perception in the mind of the customer about the product.
Build image of product as a different product through adopting the strategy of differentiation of porter
Restructure the business
6
Restructure Business
Transform business management focusing on from quantity to profitability
Reduce fixed cost and downsize business structure to fair size
TV set business
Product
Create competitive products on its strength
Cost structure
Thoroughly improve cost structure
Restructuring
Completion of domestic sites integration and acceleration of overseas sites restructuring
7
Pricing Decision and Strategy
Keep Retailer and Customer pricing strategies different
Captive Product Pricing
The company makes its pricing strategies by having the knowledge of its competitor`s pricing
We can include USB connectivity devices
We can include Home Theatre along with
The prices of these accessories are kept relatively than other brands.
8
Sale Strategy
Sale Strategy - Sale Through
Manufacturer whole seller/dealer consumer
Sale Out (Sales To the retailer)
Manufacturer (company) Authorized Dealers
9
Sale Through
Whole seller/retailers are the customers of manufacturers, manufacturers sell their products to the Whole seller and indirectly (through retailer) to the end consumers.
This process of selling is called “Sale Through”
Sale Out :
The company will sell the products to the retailers which are actually the customers of the Company.
There will be no medium used between the company and the retailer.
This procedure of selling is called “Sale Out”
9
Value Proposition
They are predicated value proposition from the mindset of your custome ...
Ecommerce Marketers Guide to navigating the cost of living crisis in the UKChris Ailey
Q4 2022 is going to be a challenging time for retailers in the UK. The cost of living crisis means consumers will be spending less this Black Friday and Christmas, a time usually most profitable for retail and Ecommerce sites.
Whilst 50% of retailers expect sales to increase this peak season, data also shows that 58% of consumers plan to cut back spending. Showing that expectations are out of sync with reality.
In fact, £4.4bn of non food spending is expected to be cut in the UK.
In this document, we explore the recent data and predictions for Q4, which categories will be the winners, and tips and strategies marketers can use to communicate with customers in a challenging climate.
Colin Harper, the Head of Insight for the IPM explains the huge gap between what shoppers actually do, vs what marketers think they do.
In the headlong rush for the new, integration with existing techniques can be lost, and a focus on what can be achieved by ensuring that one incentive works as hard as possible, goes at the same time.
Colin suggests that working across barriers as the IPA also suggest gets by far the best result, and flagged areas already under test, as well as those to come.
Create the Public Relations and Promotions portion of the Marketing .docxstarkeykellye
Create the Public Relations and Promotions portion of the Marketing Communications Plan using the business and information presented in the Case Study. Meet the following requirements:
In 200 words, explain the Public Relations plan for the organization.
Create two sales promotions for the restaurant. Identify the challenge and solution for each promotion. Include budgetary considerations.
Using feedback, update and make changes to the previous section of the plan.
Please adhere to the Publication Manual of the American Psychological Association, (6th ed., 2nd printing) when writing and assignment
Text:
Ethics, Regulation, and Assessment
The American Marketing Association (AMA) defines
sales promotion
as "media and non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product quality" (AMA, 2013, p.1).
However, according to Manuere, Gwangwa, & Gutu (2012), an addition needs to be made to the definition,
"One should add that effective sales promotion increases the basic value of a product for a limited time and directly stimulates consumer purchasing, selling effectiveness, or the effort of the sales force" (p. 1157).
A
promotion
can be an incentive from manufactures or retailers to encourage trade (wholesalers or retailers) or consumers to buy the product or service.
They can include coupons, rebates, contests, displays, samples, and others.
Sales
promotions
can accomplish many objectives including introducing a new brand, introducing a repositioned brand, attracting new buyers, and increasing repeat purchases from current customers.
Sales promotions offer the opportunity of free trials, cents off coupons, and other chances for the consumer to try the product.
Marketing and advertising work to create brand awareness while promotions are created to have the consumer buy now, buy more frequently, and buy over the competition.
Both manufacturers and providers of services and the consumer benefit from sales promotions.
Obviously, companies gain sales by customers purchasing the product for the first time or as a repeat customer.
The promotion might reward consumers for multiple purchases and encourage brand loyalty.
Promotions can also help the firm
liquidate
excess
inventory
,
increase motivation
for purchase of a product that is a luxury item when economic conditions lower discretionary incomes, and boost brand awareness when faced with increased competition.
