Lin Shuran Newland Karen

Group Buying: A Strategic Form of Consumer Collective

Findings

In this section, we will discuss about why consumers and firms take part in
GB, how GB creates value at different consumption stages.
So we will analyze findings in tree parts:
1. Consumers motivations
- value creation through collective bargaining
GB creates value through the collective bargaining between the GB
collective and the retailer.
Group buyers try to purchase desirable products at a reasonable price.
Value for money. GB can also provide a negotiation of additional services.

value creation through collective product/brand

evaluation
GB introduces consumers to potential brands, promotes consumers
experiences of product search and brand evaluation at pre-purchase
stage, and helps consumers who lack brand knowledge and experience.
GB provides needed product and brand information.
It can also help consumers to reduce risk when they make a purchase
decisions. (feels safe)
Because 1.Collective choice will be better accepted than individual
judgment; collective power will be stronger than individual capability. 2.
GB provides information asymmetry between buyers and sellers.

- value creation through the group leader

The group leader organizes potential buyers of selected brands and
connects them with sellers.
Group leaders should possess good communication skill and negotiation
skill, which are essential to get an optimal deal for BG.
(Some group leaders attain rock-star status on their forums. Star leaders
build reputations on the forum and more people will join the BG because of
their credibility. Firms also prefer rock-star organizers, just because they
are more professional and knowledgeable, they can bring more buyers and
they are able to help smooth out the transaction process. )
Some of group leaders can get perks or commissions as incentives.
2. Firms motivations

Lin Shuran Newland Karen

value creation through reducing cost for firms and

retailers.
GB speeds up cash flows in order to increase sales and facilitate firms
financial flexibility. BG helps firms to save more money and labors. It can
be also cost-effective knowledge.
- value creation through building brand awareness
it helps small-midium-size firms and little-known brands to access large
markets. So It helps to build brand awareness. GB helps them become
visible to large market. For retailers, GB can promote their visibility and
reputation.
3. Long-term benefits for consumers
- For group buyer community
The common experiences of defeating retailers help group buyers to
create a sense of camaraderie and maintain their networks. GB helps to
develop a long-term and stable community. It develops the purchase group
into a consumption group.
( for example, Gb gives the opportunities for the goup members to go to
shop, eat, or go for a trip together, so they will have fun for doing
something together.)
-

For consumer empowerment (give someone more control

over their own life or situation)
Group buyers representent a counterpower to institutional power
(opposite power)
Group buyers defend their rights and stand together in facing unethical
retilers and manufacturers in problematic consumer markets. GB enables
consumers to address the imbalance of power and protect their own
interests. Thats like a expression in chinese unity is strength

To sum up , we will discuss about the research results and give

some conclusions.
This research makes some contributions:
First, this study explains GB as a strategic form of consumer collecrive that
transcends all stages . (pre-, during-, post-)
Secend, this study combines consumers and firms perspectives through
GB. Theres a co-creation value between them.
- Some implications for consumer collective
GB members take part in a variety of practices, such as social networking
and community engagement. Group members share a collective spirit
(mind) and a moral responsibility.

Lin Shuran Newland Karen

(First, G buyers centers on consumer need that cross brands, activities and
lifestyles. It creates value in all stages.
Second, this research shows the role of leaders in consumer collectives.
Last, it focus on consumer interest protection and consumer
empowerment. )

Some implications for marketing strategy

GB enables firms to create superior value for customers. At same time

group buyers contribute value from volume purchases, word of mouth, and
customer satisfaction.
The GB phenomenon demand firms focus on customer relationship
management.
GB reflects a popular trend in the market place: so consumers and firms
joint efforts to co-create value through their experiences.
In a word, GB in not only a good choice for customers but also for firms
and retailers.

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