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The Groupon Firm’s Market Research and Segmentation Essay


Groupon is an Internet firm that provides marketing services in the form of direct mail and coupons. The company targets businesses that have coupon users, and has recently expanded to cater for merchants who offer coupons. The firm’s main clients are the customers who are moving from the traditional means of marketing, of using classified or the yellow pages, to a system that employs modern technology.

The firm’s business is to identify consumer needs, and then structure products that suit their needs. In addition, the company offers its marketing services to merchants and companies that wish to meet their customers’ needs. Through the use of promotions, the Internet firm has expanded its market size by identifying potential benefactors of their services.

Groupon’s Marketing Mix

Groupon’s managers achieve their specific target market by utilizes the marketing mix tool that combines the elements of product, place, price and, promotion.


Groupon sells wares on behalf of their clients through direct-to-consumer email marketing. They offer their service by utilising the power of group coupons. Initially, the firm encouraged its users to form groups that allowed them to negotiate with merchants. Groupon shifted its focus to providing merchants with a forum where they can place their deals and discount offers.

For a deal tips into action, a sufficient number of customers must sign up for a coupon,. Unlike most online consumer businesses, Groupon forgoes the option of offering their clients’ privacy in order to allow for more transparency. These offers are then availed to customers who have signed up for them via email.


Since Groupon is an Internet firm, the customers voluntarily and explicitly opt-in or sign up for deals offered by the various merchants. All clients have access to all the deals and discounts available, provided that they have an Internet connection. All they have to do is go online, access their email, and view the deals available. Groupon trains merchants on how to use email and coupon marketing to attract new customers. In addition, the firm attracts customers to sign up with them so as to have access to the deals being offered by the merchants.


When it comes to pricing of their services, Groupon fails to disclose its rates. However, gauging by the current number of subscribers who use their site, and the projected increase in users, it is acceptable to assume that they have set a fair price for their services. Moreover, their revenues amount to approximately half of the total transaction ($380 million) obtained from 50 million subscribers. Since a merchant or customer can access the site via the Internet, payments are made through online money transfers. Groupon offers refunds for wares not delivered or delivered in poor condition.


In an effort to retain, expand and maintain a competitive advantage in the market, Groupon has adopted several policies and practises. The firm has expanded its marketing models to merchants through training. The company identifies merchants who could benefit from their marketing services and trains them on how to use email and coupon marketing through their site.

Groupon not only offers its services to coupon users, but also for merchants and businesses that offer coupons and discounts (their primary target). Moreover, the company encourages their clients to use modern technology, such as the Internet, to reach their customers. In addition, the firm works towards increasing efficiency and transparency. They achieve transparency by making privacy mute through the volunteer sign up process offered to customers.

Benefit Reaped in Market Research Process from Employing Groupon

The market research process is a lengthy and involving set of activities that must be performed by any business. The process involves formulation and development of research objectives, techniques and procedures to be used in data collection, research procedures, sampling procedure, data analysis techniques, and the presentation of collected and analysed information to decision makers. Most of the merchants who request for Groupon’s services are believed to have identified a problem or problems in their marketing strategy that they wish to address. Groupon reduces the burden on the merchant by creating a forum where customers can access the various products or services they offer.

The firm utilises deals and coupons as a means of attracting customers to purchase the various wares. The use of deals serves the purpose of attracting customers and offering a competitive advantage over similar products or services already available in the market. All the customers with access to the Groupon site can view the deals of any company and, thus, all goods have an equal chance of been seen by the clients. Moreover, Groupon’s customer base is uniquely placed in the market and offers a fresh source of clients.

Since the company practises transparency and anyone can view deals available, competing merchants can view deals offered by their business rivals. This makes the data collection and analysis process shorter, easier and faster. In the case, that a merchant intends to introduce a new product into the market, Groupon offers a unique forum for the launch of such goods. The product enters the market at the best possible price, and its success or failure is gauged against similar goods. Due to the transparent nature of Groupon, data collection and sampling is made easier.

Groupon’s Utilization of Market Segmentation

Market segmentation refers to the division or subdivision of a market into sections where similar patterns or behaviours are classified together. Groupon has a market composed of online customers. The geographic restrictions that constrain most businesses do not apply to online customers; as such, it is very easy to attract new customers.

The Internet firm encourages both merchants and customers to embrace technological advances. Groupon has made it possible for its online customers to access their site from any device that can connect to the Internet. In addition, the signing up process is simple and requires little to no training. In cases where training is necessary, Groupon utilises its large number of employees to train such clients.

Another segment that Groupon focuses on is that of direct-to-customer email market. Groupon focuses on online customers who are attracted to deals and coupons. Due to the unique nature of their customers, the merchants selling their products on the forum sell goods at deals and discounts. Moreover, the company offers services to both customers and producers of products. The composition of the market makes it a unique meeting point for the two segments.


Merchants who are looking for new markets find them in Groupon; in the form of customers who are looking for discounted goods and services. The Internet firm offers merchants a chance to offer their products directly to consumers while the consumers get to choose which deal appeals most to them. Groupon is positioned strategically in the online marketing business by creating a unique market for merchants through the use of deals and discounts on goods and services to attract online customers.

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IvyPanda. (2020, July 1). The Groupon Firm's Market Research and Segmentation. Retrieved from https://ivypanda.com/essays/the-groupon-firms-market-research-and-segmentation/

Work Cited

"The Groupon Firm's Market Research and Segmentation." IvyPanda, 1 July 2020, ivypanda.com/essays/the-groupon-firms-market-research-and-segmentation/.

1. IvyPanda. "The Groupon Firm's Market Research and Segmentation." July 1, 2020. https://ivypanda.com/essays/the-groupon-firms-market-research-and-segmentation/.


IvyPanda. "The Groupon Firm's Market Research and Segmentation." July 1, 2020. https://ivypanda.com/essays/the-groupon-firms-market-research-and-segmentation/.


IvyPanda. 2020. "The Groupon Firm's Market Research and Segmentation." July 1, 2020. https://ivypanda.com/essays/the-groupon-firms-market-research-and-segmentation/.


IvyPanda. (2020) 'The Groupon Firm's Market Research and Segmentation'. 1 July.

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