The
consumers are rewarded
by receiving a free sample or item, money off the purchase price, or even a larger prize as part of a sweepstakes.
Let's not forget about the sense of satisfaction of using a coupon or redeeming a rebate!
We will look at two of the most common sales promotions:
samples and coupons.
Sampling
is another sales promotion that delivers the product to the consumer (either a trial size or full version) usually at no cost to the consumer.
The samples are deliv.
GKIC Ireland - Nov 2015, 2 secret pathways to charging premium pricesJohn Mulry
http://goo.gl/Zvy9Cv
2 Secret Pathways to Premium Prices.
In this special November meeting of GKIC Ireland we discuss price elasticity and how to position your products and service in a way so you can demand higher prices without objection.
For more information about our group visit http://gkic.ie
All of these questions are answered I just need you to read the an.docxnettletondevon
All of these questions are answered I just need you to read the answers, understand them and paraphrase them in your own way with keeping the same idea. Just rewrite it with the same idea but in a different phrase than these.
Essay Questions:
1. Identify and discuss reasons why firms become so infatuated with pricing. Why is pricing given a great deal of attention?
Answer/ ANS:
There is no other component of the marketing program that firms become more infatuated with than pricing. There are at least four reasons for the attention given to pricing. First, the revenue equation is pretty simple: Revenue equals the price times quantity sold. There are only two ways for a firm to grow revenue: increase prices or increase the volume of product sold. Rarely can a firm do both simultaneously. Although there are literally hundreds of ways to increase profit by controlling costs and operating expenses, the revenue side has only two variables—one being price and the other being heavily influenced by price.
A second reason that firms become enamored with pricing is that it is the easiest of all marketing variables to change. Although changing the product and its distribution or promotion can take months or even years, changes in pricing can be executed immediately in real time. Likewise, product, distribution, or promotion changes can also be quite expensive, especially if research and development (R&D) or production must be rescheduled. Conversely, changing prices is a very low-cost option.
The third reason for the importance of pricing is that firms take considerable pains to discover and anticipate the pricing strategies and tactics of other firms. Salespeople learn to read a competitor’s price sheet upside down at a buyer’s desk. Retailers send “secret shoppers” into competitors’ stores to learn what they charge for the same merchandise. In this age of e-commerce, tracking what competitors charge for their goods and services has become so daunting that an entire price-tracking industry has emerged.
Finally, pricing is given a great deal of attention because it is considered to be the only real means of differentiation in mature markets plagued by commoditization. When customers see all competing products as offering the same features and benefits, their buying decisions are primarily driven by price.
Having a solid understanding of these issues is important because far too many firms and their managers use a seat-of-the-pants approach to pricing by guessing the best price for their goods and services. Guessing is never a good strategy in marketing; it can be downright deadly when it comes to setting prices.
2. In many (if not most) circumstances, cutting prices to increase sales volume is not a good idea. Explain why this is so. What are some alternatives that are preferable to cutting prices?
Answer/ ANS: All marketers understand the relationship between price and revenue. However, firms cannot charge high prices without goo.
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Business Valuation Principles for EntrepreneursBen Wann
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In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
The key differences between the MDR and IVDR in the EUAllensmith572606
In the European Union (EU), two significant regulations have been introduced to enhance the safety and effectiveness of medical devices – the In Vitro Diagnostic Regulation (IVDR) and the Medical Device Regulation (MDR).
https://mavenprofserv.com/comparison-and-highlighting-of-the-key-differences-between-the-mdr-and-ivdr-in-the-eu/
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
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Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
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Groupon round up -paul jan 24-2011
1. Is GroupOn good for your business? Paul Cubbon Presentation to BCAIM, January 2011 Paul.cubbon@sauder.ubc.ca www.blogs.ubc.ca/paulcubbon/ Speaker notes in each slide provide reference links and more resources A fuller version of this presentation can be found at www.slideshare.net/pcubbon
2. A brief history Before Groupon Aggregating buyer volume to gain price reductions B2B B2C Groupon launch: Nov. 2008
3. Less than $15 to the salon for 1.5 hrs?! Follow the money. Consumer pays Groupon $29 Salon gets $14.50 from Group-on; installments over ~4 months Salon costs include staff, product, rent, utilities etc. Some costs fixed, some variable BUT, a loss maker on the single transaction SO, WHAT HAPPENS NEXT……?
