Essay on Group on

1975 Words Apr 22nd, 2012 8 Pages
JUNE 17, 2011
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Groupon
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and the Collective Buying Phenomenon
Jeanne Wallace

What’s the big deal? Never knew that question could amount to so much. Now, everyday when I log into my email I’m face-to-face with a marketing concept that answers the question for me: Groupon.com. The site offers daily deals of “the best stuff to do, see, eat, and buy” in my city. Each deal is designed in a tempting, humorous, and creative way. Sometimes, I bite at first site. Average savings per deal equals 60%! Often the deal is something I’ve thought about | | trying and never seized the chance. Timing, | Groupon Deal: For $12, you get $24
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Figure 1. Richard Sitler posted this request on ThePoint to join him in raising $10,000 to fund his photographic documentary of Peace Corps volunteers in the field to “…show the world why the Peace Corps exists and how it is working to change the world.” |
While taking an architectural boat tour in Chicago, Andrew realized that after living in Chicago for ten years, there was much of the city he had never experienced. A lightbulb went off. What about making a list of the best things to do in the city, figure out how to make it affordable to do these things, and experience the city with others. He thought about lessons learned and mistakes made in the collective buying model employed by MobShop and asked the question, “How can we (ThePoint) use it to solve a real problem?” The answer came to him and the concept of Groupon was conceived in September of 2008.

The birth of Groupon.com
Armed with his new focus, Andrew caught the attention of an investor by the name of Eric Lefkofsky who saw the commercial potential of ThePoint.com. Mr. Lefkofsky wanted to know how to use the site to make money. Through advertising? Fundraising? Collective buying? The last choice struck a chord and Mr. Lefkofsky backed Andrew with a $1 million investment.
Groupon was embedded into the ThePoint.com website. In October 2008, an email was sent to a list of 400 people offering two pizzas for the price of one at a Chicago restaurant located in the same building as the

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