Video Case 1

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? 

Groupon is the fastest growing company of all time because its people have come up with a system for understanding the purchase decision process of the majority of consumers. They’ve incorporated strategies that enable them to adapt to consumers of local communities as well as around the world. The company takes advantage of four types of consumer behavior: routine response behavior, limited decision making behavior, extensive decision making behavior, and impulse buying behavior.

2. What is the Groupon Promise?

The Groupon Promises says that any customer can return a Groupon, no questions asked, if they’re not satisfied with their experience.

3. How does the Groupon Promise affect a consumer's perceived risk and cognitive dissonance?

The Groupon Promise reduces a consumer’s perceived risk because it gets rid of the consumer’s uncertainty of a negative outcome, such as wasting money. Their promise also affects cognitive dissonance because it reduces a consumer’s post purchase tension by including the phrase “no questions asked” in regards to making returns.

4. How does the Groupon impact the consumer decision making process? Be sure to consider steps in the consumer decision making process.

A typical Groupon user follows a five-stage purchase decision process:

1. Problem recognition: perceiving a need (i.e. deal-of-the-day email offers)

2. Information search: seeking value (i.e. A Groupon offer can initiate an internal/external search.)

3. Evaluation of alternatives: assessing value (i.e. Groupon customers focus on price, quality, and time restrictions.)

4. Purchase decision: buying value (i.e. The purchase decision is made online.)

5. Postpurchase behavior: value in consumption or use (Once consumers purchase and use a Groupon offer, they compare their experience with their...