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Group-Buying Deal Popularity

Journal of Marketing, Vol. 78, No. 2, pp. 20-33, March 2014

40 Pages Posted: 18 Nov 2013 Last revised: 5 Dec 2014

Xueming Luo

Temple University

Michelle Andrews

Emory University

Yiping Song

Fudan University

Jaakko Aspara

Hanken School of Economics; Aalto University School of Business (formerly known as Helsinki School of Economics)

Date Written: November 17, 2013

Abstract

Group-buying (GB) deals entail a two-phase decision process. First, consumers decide whether to buy a deal or not. Second, consumers decide when to redeem a deal, conditional on purchase. Guided by theories of social influence and observational learning, the authors develop a framework predicting that (i) deal popularity increases consumers’ purchase likelihood and decreases redemption time conditional on purchase and (ii) these effects are amplified by the social influence-related factors of referral intensity and group consumption. This framework is tested and supported with a unique dataset of 30,272 customers of a GB website with several million data points. Substantially, these findings reveal a two-phase perspective of GB, longevity effects of deal popularity, and the amplifying role of customer referrals (influencing others) in the effects of deal popularity (others’ influence). In light of the criticism against GB industry practice, this study builds the case for GB websites and merchants to heed deal popularity information and the social influence-related contingencies.

Suggested Citation

Luo, Xueming and Andrews, Michelle and Song, Yiping and Aspara, Jaakko, Group-Buying Deal Popularity (November 17, 2013). Journal of Marketing, Vol. 78, No. 2, pp. 20-33, March 2014. Available at SSRN: https://ssrn.com/abstract=2355968 or http://dx.doi.org/10.2139/ssrn.2355968

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Michelle Andrews

Emory University ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Yiping Song

Fudan University ( email )

670 Guoshun Road
Shanghai, 200433
China

Jaakko Aspara

Hanken School of Economics ( email )

P.O. Box 479
Helsinki, Helsinki 00101
Finland

Aalto University School of Business (formerly known as Helsinki School of Economics) ( email )

P.O. Box 21230
Helsinki, 00076
Finland

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