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Dearest Groupon, What are you doing?

Written and Edited by Daniel Kilkelly
Many people, or more accurately close to 111 million, tuned in to watch this past year’s super bowl between the Green Bay Packers and the Pittsburgh Steelers. Most of these viewers had tuned in to watch two powerful teams play what was predicted to be one of the closest bowl games ever played in the history of the NFL. What they did not expect was to see a new expansive group deal internet company based in Pittsburgh, to air a commercial making a plea to the ongoing conflict and situation in Tibet and suddenly turn it into a joke as the same Tibetan people were suddenly praised for their cooking and used to promote the company.Many know this story, and probably just as many recognize the amount of backlash that the advertisement took on as a result for airing it.The first question that begs to be asked then is: why did they do it?

The intent, according to Groupon, was to garner negative publicity. In doing this effectively, one could expect to receive the same amount of attention that a well-made positive ad would bring. It was also noted on Groupon’s site, that the intent was to display the “often trivial nature of stuff on Groupon when juxtaposed against bigger world issues, making fun of Groupon.”There is an underlying understanding to this rationale; most advertisements have a very generic feeling to them. Although through repetition one could still drive higher sales, a commercial that otherwise does something out of the ordinary will receive higher attention and greater recall in memory (thus being likely to pass on almost seamlessly into long term memory). However, there is also the idea of making the correct first impression, for this is going to be the basis by which consumers will return to frequently when thinking about a product or company. Groupon realized that it was a new company and needed to garner attention, what it did wrong, was to create a first impression that negatively portrayed the company in regard to Tibet.Since the nature of people is to solve problems, it’s natural for the company to have wished to attempt to draw a connection to the problem of Tibet by bringing it into their commercial, then it chose to increase the complexity of the problem by leaving out the solution to the problem (the solution being a charity fund which Groupon sales would actually be dedicated to). Yet although people were willing to seek more information after seeing the commercial to be able to “solve” the problem they experienced in the commercial, the use of sarcasm and dark humor is seldom appropriate to the average consumer when in regard to a cause related event. In a sense, the company destroyed a level of trust with potential consumers in that consumers had been led to believe that it was a cause related commercial due to the nature of the beginning. They were soon misled when the company then mocked the people that had previously been portrayed as in need of assistance. The proximity effect of these two events through a negative correlated bridge caused viewers to believe that Groupon did not understand the gravity of the situation.

I would argue that this is especially so considering that Groupon wished to begin doing business in China. Because of the long standing negative relationship shared between Tibet and China, these negative emotions now play into the business aspect of Groupon as Chinese companies will view such a blatant statement as a sign of disrespect and overall cultural insensitivity.

With damage done in markets both at home and potential ones abroad, Groupon needs to begin a very strong counter campaign and begin PR reparations. Although the company wishes to stand by its decision to create the commercial and educate consumers about its intent, this is yet another incorrect response by a company that seemingly does not care nor include consumers in its competitive strategy. The company should seek to apologize to its consumers and to China. Although the cause they wished to benefit would have been an admirable socially oriented event, this still would not have been the way to enter negotiations with the Chinese. Unfortunately, the company cannot do anything further than issue apologies without incurring further penalties. If it wishes to ardently pursue China, it may have to remove its ties with the Tibetan fund. Conversely, if it were to do this, then many more consumers at the home base would cry foul. Even worse, it would go against the principles whereupon the company was built, that being to have a socially concerned company trying to support people in need.

At this point in time, they must adhere to holding onto the Tibetan fund. This will at least help to lock-in customers in their home market, and although in the short run it may completely eradicate chances to successful business with China, in time they may be able to build better a better relationship with the company. Important as well, is the potential consumer in China. They may notice the oppression and recognize more readily the similarities between their own situation and that formerly faced by the Tibetan people. Should Groupon finally enter China, this will be recognized and rewarded. Similar venues may be available to the company if they go into other countries. Such importance will be placed on holding to their ethical roots, that if they should forego them now, the result would be devastating. By garnering more widespread approval the company may then issue a challenge to China to review its actions and thereby inspire a shift of thought.

In addition to the apologies required, further commercials and ads must more firmly establish a positive message between the company and it’s standing on social issues. In this way they can begin to rebuild trust with its consumer base. This could quite easily be done by including the names of whatever charities, groups, or funds that the company wishes to be associated with, which can be tailored to fit individual advertisements in different media to better align with market segment tastes.

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**Due to technical difficulties we recently had to switch domains and transfer all of our website content.  Please keep in mind that while we have been publishing articles for two years, the published dates shown may not reflect the initial publish date.

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