Small Business Institute® Journal, Vol 7, No 2 (2011)

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Promotional Strategies for Small Businesses: Group Buying Deals

Tracy L. Tuten, Christy Ashley


Online group buying through Internet-based daily deal websites such as has become a popular social commerce tool for consumers and retailers alike in recent years. Considering the benefits of deeply discounted prices for consumers and opportunities to drive store traffic and enhance product trials for retailers, the popularity is not surprising. Despite the apparent mutual benefits, there are risks too. Anecdotal evidence reported by small businesses suggests that many deal offers fail to break even, attracting one-time, price-sensitive customers. Little empirical research exists on the value of group deals for small businesses or the implications of participation on consumer attitudes and intentions. Using equity theory as a conceptual basis, the study examines how buyers value collective buying deals, and how that value translates into positive future outcomes for the firm, including repurchase intentions and positive word-of-mouth.

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