Marketing Mix Of Groupon and 7Ps (Updated 2024)

The Marketing mix of Groupon analyses the 7Ps of Groupon, which includes the Product, Price, Place, Promotion, people, physical evidence, and process of Groupon. Groupon is a public company of American origins. It is a marketing and distribution platform associated with the Internet industry. The company was formed in November 2008 by its co-founders Brad Keywell, Eric Lefkofsky, and Andrew Mason. Groupon seems like a boon to internet users who love discounts and shopping because the company offers discounted coupons for several services and products. Some of its competitors are as follows-

• RetailMeNot, Inc
• DealsOfAmerica.com
• PennyGrab, Inc

About Groupon

• Type: Online marketplace.
• Industry: E-commerce.
• Founded: 2008.
• Founders: Andrew Mason, Eric Lefkofsky, and Brad Keywell.
• Headquarters: Chicago, Illinois, United States.
• Area served: 13 countries.
• Current CEO: Dusan Senkypl.
• Number of employees: 1,000.
• Major products: Discounts on goods and services from local businesses.

Groupon Product Strategy

Groupon’s customers are related to e-commerce and is a connecting medium between local merchants, coupons, and subscribers. The company offers millions of users online deals through coupons for services, goods, travel, and activities. Groupon’s mobile app is available via Windows Phone, Blackberry, Android, and iOS.

The new Product Mix of Groupon in 2024 is as follows (Source).

1. Local Deals: Offers services and experiences in a consumer’s local area, such as restaurants, spas, fitness classes, and local events. This category aims to connect users with local businesses.
2. Groupon Goods: Products ranging from electronics and home and garden items to apparel and beauty products. This segment allows consumers to find deals on physical goods.
3. Travel Deals: Vacation packages, hotel stays, and all-inclusive travel deals. Groupon partners with travel companies to offer discounted travel opportunities.
4. Groupon Getaways: Specializes in travel deals, including accommodations, tours, and airfare packages at discounted rates, encouraging travel and exploration.
5. Health and Fitness: Deals related to health, wellness, and fitness services such as gym memberships, dental services, and medical treatments.
6. Beauty and Spa: Offers on beauty services and spa treatments, including haircuts, manicures, massages, and facial treatments.
7. Events and Activities: Discounts on tickets for events, activities, and attractions, such as concerts, theatre shows, sports events, and amusement parks.
8. Online Learning: Deals on online courses and learning opportunities, covering various topics from language classes to professional certification courses.

Groupon Place Strategy

Groupon is an international marketplace in the online shopping industry that has spread its distribution network to several parts of the world. The brand offers services and products to nearly twenty-eight countries worldwide and has its headquarters in Chicago. Groupon started its operations in Chicago, followed by Boston, Toronto, and New York.

By the end of October 2010, it was available in nearly 150 cities in North America, Europe, South America, and Asia; its number count was 100 cities. In November 2013, its official website was redesigned, adding several features. For example, It has become an active marketplace, whereas the original was for daily deals.

By the end of the financial year 2014-15, it was active in 500 global cities in forty-eight countries with 425,000 active business deals and 48.1 million consumers. Geographic markets included Thailand, South Africa, Russia, China, Malaysia, Singapore, UAE, Argentina, South Korea, Chile, Italy, Mexico, Japan, Ireland, Spain, India, United Kingdom, France, Greece, Germany and Brazil.

Here’s the place strategy of Groupon.

1. Company-Operated Stores: Groupon operates stores directly managed by the company in all markets. This gives Groupon higher control over operations, store layout, and design, enhancing direct consumer interactions and allowing immediate feedback collection and behavior analysis.
2. Licensed Stores: The company also expands its reach through licensed stores, which enable consumers to access Groupon’s product offerings without requiring Groupon to invest heavily in unstable markets. Licensed stores facilitate rapid market expansion and penetration while aligning product sales with local cultural values.
3. E-Commerce Platforms: Groupon has developed a robust online presence, including a functional website for order placements and tracking, alongside leveraging social media platforms for sales. The company also collaborates with online retailers like Amazon and eBay, increasing consumer product accessibility.
4. Supermarkets and Hypermarkets: Groupon ensures that its target audience has easy access to its offerings by placing products in supermarkets and hypermarkets. This strategy improves cost efficiency and places Groupon’s products where a large segment of its customer base shops.
5. Partner Agents: Groupon employs partner agents in offshore locations for product placement, ensuring quality control and practical negotiation terms. This strategy aids in maintaining a strong brand presence and quality assurance in international markets.

