http://www.rohitbhargava.com/2011/12/4-easy-ways-to-lose-money-partnering-with-groupon.html

I decided to write something about this article right on the first sight that I saw the title. I could not understand why companies would suffer a loss when more and more people buy things on Groupon. It was my opinion that companies might sell more products with online discounts, so they should make profits. However, after reading the article, I got a better understanding of marketing, that the target of marketing is not simply to boost sales in a single period.

First thing first, companies should clarify who their target customers are. Those people who bought their products once only for reason that they are on a discount will rarely buy the same products again at their regular price. The main purpose should be to attract more customers getting to know their brand instead of buying the product itself. Customers may become loyal only if they remember the brand.

Companies should sell those productions with a  large number of inventory with discount but never their core products. For me, as a customer, if I always see discount ads on the products I usually buy, I will feel that the product may not worth as much as its regular price. I will regret to buy the products with regular price and may decrease my brand loyalty. It is likely that a certain number of customers with brand loyalty turn to another brand instead.

All in all, the most important thing I have learned is that before making a marketing decision, analysis should be done as careful as possible. A small mistake may result in a big loss of the whole company.