Deal of the day : an assessment of a new form of sales promotion

Deal of the day is a new business model that has been adopted by thousands of companies worldwide. For marketers and consumers, deal of the day is a form of sales promotion in which an intermediary manages a list of subscribers, and allows merchants access to promote their offerings at a discount, in exchange for a commission. However, deal of the day is in some ways different from traditional forms of sales promotion. Deals are bought online and redeemed later, moving the risk of non-redemption from merchant to consumer. Additionally, deals are typically offered by companies in the hospitality sector, while knowledge about sales promotion is primarily based on shopper data for basic goods. The aim of the first two papers is to learn more about deal of the day. Paper 1 shows that deal of the day is used by companies from various sectors, and that they have many options to restrict purchase and consumption of deals to suit their purpose. Paper 2 finds that most consumers buy only a few deals per year, and that only a small segment buys at a very high frequency. The next two papers assess the impact that deal of the day has on existing knowledge about how consumers respond to sales promotion. Paper 3 identifies segments within the deal of the day subscriber base that should be targeted individually. Paper 4 determines that high-frequency deal purchasers are knowledgeable and social, and important for both intermediaries and merchants. This thesis shows that although consumers’ response to deal of the day is similar to what is known about traditional promotion, the wide range of merchants and deals makes it dangerous to generalize about their intentions and behavior.QC 20141201