GROUPON VIDEO CASE 1. What features of contemporary e-commerce does Groupon Now! utilize?

* Ubiquity: Groupon now offers local deals at any moment of the day. * Global Reach: Groupon features a daily deal on the best stuff to do, see, eat, and buy in 48 countries, and soon beyond (read: Space). We have about 10,000 employees working across our Chicago headquarters, a growing office in Palo Alto, CA, local markets throughout North America and regional offices in Europe, Latin America, Asia and around the world. * Interactivity: Since the payment information is saved with the Groupon account you can just tap on a deal to purchase it. The app will give you a scannable barcode that the shop offering the deal can read using the Groupon NOW app. * Personalization and customization: Groupon personalizes “deals” for users who supply some information about themselves, such as their zip code, gender and age, and it will make sure you see the deals most relevant to you. * Information density: Groupon now share with the user many promotions according to the place, so the user can compare options and select the one he likes more. * Richness: If the user finds a deal he or she likes, that person “buys” the deal online via Groupon. The user can print the voucher or bring it up to display on a mobile device.

2. What value does this service provide subscribing merchants? What value does it provide customers?
SUBSCRIBING MERCHANTS * A deal in Groupon becomes available only if a certain number of people sign up for a specific daily Groupon offer. If the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity. * Groupon Now! Gives business owners the ability to offer deals at specific times of the day. This will enable them to schedule deals to encourage visitors during normally slow business hours. * Merchants don`t have to make checks. * Groupon offers a Merchant Impact Report that is a free feature built into the Groupon Merchant Center that provides users with data that can be used to evaluate the effectiveness of Groupon promotions. * Groupon provides a motivated customer base to the seller, and the promise to achieve X number of sales per day. If Groupon doesn't meet that promised quota, there is no need for the merchant to provide any discount services, nor any commission pay to Groupon * With Groupon you can make direct sales to an audience that is looking for new purchase experiences. * Groupon makes money taking a percentage of every coupon sold, that means if the merchant win Groupon win too. * Groupon offer huge exposure, great customers and business overnight to the merchants. * If the customers give good comments about the merchant, the local receive an award.
CUSTOMERS
* Groupon e-mails its subscribers discounted offers for goods and services that are targeted by location and personal preferences. * If consumer likes the deal-of-the-day, then he can purchase an electronic coupon directly from Groupon using a credit card or PayPal account, print that coupon, take it to the restaurant or store, and redeem it for commonly double the value you paid. * Groupon has certainly achieved a level of trust among consumers, and for good reason. The site claims to have “hundreds of experts” in its employ who “painstakingly research” the businesses with which it partners. * There is a Groupon Promise. If customer use a Groupon voucher before its promotional value expires, take a Getaways trip, or attend a Groupon live event and are disappointed by the experience, Groupon will work with the customer to make it right or give a refund. * Groupon select the business that will take part of the company in order to offer a quality service. * The customer can share comments about the experience within the merchant’s establishment in order to improve the service. * If the customer becomes a regular visitor, the merchant could award the client with free money to spend in Groupon.

3. What kinds of businesses are most likely to benefit from using Groupon?

Groupon is most likely benefit small businesses because Groupon helps them to attract new customers, it is also helpful in order to help merchants to increase sales and it is a great way of advertising.
Benefit to retailers and small businesses: * Discount vouchers provide price discrimination, letting merchants attract consumers who would not ordinarily patronize their business without a major price incentive. * These vouchers also benefit merchants through advertising, simply by informing consumers of a merchant's existence via e-mail. * For some merchants, the benefits of offering discount vouchers are sharply reduced if individual customers buy multiple vouchers. * As a marketing tool, discount coupons are likely to be most effective for businesses that are relatively unknown and have low marginal costs.

4. Visit Groupon’s Web site and enter your zip code. What kinds of deals are displayed? Would you use Groupon? Why or why not?

We didn’t find Groupon service in our country. The most similar service that we could find is Cuponazo, but it works differently. So we chose as example Colombia.

In this page we can find discounts range from 10% to 96%. The offers range from health and beauty services. This is visually appealing to the customer. The products and services are classified which facilitates navigation and search; however this is very general classification.

Yes, we would use the service, because Groupon Now! deals are great time-limited offers from local businesses. These deals must be redeemed between the hours specified on the deal page and voucher, and usually on the same day of purchase. Most deals are available in limited quantities and only for a short period of time. Also for the purchase of products as services in the country is still developing. This reduces costs which is a very significant factor for the consumer.

5. Are there any disadvantages to both customers and merchants in using Groupon Now? * Deals attract low-end bargain seekers. Because the Groupon customer base is made up of deal-seekers and bargain shoppers they might not be willing to purchase beyond the value of the coupon. So, there are low rates of spending and low rates of return. One problem with price deals is diminishing returns; thus, merchants need to put a cap on the number of deal coupons that are to be sold. * Deals hurt the brand. The obsession with price doesn't necessarily make for a lot of brand loyalty or even brand awareness. One negative aspect of daily deal sites is that price promotions usually hurt the brand of the company offering it. It makes customers price sensitive. When they get something at a much lower price, they then become less inclined to pay full price for that same product or service in the future. * Deals don't generate repeat customers. Groupon has a low conversion rate for repeat customers, according to marketing experts. You may never see the person again once they use your coupon. Or that person may not be willing to buy from you again without a coupon in hand. The percent of new customers that redeem the voucher that becomes repeat visitors of the business is estimated at around 19 percent. It varies by product categories.

* Deals are not profitable. Another problem is the split. Groupon keeps 50 percent of the revenues from each coupon deal. Merchants need to gross margins well in excess of 50 percent for Groupon to work for them. The promotion is very steep, usually 50 percent or more. Most businesses are built on margins of 75 percent, which means if the customer just comes in and buys the deal; the owner is going to loose money.
Restaurants usually have higher margins. "By offering huge discounts and giving 50 percent to Groupon, they just aren't earning enough to cover the cost of serving that customer." * There are better deals out there. Daily deals sites are not the only game in town. You can run a similar promotion for less money. There are plenty of marketing programs you can use; does it make sense to use this one.
For example, you can offer a discount or promotion on a Facebook fan page. It's an effective way to engage new and existing customers at a very low cost, he adds.