The success of Groupon lies on the fundamental aspect of offering discount to consumers. They negotiate better deals with business houses that offer discounts and pass it on to consumers in the form of coupons which turns out to be a win-win situation for both business owners and consumers.
Ever since Groupon made it big on the online space, there are many daily deal websites competing for a sizable market share. More and more players are joining in the online group-buying market. Though sites like Living Social, and Restaurant.com have also made it big, but still Groupon rules the roast.
What makes the phenomenon of Groupon so successful? Although there are many players competing aggressively in the space and more are coming in and offering deals, Groupon has emerged as the leader. Because Groupon’s strategy to offer the only the very best deals to its users.
Unique business model combined with excellent pricing mechanism, wider reach and exciting offers makes Groupon, the undisputed market leader in the group buying sphere. Besides, Groupon’s incredible ability to coordinate effectively covering a wide range of geographically localized goods and services across a wide spectrum of industries has resulted in creating a niche for Groupon and clearly sets it apart from the ever increasing competitors.
Groupon is always open to reach out to businesses and services that have the potential to attract the subscribers. Over the years Groupon has expanded and extended its group buying phenomenon across thousands of merchants tapping even the smaller ones. Groupon has never hesitated in extending an invitation to those existing merchants who are keen to venture in to online group-buying service or the new breed entrepreneurs who are bitten by the bug of group-buying business or even the established business houses diversifying in to group buying activities.
Groupon’s five pronged strategies that helped it to achieve a formidable position of strength:
Groupon’s strength lies in its strategy based on powerful analysis on various goods and services that would be engaging and appealing to the subscribers. Once identified the right goods and services then the company dons the role of powerful intermediary in the group-buying activities by coordinating effectively the whole process including initiating, negotiating, arranging, and execution.
Groupon’s adopts a different pricing strategy for the deals. As mentioned in its website, “We only win if you win”, Groupon makes it clear that the focus is making the subscriber happy. Based on this policy, Groupon has a fixed price for all the deals it offers on its website. The pricing is not limited to any time frame but it is valid till a fixed minimum number of subscribers accept the deal. The subscribers can enjoy the deal at the discounted price, only after the fixed minimum number of subscriber is reached for the particular deal.
Another business strategy adopted by Groupon is that the company never charged the business houses for advertising their goods and services but instead demanded a fixed percentage of the revenues generated by each deals sold by the business houses as its profits.
Groupon offers a wide range of products than most of its competitors. The products are categorized into customer packaged products under several headings for ease of subscribers. Groupon does undertake lot of research and carefully examines the preference of the people catering to the local market. Based on the geography of its operations, Groupon cleverly decides on the deals with specific product for those shoppers in that local area.
Groupon’s provides lots of information about the products on its auction page and also highlights each featured auction to show its specific advantages. Further, it provides links of the featured companies (if any) and maps their exact locations. By providing a special link called “Join the Discussion”, Groupon encourages the subscribers to share their opinions and comments about the products.
Apart from the traditional email distribution activities, as a measure of widening its reach to attract new consumers, Groupon has extended its links to social network sites such as Facebook, Twitter and FeedBurner so that the subscribers can share Groupon with their friends and convince them to subscribe and share links to other groups. Besides Groupon suitably awards its subscribers through an initiative titled “Refer Friends, Get $10″. Groupon is continuously engaged in enhancing its personalization process to meet the ever raising user needs and striving hard to better them every time.