The Group Coupon Promotion

Groupon: The New Way to Save (ABC News)

Coupon PromotionsHere is an interesting spin on the coupon sales promotion.  The business model for the website discussed in this video story follows a well established promotional model – offer discounts for bulk purchasing.  In this case discounts are offered when a certain number of customers agree to make a purchase.  For instance, customers within a local area can receive a 30% discount off pizza at a local pizza shop if at least 100 customers agree to make the purchase within a designated time period.

This type of promotional approach is worth watching.  It is quite conceivable that such a promotion will attract the attention of websites that are much larger than Groupon.com.  And, while Groupon and its promotions appear to cater mostly to services, larger websites, such as Amazon and Wal-Mart, could employ this promotional tactic to push tangible products.

Its like a group coupon, if I want it myself that is not enough I have to hope that five of my friends and five of their friends and so on and so on all sign up.  Once we meet the minimum then the deal is on.

Will this promotional method work if the discounts offered are not extremely high?  That is, is there a minimum discount that will need to be offered for a large number of consumers to commit in advance to make a purchase?

Image by The Lightworks

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