Groupon Essay

624 Words3 Pages
Groupon Case Study 1. How has an understanding of consumer behavior helped Groupon grow from 400 subscribers in Chicago in 2008 to 60 million subscribers in 40 countries today? Answer: By developing the concept of making offers that are only carried out if enough people commit to participate in them. Goupon figured out that people were looking for simplicity in purchasing deals. They determined what people wanted and that they would purchase. They brought these deals to people’s hometowns and made it easy to try new things at a discounted price. Their concept was genius the model was a win for everyone. Consumers received discounts, merchants obtained new customers. Groupon found a great way to engage with customers. 2. What is the Groupon promise? How does the Groupon promise affect a consumer’s perceived risk and cognitive dissonance? Answer: The Groupon Promise is that any customer can return a Groupon, no questions asked, if they feel like Groupon has let them down. The Groupon promise affects a consumer’s perceived risk and cognitive dissonance by allowing the customer to feel as if there is no risk when purchasing a Groupon. The customer is even able to return the Groupon if they have already used it and were not satisfied. This allows a subscriber to purchase the Groupons without the worry of wasting money. 3. Describe the five stage purchase decision process for a typical Groupon user. Answer: The five stages are problem recognition, information search, alternative evaluation, purchase decision, and evaluation. Problem recognition is created by triggers that present consumers with an opportunity to do something that they wouldn’t normally do. Information search may occur due to a previous experience with the merchant making an offer or a conversation with family and friends regarding a product or service. The alternative evaluation

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