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Half On

Written by Gregory Bartolomei
Edited by Daniel Kilkelly

In Pittsburgh, Pennsylvania less than two weeks ago a new business and its website was launched; the business, Half-On, runs the website www.halfonpgh.com. Half-On’s business is to offer college students in Pittsburgh discounted deals from local eateries. With the large number of daily discount firms entering the market this business plan appears to be a classic example of a leapfrog product trying to gain market share. While this is a typical if not heuristic business plan, this analysis will show that Half-On has been poorly executed and designed based upon the environment in which Half-On plans to operate. Half-On is attempting to leapfrog, and in doing so, trying to carve out a niche market for itself. However, it seems not to have analyzed its marketing, its competitors, the power of substitute products, or its consumer’s desires. This lack of analysis resulted in its poor design.Consider the website that Half-On is currently running. The concept of a web-based business is not a new concept to the average consumer; many consumers interact with them every day. However, web-based businesses have begun to recognize that their websites are the only element of their business that can be interacted with regularly. Thus, the website is an important part of their marketing; a first impression. Consumers that don’t like a website – just like consumers that don’t like a salesperson – will probably not make a transaction, or if they do make a transaction, they may not come back for future business.

A website should also be a uniquely identifying feature of a firm, after all it is part of the branding process. The landing page for Half-On is a clone of another popular daily discount firm Groupon (www.groupon.com). While it could be argued that cloning the website from Groupon is a way for Half-On to reduce the learning curve for consumers using its product, the cloned website is an element of poor design. If Half-On wants to develop a niche market in Pittsburgh then every aspect of the site should reflect that desire. The cloned site displays no attempt at individual product branding. As a matter of fact, some consumers may think they are on Groupon’s website and when they find out it is a cloned site, they may feel cheated and distrustful of the site, which is opposite of the goal.

Half-On has also failed to consider its competitors. The firm is now directly competing with every online business that offers discounts for food and beverage products local to Pittsburgh. They are additionally indirectly competing with all paper coupons and paper sales local to Pittsburgh. However, because Half-On’s measure of success is based on how many transactions it can provide for a firm (a quantifiable value), not the level of advertising they can bring, (a qualitative measure) Half-On is at a disadvantage. The disadvantage is that Half-On knows exactly how many people are using its services, while its competitor can provide estimates. This disconnect represents a divorce in the choice of a firm to engage in a set sale (such as Half-On), versus engaging in an estimated sale, which has upsides such as print advertising.

Additionally, the threat of substitute products is something that appears to have not been well considered. The value of a typical deal at Half-On is around ten to fifteen dollars at around a fifty percent discount. This brings the average cost to around seven dollars. There are at least three national brands in Pittsburgh that can beat a price of seven dollars for a meal: Subway, McDonald’s, and Quiznos. Then, there are a number of Pittsburgh local eateries that can beat a value of seven dollars on their regular menu. Because these firms can beat Half-On’s deal, with no extra work required by the consumer, a price and time sensitive consumer would desire these meals all things being equal.

The lack of design by Half-On is demonstrative of a lack of knowledge about the consumers’ desires. Half-On is partially right about what its consumers want. They know that students want better food for lower prices. However, it may be that they have not considered they have two groups of consumers – the first group being students, and the second being the firms that which they offer deals – and they have not fully evaluated what both of these groups want.

Students want better food for lower prices, but they want better food and lower prices to be given to them faster. Half-On requires students to wait until after the expiration of the deal online to be able to buy their food. If it is assumed that most college students do not plan their meals, then it can also be assumed that most meals are impulse purchases. Half-On is not time sensitive, and thus they turn away students who do not want to wait.

Half-On also does not appear to consider that the firms they don’t pick to offer deals with are just as important as the firms they do pick. Every firm they pick to do a deal with has its competitors. Half-On’s choice to do a deal with a particular firm makes Half-On a competitor with that firm’s competitors. Half-On must be mindful of this because by offering a deal, competitors could offer a deal just to undercut the business of the firm and in turn prevent Half-On from doing business.

In conclusion, Half-On will fail unless they find a way to do their business better. Half-On needs its own individualized website, a way to make their measure of success something more than just how many deals they can bring to the table, a way to undercut other low price food services, and a way to get the deals to students faster while trying not to cross compete with firms they are not doing direct deals with. Half-On is not a good business model because it was underdeveloped and rushed.

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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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