Groupon or Google offers?

What is Groupon?

Groupon is an online-based company that offers special deals on the best stuff to do, eat, see and buy. Groupon works with local businesses to create discounts that are offered to consumers. They call it "collective buying power!"

Each day Groupon offers one special deal available for purchase in 24 hours. The Groupon purchase does not get confirmed until the minimum number of buyers has purchased the deal. If, at the end of 24 hours, the minimum number is not met, your credit card is not charged. The theory here is the collective power of multiple buyers helps drive down the cost, yet ensuring the business doesn't loose too much money by offering such big discounts.

Groupon’s BIG competitor

First, Google tries to buy Groupon for the sum of 6 billion dollars. Groupon says no because all the buzz they are getting is driving up their eventual IPO value. So, Google does the next best thing. They launch a competing service.

The explosiveness of services like Groupon, Living Social and their kind are really no surprise. We’ve been cutting coupons for years. The difference is that now we have the Internet.

Groupon now has a serious competitor, with instant brand recognition.Groupon’s uncontrolled growth has been fueled by our love for a deal and the inevitable nature of the Internet. This will come down to a content war, which service will consistently offer the most attractive deals. From a consumer’s perspective this has the potential to be a huge win. In the other hand, what is good for the consumers is not always good for a business. Discounts do not necessarily build brand loyalty or repeat customers. This is a win for consumers because there will likely be more, better and bigger deals coming our way.

http://tomuse.com/daily-deal-sites-groupon-disadvantages-local-business-advertising/

http://news.cnet.com/8301-1023_3-20029137-93.html

http://news.yahoo.com/s/theweek/20110318/cm_theweek/213326

What consumers want from Google, Facebook and Myspace

Google’s mobile payment system

Google, the biggest search engine site, plans to start testing a mobile-payment service at stores using near-field communication (NFC) technology, letting shoppers use their phones to ring up purchases. The NFC technology works through a built-in chip that is set in into the mobile phones, which allows this amazing device to send out data over short distances. This mobile payment option will first be available for consumers in San Francisco and New York. This happened not long after Starbucks came up with a mobile app that allows customers to pay for in-store purchases with select smartphones.

The Google service may combine a consumer's bank information, gift-card balances, store loyalty cards and coupon subscriptions on a single NFC chip on a phone. This system will draw customers looking to experience the speed, ease and convenience of paying with their mobile phone. The technology could help Google to collect information about what users are buying. This service will allow Google to measure the success of location-based and personalized advertising.

Is music the light at the end of the tunnel for MySpace?

By late 2007 into 2008, Myspace was considered the leading social networking site, and time after time beat out main competitor Facebook in traffic. When Facebook launched new features in an effort to attract a variety of users, Myspace found itself in a ongoing decline of membership. So what is MySpace doing to come back in the game? When Austin’s SXSW live music extravaganza kicked off, MySpace was there as a significant partner with music and lifestyle magazine Fader. The social networking site lived-stream over 40 musical acts. But, as everyone knows MySpace traffic is going the wrong way, but the accelerating decline and big financial losses are a serious problem.

Facebook’s user-click based search protocol

Facebook patents a new search protocol that combines search results for a user with how others connected to the user. If most of the users clicked on some of the results, the user could see these links with indications of their relative popularity. I think it could be interesting to launch a search engine that is user-click based in social networks because they could develop really specific search results with the information they collect from their users. In the other hand, I am not always looking for the same information as everyone else because I like to find out new things, things that people do not about yet.

Building a good search engine is not an easy job, even for Facebook. You have to be able to explore basically the entire web and take into account thousands of parameters. Facebook, however, has partner with a really good search engine, Bing. It's at least imaginable that with enough modifications Bing and Facebook could combine in some way into serious competition for Google.

http://www.bloomberg.com/news/2011-03-15/google-is-said-to-ready-payment-test-in-new-york-san-francisco.html

http://searchengineland.com/with-so-much-money-is-a-facebook-search-engine-inevitable-60047

Consumers and E-Marketing

The processes of reaching out to people you know is a naturally human. Advice from friends goes through at least three flaws:

1. Friends tend to think highly of their own decisions, which leads them to recommend things they have previously bought. For example, I own a Honda Civic. If a friend would come up to me asking for advise on what car should he or she buy, I would totally recommend a Honda Civic because based on my experience a Honda is durable, gas friendly, and reliable.

