Establish and Adjust the Marketing Mix: Groupon Case Study

This case study examines Groupon's rapid growth in the e-commerce sector, focusing on its marketing mix, strategies, and customer acquisition methods. The analysis covers Groupon's key characteristics, including its deal-based sales model and penetrative pricing policies, which attract customers with lower prices. It discusses various promotional techniques, such as daily emails, referral programs, and 'Buy for a Friend' options. The study also highlights Groupon's marketing strategy, including its use of mobile apps, SEO, and social media. The author concludes by suggesting the application of Groupon's strategies in a work setting, emphasizing its effectiveness in identifying customer preferences and offering budget-friendly deals. The case study references several sources to support its analysis.

Running head: ESTABLISH AND ADJUST THE MARKETING MIX
Establish and adjust the marketing mix
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ESTABLISH AND ADJUST THE MARKETING MIX
Executive Summary
The case study deals with Groupon’s meteoric rise in e-commerce. It also speaks about
Groupon’s marketing mix, strategy and what attracts customers to purchase from the website.
Also Groupons different ways of promotion have been discussed here which relates to its
attractive pricing and the way it connects to buyers through advertisements.

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ESTABLISH AND ADJUST THE MARKETING MIX
Table of Contents
Introduction..........................................................................................................................3
History of Groupon and Living Social............................................................................3
Groupon’s key characteristics..........................................................................................3
The Pricing Policy...............................................................................................................4
Groupon’s different ways of promotion..............................................................................4
Groupon’s marketing strategy.............................................................................................5
I would use Groupon at work..............................................................................................5
Conclusion...........................................................................................................................5
References............................................................................................................................6

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ESTABLISH AND ADJUST THE MARKETING MIX
Introduction
History of Groupon and Living Social
Groupon is an e-commerce website based in Chicago, America. The website connects
subscribers to sellers through purchase of goods, travel and services in as many as twenty eight
different countries. Groupon was first launched in November 2008. They opened their business
in Chicago first and then moved into cities like Boston, Toronto and New York. According to a
survey in 2010, October, Groupon was present in 150 different cities in North America and
hundred more cities in Asia, South America and Europe. It also had around 35 million registered
users. LivingSocial on the other hand is another e-commerce website which wants its users to
buy and share things in their cities. It had its headquarters in Washington D.C before Groupon
took over the company.
Groupon’s key characteristics
Its growth has been phenomenal to say the least but what makes Groupon different than
most other e commerce websites (Hughes & Beukes, 2012). The key characteristic of every
product in Groupon is that it is sold under a deal. These deals are used to actually try and get
these products and services to customers at cheaper rates than the market. These products are by
no means meant for stock clearance or old ones. The company provides coupons for Restaurant,
Beauty and Wellness, Travel, Activities, Shopping, Services and Tickets.
These product pricing keeps market inflation in control as others try and keep the prices
around the same so that it can get competitive.

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ESTABLISH AND ADJUST THE MARKETING MIX
The policy for Groupon has always been penetrative pricing. It always looks to attract
more customers through the best prices in the business. For example if a burger joint has
Groupons then one might just have to pay for one and half ham burgers to get two. This is called
aggressive pricing which is difficult to beat anywhere around the world ("Forbes Welcome",
2017).
The Pricing Policy
The pricing attracts a lot of customers as the general trend for buyers are to want things
cheap. In turn it has attracted a lot of customers who never thought of patronizing the business.
The product pricing which is always on the lower side has lead to an increase in demand. The
Law of Demand too states the same that if the price is high demands for goods will be less.
Groupon therefore with their penetrative pricing has attracted a lot of customers who might
otherwise be disinterested in buying the product.
Groupon’s different ways of promotion
Groupon has been a success because of the way it has promoted itself. It has never
emphasized on individual deals and have always focused on group discounts so as to enlarge its
customer base . The company also sends daily emails to its customers making them aware of the
deals. One of the most popular Groupon promotion is that if one refers a friend to the company
10 dollars is added to his Groupon wallet. They also believe in an option of ‘Buy for a Friend’ in
which they allow subscribers to purchase things for a friend. If the friend is not part of Groupon
he is sent free deals.

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ESTABLISH AND ADJUST THE MARKETING MIX
Groupon’s marketing strategy
Groupon is quite brilliant with its marketing strategy too. They are helping small shops
and businesses to connect with a lot of customers and in turn help them in earning more profit
("Should Groupon be Part of your Marketing Mix?", 2017). The company does so by using
tactics like promting their products on Groupon’s mobile app, website, everyday emails, search
engine optimization (SEO) and marketing (SEM), specialized merchandise collections,
advertising on billboards and social media.
I would use Groupon at work
I would definitely want to use Groupon at work as you can share a deal with your
colleagues and get heavy discounts (Edelman, Jaffe & Kominers, 2016). Who wants to pay more
if you are getting something for a lesser price. Groupon is great in identifying customer
preferences, needs and priorities. It will never give out deals to customers which would not be of
much interest to him or her. Also it can be easily monitored through the customers profile in the
application or the website. It is quite apt for budgetary requirements.
Conclusion
Groupon’s journey has been one of the most sensational in the corporate world. Their
strategies and promotions have changed the mindset of buyers. These innovations have already
given them a lot of mileage and are sure to escalate in the coming years.

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References
Edelman, B., Jaffe, S., & Kominers, S. D. (2016). To groupon or not to groupon: The
profitability of deep discounts. Marketing Letters, 27(1), 39-53.
Forbes Welcome. (2017). Forbes.com. Retrieved 6 September 2017, from
https://www.forbes.com/forbes/2010/0830/entrepreneurs-groupon-facebook-twitter-next-web-
phenom.html
Hughes, S., & Beukes, C. (2012). Growth and implications of social e-commerce and group
buying daily deal sites: The case of Groupon and LivingSocial. The International Business &
Economics Research Journal (Online), 11(8), 921.
Should Groupon be Part of your Marketing Mix?. (2017). Fcomms.me. Retrieved 6 September
2017, from http://fcomms.me/blog/87-should-groupon-be-part-of-your-marketing-mix