1. Contemporary Issues in Marketing Cooperative Purchasing: Old vs New Zack Leung 100185479 MRKT 4177

2. Agenda Concept of Cooperative Purchasing Business to Business Model B2B Model Findings B2C Model Transformation B2C Model Findings What’s in it for Business and Consumers Conclusion MRKT 4177: Contemporary Issues in Marketing 2

3. Cooperative Purchasing “...operational, tactical, and/or strategic cooperation between two or more organization in one or more steps of purchasing process by pooling and/or sharing their volumes, information and/or resources.” –P.F. Johnson B2B and B2C Formally and Informally – Business Co-op – Cooperative Purchasing Companies – Friends and Families MRKT 4177: Contemporary Issues in Marketing 3

4. B2B Model 3 Rules why companies purchase cooperatively 1) Servicing at Cost Road 13 Vineyard: Bottles 2)Cooperative Advantage Ocean Spray: Added Value 3)Knowledge Sharing United Service Community Co-op: Consulting MRKT 4177: Contemporary Issues in Marketing 4 Biz 1 Biz 2 Biz 3 Co-op Company Supplier

5. B2B Findings Cost Minimization – Low profits (B2B Coop Companies) Speed – Getting confirmation Technology – Better Deals Suppliers offer fixed terms Big Box Stores: Staples, Walmart, Costco MRKT 4177: Contemporary Issues in Marketing 5

6. Transformation B2C Groupon (2008) TeamBuy.ca (2010) Dragon’s Den (2:07) http://www.youtube.com/watch?v=A4Opn3QxJK4 http://www.youtube.com/watch?v=A4Opn3QxJK4 MRKT 4177: Contemporary Issues in Marketing 6 Co-op Company Supplier Consumers

7. B2C Model: Findings Effective use of marketing features – Internet Based Websites – Viral Marketing: Social Media & Emails – Layout of Website – Interactive Comment System – Simple Sign Up and Check Out – Sense of Urgency One deal per day Count down timer MRKT 4177: Contemporary Issues in Marketing 7

8. B2C: What’s in it for... Consumers – Price Reduction $14 voucher worth $35 @ Contemporary Cuisine Restaurant – Chance to explore MRKT 4177: Contemporary Issues in Marketing 8

9. B2C: What’s in it for... Businesses GrouponStats: – 16 million – hip and active college or university students – 68% are ages of 18-34 – 50% Bachelor degree – 75% work full time – $100,000+ annual income Inexpensive Marketing – Promoting – Building client base – Guaranteed returns* MRKT 4177: Contemporary Issues in Marketing 9

10. Guaranteed Returns MRKT 4177: Contemporary Issues in Marketing 10

11. Conclusion Transformed b2c model outshone the b2b – Growing more rapidly – Effective use of marketing Especially Viral Marketing (P2P) – Opened a New Market Risk Free Promotion – Win-Win Situation MRKT 4177: Contemporary Issues in Marketing 11

12. Thank You Questions or Comments? Do you think business owners should worry about their current customers taking advantage of their deal if they get featured on these websites? MRKT 4177: Contemporary Issues in Marketing 12