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Chapter 9
Bargain-a-Day Deal Appeal
Every day a big new deal—that’s the appeal of bargain-a-day websites like Living Social
[https://www.livingsocial.com/], Google Offers, and kgbdeals. Although the details vary from
site to site, the idea is the same: Consumers click to buy a coupon good for a deeply discounted
deal on a national or local product or service. One day, the featured deal might be a specialty
pizza for 50 percent off the regular price; the next day, it might be a custom photo book for 75
percent off the regular price—or even 90 percent off. Offers are typically valid for only a day or
two. The list of marketers offering deals goes on and on: bakeries and boutiques, spas and stores,
clothing companies and cafes have used deal sites to attract new customers who might otherwise
not give them a try.
LivingSocial, which often posts deals on “social experiences” such as restaurants and travel
destinations, is steadily expanding within the United States, Canada, and the United Kingdom.
Another deal site, kgbdeals, is increasingly popular in the United States and Europe.
Google Offers—one of the newer sites—aggregates deals from a number of different sites
eager to ride the wave of Google’s worldwide brand recognition. With its digital marketing
expertise, Google Offers is especially focused on matching consumers with appropriate offers in
their local area. “We believe that people want more deals that are personal to them,” an executive
explains. For a better match, Google invites consumers to take a “personalization quiz,”
indicating which categories of deals (shopping, food and drink, kids and family, and so on)
interest them.
When deal sites were in their infancy, the eyepopping introductory offers got consumers
buzzing and drew crowds of bargain hunters. Consumers tried a new service provider or product,
evaluated the results, and then figured out whether to buy from that marketer a second time. If
the initial experience was positive, consumers might be willing to buy at full price. But even if
they weren’t completely satisfied, consumers would have been able to sample the offer without
spending very much.
Soon companies large and small jumped on the deal-a-day bandwagon to bring in newcomers,
hoping that these customers would be so happy that they would ultimately become loyal
purchasers. Marketers also looked forward to selling deal-seekers additional goods or services
and encouraging them to upgrade to more expensive offerings. Often the first deal was a money-
loser for the marketer, an opportunity to establish a relationship with hordes of new customers
that might, in time, lead to profits and word-of-mouth referrals.
These days, some industry experts worry that “deal fatigue” is setting in as consumers sign up
for multiple deal sites and receive offer after offer in their e-mailboxes or via mobile apps.
Marketers are also concerned that deal-a-day regulars will become so accustomed to deep
discounts that they won’t buy unless they believe the price is as low as it can possibly go.
Meanwhile, marketers have no guarantee that they’ll wind up with as many repeat buyers as they
expected, and many disappointed firms are avoiding deal sites. How will deal-a-day sites fare in
the future?
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CASE QUESTIONS
1. Once a consumer has used a deal-a-day site, how are learning choice tactics likely to affect
their subsequent decisions?
2. In what way might deal sites affect the zone of acceptance for a product or category? What
are the implications for marketers?
3. Is it reasonable for a marketer to expect that a consumer who is loyal to a different brand
would switch to its brand after trying a deeply discounted offer on a deal site? Explain your
answer.
4. What role do you think variety seeking plays in a consumer’s decision to use deal-a-day
sites?