Groupon Pricing Strategy

By the end of 2014, Groupon registered an estimated revenue of 3.2 billion US dollars. Price is an evaluative criterion; users decide on purchases after viewing the offers. Signing up for a Groupon coupon is necessary and free, but the purchase price depends on the product. A typical Groupon discount includes 50%- 90% off. The company has adopted a reasonable pricing policy for its merchants and an economic policy for its users as it wants to make its services and products available at low cost. It faces stiff competition from rivals and has adopted competitive and penetration policies to succeed in online markets.

Groupon’s pricing strategy is multifaceted to maximize market penetration, customer acquisition, and revenue growth. This strategy leverages a mix of pricing models tailored to the diverse needs and preferences of Groupon’s division, its consumer base, its competitors, and the varying dynamics of the markets it serves. Here’s a closer look at the critical components of Groupon’s pricing strategy from a marketing expert perspective.

1. Dynamic Pricing: Groupon employs dynamic pricing to adjust the cost of deals and offers based on demand, time, and inventory levels. This flexibility allows Groupon to optimize prices for consumers and merchants, ensuring attractive deals for users while maintaining profitability.
2. Geographical Pricing: Recognizing the diversity in economic conditions across different regions, Groupon implements geographical pricing. This strategy allows the company to adjust prices according to the local economic environment, purchasing power, and competitive landscape, enhancing market penetration in various regions.
3. Promotional Pricing: Groupon frequently utilizes promotional pricing strategies, including limited-time offers and discounts, to drive urgency and increase purchase rates. These promotions are strategically timed to coincide with seasonal demand spikes, holidays, and other occasions, boosting sales and user engagement.
4. Value-Based Pricing: Central to Groupon’s approach is value-based pricing, where the price of deals is set based on the perceived value to the consumer rather than solely on the cost of service or product. This method ensures customers receive more value than the price, increasing satisfaction and loyalty.
5. Bundle Pricing: Groupon also adopts a bundle pricing strategy, offering customers packages of related products or services at a discount compared to purchasing each item individually. This encourages higher spending and introduces customers to a broader range of offerings, potentially increasing the trial rate of new services or products.

Groupon Promotion Strategy

Groupon relies heavily on social media for its promotional campaigns. It has roped in various platforms like Twitter and Facebook to act as its advertising agents and display multiple offers, promotions, and discounts to users. Online blogs have been a hit for Groupon as they have helped increase brand visibility and created positive awareness about its products and services. The company has placed several banner ads on different websites to inform users about the Groupon deal rewards and incentives.

Some Recent Video ads and Print ads for Groupon are:

Groupon People Strategy

In Groupon’s service marketing message mix, the “People” aspect is pivotal for delivering exceptional service and fostering strong customer relationships. Here’s an example of how Groupon marketing also emphasizes the role of its people in its service marketing strategy.

1. Employee Training and Development: Groupon invests significantly in the training and development of its employees. This encompasses not only job-specific skills but also customer service and management training. The aim is to ensure that all employees are well-equipped to handle customer needs effectively, support merchant partners, and contribute to the business’s overall success.
2. Organizational Culture and Employee Engagement: Groupon has cultivated a vibrant culture encouraging innovation, teamwork, and customer-centricity. By engaging employees through a dynamic work environment, recognition programs, and growth opportunities, Groupon enhances employee satisfaction and motivation, reflected in the quality of service provided to customers and partners.
3. Customer Service Excellence: The people at Groupon, from customer service representatives to account managers, play a crucial role in delivering outstanding service. They are the front line in addressing customer inquiries, resolving issues, and ensuring a positive experience with Groupon’s platform. The emphasis on prompt, empathetic, and effective customer service underlines Groupon’s commitment to customer satisfaction.
4. Employee Empowerment: Groupon empowers its employees with the authority and resources needed to make decisions that benefit customers. This empowerment enables staff to address issues swiftly and efficiently, enhancing the customer experience and building trust in the Groupon brand.
5. Focus on People Development: Recognizing the importance of people in building strong customer relationships, Groupon focuses on people development. This includes professional growth and fostering a sense of organizational ownership among employees. Groupon ensures its workforce is motivated, committed, and aligned with its goals by involving employees in decision-making processes and considering their feedback in organizational strategies.

