Groupon: Helping Consumers with Purchase Decisions

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Cluster 2 Case Study Groupon: Helping Consumers with Purchase Decisions Textbook Questions 1. Having an understanding of consumer behavior has helped Groupon grow from 400 subscribers in Chicago in 2008, to 60 million subscribers in 40 countries today by Andrew Mason’s want to try new things and go to new places. He found himself wanting to venture out of his normal activities. He started a website based on the idea that he could help people like him try new places by offering coupons to large groups of people. He thought that people would be more inclined to “try something new if the price was low enough, and that businesses would offer low prices if they knew they could sell a large quantity.” He came up with the concept that offers are only carried out if there were enough people to commit to participate in them. The company and concept of Groupon spread so quickly because of the power of the internet, being able to reach millions of people across the world and giving people the opportunity to get a good “deal” on something. 2. The Groupon Promise is “any customer can return a Groupon, no questions asked—even if they have used it—if they feel like Groupon has let them down.” The Groupon Promise affects a consumer’s perceived risk by making the consumer feel less committed. They know that if something comes up and can’t participate in the Groupon that they aren’t obligated to show up or use it. They can get a refund. A person might experience cognitive dissonance because for example they wanted to participate in an art class and purchased a Groupon but then later saw a similar Groupon and liked that one more. You again don’t have to feel obligated to do the one you already purchased; you can simply just return or cancel your Groupon without any hassle. 3. The five-stage purchase decision processes for a typical Groupon user are: problem

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