Groupon Case Study Summary

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Andrew Mason founded Groupon in 2006. Based on an idea popularized by Malcolm Gladwell, Mason thought that if consumers could come together as a group they would have more purchasing power to get better deals... Originally named ThePoint, Mason tried to get users to raise money for various causes. The Point could be used for anything “from boycotting a multinational company to getting 20% off a subscription to The Economist”(11-2). To reach its full potential ThePoint would need to be more focused. Mason found that ThePoint was at its best when customers were coming together around particular deals, so he started recruiting merchants to offer tipping point deals. In these deals the coupon only became valid if enough customers bought the coupon, but when this happened “consumers saved money and merchants benefitted from both large-scale sales and market exposure”(11-2).
After being one of the fastest growing companies ever, Groupon has not been able to sustain that trajectory. “Groupon’s estimated worth was over US$1 billion after just 16 months in business, becoming the second fastest
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The ability to not only target individuals that are potentially interested in a merchant, but also ones that are at the merchant’s brick and mortar store is accomplished by Groupon Now a new product launched in the second quarter of 2011. Further development of these products will be a key resource in Groupon’s effort “to become the operating system of local commerce” (11-3). Groupon’s customers are largely millennial between the ages of 18-34. This demographic has grown up with the Internet and are very dependent on their cell phones and other portable technology. These customers don’t want to wait for things or search for deals they want them easily at there finger tips when they need

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