4. What happens next……? IF Groupon customer is a NEW customer she could: Return to buy at full price; Only return when deep discounts are offered; Influence other consumers, positive/negative Impact staff morale, positive/negative Impact customer service, positive/negative
5. Variations with upside If 2 people consume $40, Pivo gets $25 & possible repeat Expiring inventory; plus time controlled entry slots - $11 vs. $0
6. Groupon Gap deal Aug 19th 2010 - $25 for $50 value 441,000 groupons sold = $11m+ First national deal for “local” model Mutually attractive advertising?
7. The cocaine analogy “High-low pricing is devastating to the consumer’s opinion of your brand.”
8. Seth on Groupon Sees potential based on: Fun High margin items Working with baskets of aligned goods IF an improved permission based customization ability is developed
9. Academic study 1 Harvard: “Is Groupon good for retailers?” Jan 10th 2011 Working paper: “To Groupon or not to Groupon?” http://www.hbs.edu/research/pdf/11-063.pdf Key themes Price discrimination Advertising benefit Structured approach to questions businesses should ask before deciding
10. Academic Study 2 Rice University, Fall 2010 150 Groupon businesses in 19 cities (6/09-8/10) 66% profitable; 32% unprofitable. Restaurants were the most unprofitable category, describing Groupon customers as "entitled," poor tippers, and definitely not repeat customers. Spas, on the other hand, were the most profitable (though their Groupon-using customers were still bad tippers).” 42% said they would not use Groupon again Recommendations include: selective, partial offers, designed to link to repeat behaviour.
12. Jan 19th 2011: Living Social Sells >1 million Amazon coupons: $13m+ Like Gap Groupon A national, mass advertising play For Amazon, a $15 discount off of normal basket.
17. Experiments with higher price, higher margin items Example: Men’s Fashion start-up Average consumer spend = $500 Groupon is -$150 at $50 cost to consumer Run in multiple cities Fall 2010 Net from consumer on purchase = $350 Company also gets $25 from Group-on, in 3 staggered installments. So far, only ~10% redeemed Intent is to follow-up with custom messaging to gain repeat purchase and leverage word of mouth
18. Business strategy and potential role for deep price discounts? STEP BACK Why offer discounted pricing at all? How does it fit your business model for Customer acquisition Retention Revenue growth Margin management and profitability? What are the long-term as well as short-term implications? Will deep discounting be the new norm in your category? Can you WIN with this tool? Will you start a price war?
19. Demand peaks and valleys B The conventional result of a price promotion (lower price, non-perishable). A= price down, volume up; B = price back up, Volume down; C= volume eventually recovers to pre-discount level. OUTCOME: only existing customers forward buy, at reduced cost: Diluted margin, disrupted supply chain. A C In this scenario, as price drops volume goes up as new buyers trial at the lower price; but they abandon when price returns to normal. Existing buyer keep buying. Typically, lower cost, perishable items. New buyers saw little appeal except low price. New buyers trial, attracted by low price, but appreciate the brand benefits to the extent that they re-purchase at the full price The last scenario is what you should be trying to achieve – with any price discounting. But for it to work, your core offering, the brand experience and perceived benefit has to superior to the next discounting competitor.
20. IF price discounting, alternative choices to Groupon, etc 2:1 coupons in existing media Fundraiser books Direct promotion
21. Should Groupon have accepted Google’s $6 billion offer? Google Offers News leaked Jan 20th 2011
22. “Why we invested in Groupon”… the power of data VC Greylock explains investment as a focus on the data and potential to customize offerings Techcrunch interview, Jan 11th,2011.
23. Takeaways What is your marketing strategy? Where does price discounting fit into this? (if at all.) Work through margin as well as revenue implications. Look at longer-term as well as short-term: Financial brand Can you customize to improve effectiveness? Partial discounts Time controlled Linking to subsequent behaviour Leveraging social media during and after usage. If you decide to price-discount, is Groupon (or a similar aggregator) your best choice?
26. Resources: some places for context on discount buying and online behaviour http://www.web-strategist.com/blog/jeremiahowyang http://www.altimetergroup.com/charleneli http://forrester.typepad.com/groundswell/ josh bernoff www.emarketer.com www.mashable.com www.iab.com www.econsultancy.com
Editor's Notes
PaulCubbon prepared this presentation for a talk to BCAIM, Jan 26th, 2011.It represents a compilation of a range of reports, some research based and some opinion/commentary.I have tried to distill them into something helpful for businesses considering Groupon or other deep discounters, at this stage of the evolution of model.The intent is not to provide a blanket “good” or “bad” pronouncement, but a basis for asking informed questions and making better choices on whether or not to engage and use this tool.
