Case Study: Groupon

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Now we are talking about the significance of “word of mouth” in Groupon’s promotional marketing mix. According to the video, we know word-of-mouth plays a backbone function in the success of Groupon. Because consumers often share information about a particular purchases with their acquaintances via verbal and electronic way, and the point is this promotion is free for the company even the way is hard controlled. In addition, every deal on Groupon website is short period so word-of-mouth has a significant influence on every transaction so as to spread the coupon news to your friends. So “word of mouth” also drives Groupon grow fast.

In my consideration, I believe Groupon will be still successful in 2012 and 2013, but Groupon growth will be decelerated in the coming years. Even my friend still like to shop on Groupon, which reason is student prefer to save their money as more as possible. However, I still think Groupon promotion is not appropriate for every-age people due to the low-class quality of product and service. Otherwise, “For one thing, the days of spectacular growth rates are over. Groupon’s revenue growth is impressive on an annual basis, but look at it quarter by quarter and you can see it slowing dramatically. A year ago, Groupon’s revenue was doubling sequentially every quarter. But beginning of 2011 it began to slow dramatically: 72% growth rate in the first quarter of 2011, then 33% in the second quarter, and only 10% in the third quarter.” Kevin Kelleher said. He is the journalist of Reuters and the news is in November 7, 2011. The fact claims my prediction is true because I consider Group just focus on their promotional business and don’t have enough profitable business to support their company sustainable development leads to decelerate their growth. Their product is too single to limit their forward pace. So they need to widen their product-line breadth or different business.

As my suggestion, Groupon has to exploit a new business so as to find a new growth point. My idea is product an electronic “Groupon-Pad”, which is a useful device for people to get a coupon and any information of a product, likes Kindle of Amazon providing e-book to people reading. A tangible product is more absorbing to draw people’s attention. Consequently, I suppose a creative product can keep them go ahead and probably save Groupon’s life.

Bibliography:

Kelleher, Kevin. "The Dreary Details of Groupon’s Future." Reuters. Thomson Reuters, 07 Nov. 2011. Web. 30 Oct. 2012. http://blogs.reuters.com/mediafile/2011/11/07/the-dreary-details-of-groupons-future/>.

Groupon. Prod. Pure Imagination. Perf. Groupon's Staff. Northeastern University Online. Northeastern University, 30 Oct. 2012. Web. 24 Oct. 2012. >.