Groupon Process Strategy

In the Groupon service marketing mix, the “Process” element refers to the systems and procedures that the company employs to deliver its services efficiently and effectively to both customers and merchants. Here’s a breakdown of the critical aspects of Groupon’s process strategy:

1. Streamlined Online Platform: Groupon’s online platform is designed for ease of use, allowing customers to browse, purchase, and redeem deals with minimal hassle. The website and mobile app feature user-friendly interfaces, secure payment gateways, and clear instructions for redeeming offers, making the process straightforward for users.
2. Customer Onboarding and Support: Groupon has established a comprehensive onboarding process for new users and merchants. This includes detailed guides, FAQs, and customer support services designed to assist users in navigating the platform, understanding how to redeem deals, and addressing any issues they may encounter. Customer support is accessible through various channels, including email, phone, and live chat, ensuring that help is readily available.
3. Merchant Integration: For businesses offering deals on Groupon, the company provides a robust set of tools and services for managing offers, tracking redemptions, and analyzing performance. This includes a merchant center dashboard where businesses can update their deals, view customer feedback, and access analytics. Groupon offers support and advice on structuring deals to attract customers and maximize benefits.
4. Quality Control and Feedback Mechanisms: Groupon highly emphasizes the quality of offers on its platform. It implements quality control processes to vet merchants and deals, ensuring customers can access high-value offers. Additionally, Groupon collects customer feedback and ratings for deals, which helps maintain high standards and promptly address any concerns.
5. Operational Efficiency: Groupon employs sophisticated operational processes to ensure the platform runs smoothly. This includes inventory management, deal curation, and a dynamic pricing strategy that adjusts offers based on demand and other factors. The company uses data analytics to monitor performance and adapt its processes, aiming to enhance the customer experience and operational effectiveness.

Groupon Physical Evidence Strategy

In the service marketing mix of brands such as Groupon, “Physical Evidence” refers to the tangible aspects that customers interact with, which help to form their perceptions of the service quality and overall brand. For brands with a primarily digital platform like Groupon, physical evidence extends beyond traditional brick-and-mortar manifestations to include several key elements.

1. Website and Mobile App Interface: The design and functionality of Groupon’s website and mobile app serve as critical physical evidence. Their ease of navigation, visual appeal, and the seamless experience of browsing deals, making purchases, and accessing vouchers directly influence customer perceptions of Groupon’s reliability and quality.
2. Vouchers and Confirmation Emails: Customers receive vouchers and confirmation emails upon purchasing a deal. These documents are crucial physical evidence, as they not only provide the details and terms of the offer but also reassure customers of the purchase’s validity and the company’s professionalism.
3. Brand Imagery and Design Elements: Groupon’s logo, color scheme, and overall design aesthetics across its digital platforms and marketing materials create a visual identity that customers recognize and associate with value and trustworthiness. This consistent imagery helps to reinforce the brand’s presence in the digital marketplace.
4. Customer Reviews and Testimonials: The display of customer reviews and ratings for deals and merchants on Groupon’s platform is evidence of service quality and customer satisfaction. New users often rely on these testimonials to gauge the value and reliability of offers before making a purchase.
5. Merchant Physical Presence: Although Groupon operates online, the physical locations of its merchant partners where customers redeem their vouchers contribute to Groupon’s physical evidence. The service quality and the venue’s condition directly impact the customer’s experience and perception of Groupon.

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