Very brief comment on group buying as a phenomenon: long established in formal and informal ways in b2b.Popular consumer model in China.BUT, Groupon is really very new and has gained major attention and activity.
Recent example (North Vancouver, January 2011).This is a full-value groupon, i.e. the coupon is redeemable for a full product or service, not a partial payment (see later in the presentation for partial payment groupon assessment)
As with many customer acquisition activities, the first transaction is often unprofitable. There is a whole body of literature on customer lifetime value, and break-even purchase units. However, it is not unusual for (smaller) businesses to either fail to take a lifetime value approach, and/or to fail to calculate either the full costs of acquisitions, servicing, and/or the potential cost-saving benefits of happy customers influencing others and thus reducing subsequent acquisition costs.This is not simply a Groupon or price aggregator issue, but a factor to consider in considering all marketing initiatives.
These variations have more upside.Discount on food is common in industry and this can be seen as a form of advertising and trial incentive, with a likelihood that customers will spend more than the coupon value, AND if they like it repeat at full price. Low variable costs, high fixed costs, high competition, fickle consumer behaviour: make this an attractive industry to try this type of technique, especially for new players and/or major relaunches. Downsides: setting expectations of low prices, and possibly subsidizing people who would have come anyway.Expiring inventory – Body Worlds was closing, so getting some money on a fixed cost was better than zero. They also already had a time booking mechanism which prevented them from being over-whelmed with volume. But did they need to use this technique at Xmas/New Year – they were totally full when I went. It may also encourage people to delay making full purchases on future exhibitions, in anticipation of a deep discount.
http://www.ruf.rice.edu/~dholakia/Groupon%20Effectiveness%20Study,%20Sep%2028%202010.pdf http://arstechnica.com/web/news/2010/09/even-businesses-that-made-money-with-groupon-hesitant-to-try-again.arsKEY RICE RECCS:First, social promotions could be structured so that relational behaviors of consumers are rewarded instead of transactional ones. For example, instead of offering $60 worth of food for $30, a sushi restaurant could offer $20 worth of food for $10 on each of the consumer’s next three visits. Social psychologists have shown that repetitive behavior leads to the formation of habits that are remarkably durable, and social promotions, just like other incentives, may be effective in inculcating habits, if designed appropriately. Second, rather than promoting the total purchase amount during a visit, a specific item could be promoted. Instead of offering a discount on the consumer’s total bill, for example, such as $75 worth of services for $35, a spa could offer $10 off for a facial, another $10 off for a pedicure and $15 off for a massage, during a single or multiple visits. Social promotions should offer the small business a good opportunity to cross-sell its products and services to customers and increase the amount of the total bill, a strategy that prior research on promotions has found to be successful Third, the promoted .items should be chosen judiciously so that the business is able to use unutilized capacity or sell unpopular items through the promotion.
http://www.centernetworks.com/livingsocial-sells-nearly-100000-amazon-gift-cards-in-5-hours http://adage.com/digital/article?article_id=148349 Jan 20th 2011, report on Living Social Amazon dealNote: Amazon has investment stake in LS
Higher dollar figure fashion start-up.Before you object, look at what Blue Nile did for online diamond rings …and how well Lands End, Victoria’s Secret and others do with online retail of clothing….things that were not supposed to be saleable online.This is a young company, building awareness (so the advertising aspect of Groupon is relevant to them). They are giving a partial discount on the full price of the item. They are getting some significant revenue, AND, as a newer 100% online company, importantly, they are gaining trial. If their product and service meets expectations then some repeat and positive word of mouth is likely.
Are you leading or re-acting?Have you thought through all of your options?What would happen if you did not discount deeply?Look at experiences of high-low pricing in multiple other categories.See classic HBR article: “How to fight a price war.”
http://mashable.com/2011/01/21/google-offers-groupon/ MASHABLE story Jan 20th 2011
http://techcrunch.com/2011/01/11/why-we-invested-in-groupon-the-power-of-data/ Provide some balance or counter to the more pessimistic views.Or Groupon (and others) to succeed long-term, many of their small business clients have to succeed with them, and repeat…..and so it has to make sense to them.Unless, cynically, one thinks this is a quick IPO play before it evaporates.