Consumers’ expected quality of high discount daily deal services

Below is a guest post by Sanne Meussen, who studied consumer responses to daily deal websites in her master's thesis (which I supervised). Apart from the to-be-expected preference for higher discounts on such websites, she also found some evidence that there is a hidden danger to these high discounts...

Even though Groupon has lost $10 billion of its market value in less than one year, the number of subscribers is still growing. Apparently, consumers are still interested in high discount deals on daily deal websites. Why wouldn’t they, if they can eat a first-class meal at a local restaurant with a 75% discount? Groupon even points out: ‘we want each Groupon purchase to feel too good to be true’.

Brand personality vs image

Brand personality is often assessed in a way that does not match the way psychologists deal with the personality concept. In psychology, it is the person himself/herself that fills in a lengthy questionnaire which is then coded and results in a typology on the big five personality dimensions. In market research, brand personality is measured more often from a perceived point-of-view. Customers, or potential customers, are asked to fill in questionnaires about a brand. It is clear that the latter approach is more likely to result in an assessment of perceived brand personality or brand image, even if measures have been developed to try to focus on personality. 

In a recent presentation I elaborated on this issue. Included is a case study on how it has been applied to the study of Belgian financial banks. This case study was the subject of Jules De Bruycker's master thesis at Lessius University college, jointly supervised by me and Wim Lagae.

Link to slideshare

We are currently developing the proposed toolkit to easily assess the tension between brand personality (what the corporation thinks of its own personality) and brand image (what others think of it).

Green is for NO! Snickers' nutrition labels

Nutrition information on packaged foods indicating, for instance, caloric content is legally enforced in the United States and also in Europe there are only a few exceptions (I don't know about regulations in other parts of the world, so please leave a comment if you do so). What has been an issue, however, and one that has been debated for a long time, is the exact form these labels should have. What information should be present? In which format should it be presented? Where should the information be? There are still a number of degrees of freedom pertaining to these choices. In the USA, food manufacturers decided themselves to put the labels on the front of the packages. Being in the States at the moment, one of these front-of-pack labels caught my attention. It is the attention-grabbing green label on the Snickers bars. And I have ambivalent thoughts about it...

Example of a US Snickers calories label (originally featured on John B. Mahaffie's Blog)

How Groupon should move on

Groupon's been a mixed-feelings company lately. On the one hand, it is still one of the late boomers in the industry. On the other hand, there are some issues with the stock market entrance being postponed and accumulating stories about unhappy clients (for Groupon these are the firms/shops providing the offer). 

Although there is a vast literature about the malleability of promotions in the long term, this is even worse for services I believe. Promotions can always invoke feelings of suspicion about a product's actual price. Suppose people doubt the price for your goods, then maybe they are still willing to pay a subjectively overpriced product in the future given high customer satisfaction. If there is some behind-the-scenes production involved, people are willing to pay a higher price. So far so good, for actual goods being offered on Groupon.