Groupon India: The Great Onion Digital Sale

The case looks at the impact of an innovative digital marketing campaign to bring in new customers and increase brand awareness and recognition. In September 2013, Groupon India, a local e-commerce marketplace, decides to sell onions online. The price of onions in India has been rising sharply throughout 2013, making this humble vegetable nearly unaffordable to the average Indian household. With the idea of launching a bold public relations campaign, the Groupon marketing team proposes to sell onions on its website at a heavily discounted price.

The deal, which is accompanied by a tongue-in-cheek advertising campaign, is an immediate hit. At the end of seven days, Groupon India has acquired 15,000 new registrations and the average daily value of the business has increased by an impressive 50% over the seven-day promotion. The media coverage of the deal is even more remarkable. Now Ankur Warikoo, head of Groupon India, ponders what’s next. How will he ensure that the new and existing customers drawn in by the onion bargain continue to spend on his company’s website? How can he convert brand recognition into brand loyalty?

This case will enable students to examine whether it makes business sense for Groupon India to promote a loss-making sale, and discuss whether being a loss leader has longer-term advantages. Students will also understand the concept of the lifetime value of customers. They can moreover debate whether Groupon can replicate the successes of the great onion deal through other deals.

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