The Groupon Model

-Case background

When the Groupon model was invented, the general "norm" of group-buying websites can be portrayed as: each group-buy site offers a city specific online deal on a daily basis. However, all group-buy sites "deviated" from this norm over time and produced numerous variants. For instance, more than one deal can be offered everyday. Besides, deals are not necessarily updated on a daily basis. Other "nonconformity" cases are new business models derived from the "norm," such as (1) group-buy aggregators (e.g., Tuan8001) that offer an online portal to group buying sites and provide search feature for consumers to look for ideal group-buy deals, (2) the "Groupon Now"2 model, and (3) the shop-with-friends App Pinduoduo.

The major goal in designing this home assignment is to facilitate your understanding of competition in a marketing perspective, i.e., competition defined by value creation and value perception. Competitive advantage of a product or brand is realized by occupying a superior position in the mind and heart of its customers. In other words, the target market has perceived superior value. Such exterior value perception originates from the systematic value creation activities interwoven in the value chain inside the firm.

-Question

For "Groupon Now", what is its updated value proposition?

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It has a compelling value proposition focused on attracting new consumers to local retailers. Instead, local shoppers benefit from savings and discounts that they would not otherwise get. The value proposition of Groupon Now to its customers is to have affordable prices on products that the consumer needs, as well as convenience and accessibility. To ensure that the right customers get the right deal, the deals are localized. For companies, Groupon Now provides a way to communicate with the right customers, as well as a forum for advertising and generating new customers. Deals with a time limit ensure that consumers buy right away rather than thinking about it. The tipping point enables a company to receive enough offers for a deal to be feasible for them to sell.

Compared to previous products, the Groupon Now will play a more important role in people's daily lives. Groupon fine tunes product offerings and sells them to the right consumers at the right place and time. And instead of receiving the Groupon Now via email, users can see the transaction only when they input and open the location in the smartphone app. An important change is real time and local services. This change will help Groupon penetrate into users' daily lives. For customers, Groupon Now offers discounts or services to meet immediate needs and for buyers, Groupon Now will increase immediate buyer traffic.

Groupon is an app that focuses on utilizing relationship with the merchants in generating revenue that will also benefit the customers by providing discounts on selected items. Groupon's updated value proposition is how it will help the local merchants to introduce their business and attract potential clients. It is how they will increase the awareness of the businesses.

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