[How effective are Groupon promotions for local businesses and what variables influence their effectiveness?]

By

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University

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EXECUTIVE SUMMARY

In this study we try to explore the concept of Groupon promotion and its impact on local business in a holistic context. The main focus of the research is on Groupon promotion and its relation with local business. The researcher used secondary and mixed sources for data analysis. The research questions addressed in this paper areHow effective are the Groupon promotions for local business? What variables affect their effectiveness? What are the ways through which the business can gain most from their Groupon promotions based on service sectors which Groupon is operating in? Many respondents who participated in the research were not satisfied with the extreme sensitivity of prices and transactional orientation of consumers. We have also found that the primary driver of the profitability for the promotion is the employee satisfaction rather than the features of the promotions. Based on these findings we have provided suggestions to modify social promotion offers and to provide with better balance and consumer appeal.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

EXECUTIVE SUMMARYIV

CHAPTER 1: INTRODUCTION1

Background1

Problem statement3

Research Aims and Objectives4

Research Questions4

Rationale4

Significance of the study5

CHAPTER 2: LITERATURE REVIEW6

Factors for business success6

Management Factor6

Entrepreneur Factors7

Product Service Factor8

Marketing Factor9

Promotion Strategy10

Viral marketing10

Parainnage10

Group dynamic purchase10

Social networking11

Evolution of traffic and Comscore Groupon USA11

Business discounts and sales promotions of Groupon11

Leading innovative companies12

Marketing Strategy12

Groupon's global position and expansion strategies13

CHAPTER 3: RESEARCH METHODOLOGY21

Mixed Research21

Classification of research methods21

Multi-method studies22

Mixed method studies22

Steps in mixed methodology22

Strength and weakness of the mixed research:23

Strengths23

Weaknesses24

Research Design24

Data Collection and Processing Procedures25

Merchant Interview Questions (see appendices)25

Groupon Customer survey (see appendices)25

CHAPTER 4:THE CASE STUDIES26

Case studies from Groupon website26

The commercial results of the interviews31

Case available online32

Case available on the internet32

CHAPTER 5: DATA ANALYSIS AND RESULTS33

Groupon E-Commerce Success: Description of the Key Factors33

Functional Factors33

Groupon Application Integration34

Strategic Factors35

Alignment of Business and E-Commerce Strategy35

Alignment of Business and IT Strategy36

Technical Factors37

Information Technology Infrastructure37

External Factors39

Groupon Partner Relationships39

Interorganization Collaboration40

Pricing Strategy42

Product Offering42

Competitors42

Use of Social Sites for Promotions43

Profitability of Groupon promotions44

General Pros and Cons of Groupon Promotions44

General variables influencing the effectiveness of the promotions45

CHAPTER 5: DISCUSSION AND CONCLUSION47

Limitations of the study48

Further Research49

New developments in online promotion- Groupon50

REFERENCES51

APPENDIX62

Merchant Interview Questions62

Groupon Customer survey62

CHAPTER 1: INTRODUCTION

Background

The coupon system was initiated by Asa chandler who was one of the masterminds of marketing field in year 1887.However it was named as coupon by the co owner of the coca cola after considering the meaning of the French word couper which means to cut. Chandler shaped the crystal ball and the crystal ball became a visionary as since last century the concept of saving has gained popularity in the customers ...