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In order for a business to thrive, the marketer has to offer something of value to the consumer and the consumer must appreciate it enough to pay for it. Much of this appreciation comes from the strength of the brand name; in class, we learned of the importance of a value proposition in the development of a strong brand name. Companies need to segment, target, and then position the brand effectively in the perceptions held by consumers.

Groupon has not been profiting well lately, reporting a $102.7 million (USD) loss in Q2 of this year. This could be blamed on their lack of effort in establishing a coherent value proposition.

Although Groupon does offer great deals, it does not target a specific type of consumer. It offers bargains on random items that many quickly realize they do not need. As a Canadian Business article put it, “Groupon is a garage sale”—sure, they offer many things, but the offerings are unsystematic. As a result, the brand name is weak; people do not associate Groupon as a credible source in which the consumer will end up satisfied. In essence, as a result of a practically non-existent value proposition, Groupon has created for itself a weak name and a reputation for offering mainly useless deals that are inapplicable to many consumers’ busy lives.

Works Cited:

Philip, Bruce. “Because cheap is not enough | CanadianBusiness.com.”CanadianBusiness.com. N.p., 22 Sept. 2011. Web. 4 Oct. 2011. <http://www.canadianbusiness.com/article/46332–because-cheap-is-not-enough>.

Lim, Josephime. “Groupon IPO could be trouble | CanadianBusiness.com.”CanadianBusiness.com. N.p., 1 Sept. 2011. Web. 4 Oct. 2011. <http://www.canadianbusiness.com/blog/business_briefings/42759–bad-press-swirls-around-groupon-s-ipo>.