2. Friends tend to tell others what they want to hear. Your friends are not likely to tell you anything that disagrees considerably with your point of view. They will twist what they say about their real feelings to make them more alike with yours.

3. It is time consuming to make contact with people and get their advice. When I have a problem and I decide to fix it, I, like most of us, am not disciplined enough to wait a week or two while we reach out to selected friends in search for information.

It is then that the Internet comes really handy, making all our research easy and fast. It is also very quick and easy to reach out to retailers, salespersons or wholesalers for information. This is why the Internet is the first place people go to do research to give a hand in their purchase decision.

Even if people have to visit a store to make their purchase, you can expect they will look the store up online to check store hours, get a map and maybe even request some information before they visit the store.

Everyday the decision making process becomes more dependable on the Internet. We have the Internet available to us everywhere we go, on our phones, school, libraries, house and work. Many companies take advantages of this and create ads to activate consumers’ need recognition because consumers just don’t walk into a store and say, “I notice you have things to sell. I have some extra money I would like to spend, so just give me something and charge it to my credit card.” Consumers buy products when they believe the product’s ability to solve a problem is worth more than the value of that product.

Sources:

http://www.emarketingassociation.com/

http://www.ecommerceoptimization.com/ecommerce-introduction/

Social Media and Retailers

The growth of new media has increased communication between people all over the world. It has allowed people to express themselves through blogs, websites and pictures. Ten years ago or even less, who would even imagine that people would spend over 700 billion minutes per month on Facebook alone or that two out of three online U.S. households use social networks such as Facebook and MySpace.

Social media offers consumers an interactive and more personal relationship with a company, brand, celebrities or even friends. As people became more media savvy, they were more interested in being treated as peers.

Many companies are taking advantage of social media, including retailers. Retailers across the nation find this new way of communicating with consumers very practical and rewarding for their business. First of all, this new media is very cheap if we compare it with traditional media (television, radio). In addition, many of these retailers have really learned to take advantage of the best side of social media. Building a relationship with consumers help retailers build a reputation since this media is another word for online word of mouth.

Social media can be a powerful tool for listening to customers and building a reputation for responsive service

Retailers like Old Navy, Macy's and Gap used this tool to promote their merchandise, give coupons and inform consumers about fashion trends that will drive customers to their stores. By allowing customers to give feedback about their clothes, experience or expectations as shoppers and responding to their comments, these retailers are at an advantage because relevance it's not about pages, it's about relationships.

Sources:

http://ipwatchdog.com/2011/02/08/congress-new-media-facebook-twitter-social-media-communications/id=15036/

http://www.websocialarchitecture.com/community/2008/06/a-conceptual-ma.html

http://adage.com/cmostrategy/article?article_id=145430

Downloadable money at Starbucks

Smart-phones have similar effects on the society as regular cell phones. They are more of multi-purpose computers, allowing us to play games, take pictures or videos, send and receive e-mails and text messages, and even browse the full web. Starbucks' mobile payment application is the perfect example of how the Smartphones have clearly changed our environment completely.

Starbucks developers were trying to implement an application that will make it easier for people to buy their products. Customers can pay with their smartphone by holding their mobile device in front of a scanner on the countertop and scan the Starbucks Card Mobile App’s on-screen barcode to buy their latte, frappuchino or just a marble loaf. In recent years, Starbucks has been successful at developing a brand identity for their customers. For example, people do not only buy a Starbucks' coffee only for its flavor, but also for what its brand represents. Starbucks is outgoing, youthful and friendly. It has been demostrated trought their packaging, decor, atmosphere, product offerings and company culture. Their merchandise drives an unique flair. Starbucks customers are loyal to the brand, so Starbucks is willing to give their customers the option of the interaction with an employee or just scan their smartphone.

Through this innovative application, Starbucks is offering their customers flexibility, comfort and rapidness. Smart-phones affecting our culture and society is mostly a good thing.

Paola

Sources:

http://www.powerhomebiz.com/vol144/starbucks.htm

http://bits.blogs.nytimes.com/2011/01/18/now-at-starbucks-buy-a-latte-by-waving-your-phone/?scp=2&sq=starbucks&st=cse

http://www.highbeam.com/doc/1G1-175701974.html