If you were a chief executive of Southwest Airlines, in need of a new strategic vision, which course of action would you choose and why in terms of a "cost leadership" or a "differentiated" business strategy? Use table 5.1 in the text as a foundation for

Five-Stage Purchase Process

Problem Recognition

This is triggered by a Groupon deal-of-the-day e-mail offer for something that someone wouldn’t ordinarily do. Groupon Now presents real-time offers on smartphone apps in response to an immediate need in a specific location.

Information Search

A Groupon offer can initiate an “internal search,” whereby the consumer might reflect on prior experiences with merchant making the offer. Also, a Groupon offer can activate an “external search,” leading to on-line comparisons with competitors, or discussing the offer with friends on Facebook or Twitter.

Alternative Evaluation

Many Groupon customers focus on price as the most important evaluative criteria, although other aspects of the offer, such as quality or time restrictions, may also apply.

Purchase Decision

The purchase decision is made online and then confirmed when the deals tip.

Post-Purchase Behavior

After the purchase and use of the Groupon offer, consumers compare the purchase and use experience with their expectations and are satisfied or dissatisfied.

Challenge

Actions/Recommendations

Groupon use and repeat purchases

Some consumers buy the coupons but never use them, eventually leaving them dissatisfied and unlikely to use Groupon again. Some consumers use the coupons but do not become regular customers. Because of the deep discounts used to sell the coupons, most of the deals are not profitable for the merchants, so they are dissatisfied if the Groupon users do not make repeat purchases. To fix these problems Groupon could send reminder messages to the buyers of the Groupons before they are going to expire and offer incentives to the consumers so that they may become repeat customers of the merchants.

Rapid Growth

Groupon has expanded into many new countries with their local daily-deal services. Currently Groupon has more subscribers abroad than in the U.S., although more deals are still sold in the U.S. As a result, Groupon can take initiative to learn and understand the different buying behaviors internationally.

Competition

Groupon’s daily deal is a very easy idea to copy and many other retailers are now offering it. In order for Groupon to take action on this is to use a point or loyalty program like that of a CVS or Rite Aid Wellness card to give their customers some incentive by becoming repeat customers and increase their use of Groupon.