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Groupon Company’s Marketing Strategy and Organization

Introduction

Groupon is the leading Daily Deal site in the world. The company mainly focuses on clients who do shopping online. Currently, Groupon serves more than 180 markets across the United States. Its customers comprise mainly middle and high-income earners. These are people who spend most of their time at work and do not have adequate time to visit shopping malls and do business (Dev, Falk and Strook 9). Groupon’s secondary consumers comprise the university, college, and high school students who are gradually embracing online marketing (Dev, Falk, and Strook 10).

The market segment is made up of clients aged between fifteen and thirty years. Groupon’s primary business target is the small and big corporations that seek to increase market coverage by using online marketing to distribute their products and services. They include restaurants, travel companies, beauty parlors, and ticketing companies among others (Dev, Falk, and Strook 11). The United States has witnessed significant growth in mobile-related transactions. A majority of big corporations encourage mobile transactions. Consequently, Groupon has identified this market segment as a lucrative area to offer its services. The company has a superior marketing mix that makes it stand out from other online marketing platforms.

Positioning

Groupon positions itself “more as a city guide than a coupon service” (Dev, Falk and Strook 13). The company focuses mainly on high-quality merchants. The company scrutinizes its merchants to guarantee that they are of high quality. One thing that is evident for Groupon is that it values its merchants. The company would rather decline a business deal than compromise the quality of its merchant. The company endeavors to ensure that both the customers and merchants are satisfied with a transaction. Groupon presents itself as the ultimate avenue through which clients can reach new merchants and discover great deals. To the merchants, the company positions itself as the best online platform that can assist them to boost their traffic.

Distribution Strategy

A distribution strategy is critical to a business. It guarantees that goods or services reach the market. Initially, Groupon relied on a push-only model. The company distributed its coupons through emails (Narasimhan 136). It used to send millions of electronic mails on a daily basis to customers. Presently, the company has invested in a pull model to boost its market coverage. The rise in mobile traction has forced Groupon to spend on mobile technology. The company has established a mobile platform where potential customers can log in and download the coupon that they need. Indeed, the company distributes a majority of its coupons through the mobile platform. Currently, the company’s collective application downloads exceed 110 million (Narasimhan 139).

Pricing Strategy

Pricing strategy is critical because it determines the profit margin of an organization, and therefore its continuity. Groupon uses a loss leader strategy to price its products (Donnelly 89). The company sells some of the coupons at a loss to attract potential customers. The use of the loss leader strategy gives Groupon an opportunity to raise the prices of the complementary products, therefore making a profit. Groupon also uses a discount pricing model that allows it to retain its customers. For instance, the company offers up to 50% discount to clients who purchase coupons of particular products. Such a discount is enticing to customers. The customers are motivated to continue trading with the company. Mostly, the company offers discounts to first-time clients (Donnelly 91). Therefore, it is capable of ensuring that it does not operate at a loss. Groupon also uses a penetration pricing strategy to boost its market share. The only disadvantage of this pricing strategy is that the company is unable to attract full price consumers. Instead, it only attracts clients who are price-sensitive and cannot stick with the company once the price goes up.

Product Strategy

Groupon uses two product strategies to boost its revenue. The company offers discounted coupons for goods and services provided by travel agencies and restaurants. For instance, it has coupons that award customers up to 50% discount on food items (Dholakia 14). Apart from selling discounted coupons, the company has also introduced Groupon products. Currently, the company sells products directly to clients. For instance, it sells electronic goods like mobile phones and computers.

Communication strategy

Communication is paramount for any marketing strategy. A good communication strategy helps a company to pass its message accurately and reach a broad target market (Dholakia 111). Groupon has an effective communication strategy that enables it to reach a wider audience. The company has a marketing team that conducts investigations on trends in media usage to determine the appropriate channel to use to reach the target customers. Additionally, the company is keen to ensure that it informs clients about its products at the right time. Presently, Groupon has Twitter, LinkedIn, and Facebook accounts that enable it to communicate with potential clients (Dholakia 27).

The company posts messages about its latest products and services on a regular basis to create awareness before releasing them to the market. Once the products are introduced into the market, the company maintains the publicity to alert customers. The company’s leadership also institutes a public relations program to sell Groupon’s brand. Groupon offers discounted coupons for a short period to draw market interest. Additionally, to convince the merchants, the company engages in personal selling. To reach many customers, the company’s communication strategy encourages transactions through the mobile platform.

Marketing Research

Marketing research helps an organization to understand the buying behavior of clients (Anand and Aron 1549). Groupon gathers customer feedback through its Twitter, LinkedIn, and Facebook accounts. The feedback helps the company to identify the qualities and benefits that the merchants and clients value. It underlines the reason Groupon keeps on changing its marketing mix. The company analyzes the attitude of retailers and consumers and addresses them to curtail competition from other online marketing companies. Groupon conducts a brand awareness study to ensure that merchants and customers are aware of its products and services. The study helps to restructure the company’s communication strategy.

Marketing Organization

The company has a chief marketing officer who is in charge of the marketing department. The officer works in liaison with a team of marketing officers who help to sell the company to merchants and customers. The chief marketing officer manages the company’s sales campaigns (Donnelly 93). Besides, he also manages Groupon’s public relations as well as sales promotions.

Conclusion

Groupon is an online marketing company that serves as a link between customers and merchants. The company sells redeemable coupons to customers. Besides, it sells some products directly to clients. Groupon has an efficient marketing mix that enables it to reach a broader customer base and overcome competition. The company has a strong communication strategy that facilitates the creation of brand awareness among clients. Groupon conducts marketing research to determine customers’ needs and satisfy them.

Works Cited

Anand, Krishnan and Ravi Aron. “Group Buying on the Web: A Comparison of Price-Discovery Mechanisms.” Management Science 49.1 (2008): 1546-1562. Print.

Dev, Chekitan, Laura Falk and Laure Strook. “To Groupon or Not to Groupon: A Tour Operator’s Dilemma.” Hospitality Report 11.19 (2011): 6-18. Print.

Dholakia, Utpal. “How Customer Self-Determination Influences Relational Marketing Out-Comes: Evidence From Longitudinal Field Studies.” Journal of Marketing Research 43.1 (2006): 109-120. Print.

Dholakia, Utpal. How Effective Are Groupon Promotions For Businesses? Texas: Mimeo, 2011. Print.

Donnelly, Kathleen. “Coupons of the 21st Century: The Golden Age of the Daily Deal Industry.” The Elon Journal of Undergraduate Research in Communications 3.2 (2012): 86-94. Print.

Narasimhan, Chakravarthi. “A Price Discrimination Theory of Coupons.” Marketing Science 3.2 (2007): 128-147. Print.