E_Week2DQ Essay Example | Topics and Well Written Essays - 750 words

E_Week2DQ - Essay Example However the extent to which ad business would attain sustainability and growth is disreputable. For instance in the US market Groupon offer daily discounts ranging from 50% up to 90%. This offer is amazingly interesting to attract customers to purchase Groupon. With such steep discounts the retailer is affirmed a certain amount of sales attained by setting the minimal number of purchases in a stipulated period in order for the discounts to be effective (Verma, 2007). Despite the numerous growths attributed to massive advertising, Groupon and other coupon businesses bear losses. The companies offering the massive discounts suffer huge losses too. According to research results published in MIT Sloan Management review, three business (restaurant, car wash and spa) reported huge losses amounting to thrice the monthly earnings for the restaurant, while the other two lost more than their monthly earnings in a period of one year (Aaker, 2004). Although Chaffey (2007) argues that such losses are anticipated and that with time the business will recover due to the new customers introduced by the coupon, the expected period can be as long as 10 years. For instance the salon will need an equivalent of 8 years in order to record its first profit. Groupon and other coupon business offer unlimited merits as compared to traditional forms of advertising and marketing. Because it is free, businesses can showcase what they offer without the risk of running into losses as a result of low or no sales. In addition, sites such as www.Groupon.com and www.couponsuzy.com allow sharing of information with their partner businesses. With such incentives, businesses alleviate the huge premiums they would have otherwise paid to attain direct advertising to a certain group of people. With the help of experts, customized promotion ads are designed by the coupon sites to makes sure that the business attains the minimum sales (Kaplan, &