Final Exam

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I need you to read the article on that file and answer those questions.

1. Visit Groupon’s website at www.groupon.com. Evaluate the site from the perspective of a subscriber. What benefit would there be for sports fans?

2. Evaluate the site from the perspective of a sports property. What benefits are there for a sport property to use Groupon rather than rely on its own sales force to push ticket sales?

3. What are the advantages of using the Groupon for a sports brand?

4. What are the disadvantages of using the Groupon for a sports brand?

5. What impact do you think the steep discounts will have long term for a sports property?

6. Will fans come to expect such deep discounts? Why or why not?

7. Would Groupon be an effective tool for college sports? Why or why not? For which college sports would Groupon be a good option? For which college sports should Groupon not be used? Justify your responses.

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Groupon The name Groupon blends the words “group” and “coupon.” Some think it is the next big thing in social media. Groupon taps into the energy of online social networking and combines it with steep discounts on goods and services where consumers live. The discounts range from 50% to 80% off retail price. The catch, however, is that a certain number of people must sign up the discount or the deal is off. In addition, there is a time limit, so consumers must act quickly to take advantage of the coupon. Groupon was launched in 2008 by founder and CEO Andrew Mason. The site now has more than 20 million subscribers, serving over 500 markets in 44 countries. The original premise behind Groupon was to provide small businesses with an opportunity to grow their business and attract customers. It was to be a local shopping site. For each city, Groupon would feather one local business. It might be a restaurant, a theater, a spa, or a sports property. Coupons would be sent to subscribers informing them of the deal, how long the promotion was going to last, and how many people had to sign up for the deal. Groupon’s success is based on five key principles. First, make the interaction with subscribers simple―one deal, one day, one city. Second, create urgency by ending the deal at midnight. Third, energize the subscriber to tell others because unless enough sign up, the deal is off. Fourth, make it fun. Groupon’s website tone is upbeat and enjoyable. Lastly, make it fresh, with a new deal every day. A number of sports brands have used Groupon. For example, the San Diego Padres MLB team offered a field-level ticket, soda, hot dog, and a hat for $24, a $52 value. A total of 2,700 tickets were sold in just the one day it was up on Groupon for the July 1-4 series, and the offer went out on June 30. Of 2,700 tickets sold, 92% were redeemed. The Round Rock Express minor league baseball team has used Groupon on three different occasions. The first package was six Thursday night tickets with six passes to the stadium club for $66. The second package was five weekday tickets and five stadium passes for $59. The last package was two box seat tickets and parking for $15. Sales for the first package totaled 151, for the second package 299, and for the third package 500. Redemption rates averaged 94%. In addition to boosting sales, Groupon furnished Round Rock Express the demographic breakdown of the ticket purchasers. An added benefit was that all of the purchasers were added to Round Rock’s database for future use in any direct response marketing effort. Real Salt Lake, a MLS team, used Groupon to sell tickets to a slow July game. Over five hundred tickets were sold. Daytona International Speedway did a one-day blitz during the week hitting multiple markets on the same day. The offer was for a race and access pass. While the revenue generated was small, Groupon was able to draw in fans that had never been to a race before. The downside of using Groupon is the steep discount that is offered. While sales may occur, profit will certainly be negatively impacted. Groupon keeps 50% of proceeds from every deal, plus a small credit-card handling gee. So if a package that is valued at $100 is offered through Groupon for $50, the sports property will net less than $25 per coupon. Sports properties that use Groupon look at it a different way. Rather than think about the deal as receiving only $25 for a $100 product, the company is generating $25 for what would be an empty seat. Thus, $25 is better than nothing. In addition, the sports property may have gained a new name for their database that can be used later in a direct response marketing program. Questions: 1. Visit Groupon’s website at www.groupon.com. Evaluate the site from the perspective of a subscriber. What benefit would there be for sports fans? 2. Evaluate the site from the perspective of a sports property. What benefits are there for a sport property to use Groupon rather than rely on its own sales force to push ticket sales? 3. What are the advantages of using the Groupon for a sports brand? 4. What are the disadvantages of using the Groupon for a sports brand? 5. What impact do you think the steep discounts will have long term for a sports property? 6. Will fans come to expect such deep discounts? Why or why not? 7. Would Groupon be an effective tool for college sports? Why or why not? For which college sports would Groupon be a good option? For which college sports should Groupon not be used? Justify your responses. Sources: Fetchko, M., Roy, D., & Clow, K. (2013). Sports Marketing. Upper Saddle River, NJ: Pearson
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Running head: FINAL EXAM

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Final Exam
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FINAL EXAM

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Final Exam

Question 1
The sports fan is set to benefit from the site as they are set to receive discounts on tickets to a
sport of their choice. Usually, the cost per ticket purchased from the sporting brand is way too
high for most of the sports lovers to meet the cost. The cost of the same tickets at the Groupon
site would go for as low as 20% of the original price. Once sports lovers come together, they can
easily meet the cost.
Question 2
On the one hand, Groupon has a huge following adding up to twenty million people. Hence the
sports property reaches a large number of fun base from the website. On the other hand, they risk
hav...


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