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Sounds like he's pretty much saying "Groupon is a great tool for a specific purpose, but don't use it without thinking about it." Which is good advice.

Specifically, it will attract a lot of customers, but runs the risk of reducing customer perception of the value of your product. Sounds like a good match if bargain-seekers are your target market -- your promotion ends, and you're still among the best deals.

But it sounds like a terrible thing if you're selling the equivalent of a Lexus or Acura in your market -- luxury products defined by the perception of their extreme worth/status.

Not necessarily - groupon being on the internet and relatively 'cool' still doesn't have the public perception of a newspaper coupon.

I have used it to buy stuff at high end clothes stores (well Gap - but anything other than $3 black T shirts is high end for me!). If I ever needed more clothes I might go back to Gap, it did get me to go into a store I wouldn't have entered and was probably cheaper and more effective than them putting their name on a yacht race.

Gap is hardly the issue here. Most people who shop at the Gap won't really care if people wearing $3 black tshirts descend on the store every now and then and start wearing the clothes. For actually high-end products, making it more popular with the hoi polloi can mean the end of popularity with the original target audience, and the new market can often be more difficult to make decent profit in.

If everyone who heard about it on the internet could afford a Lamborghini, no movie star would own one, no matter how fast it went.

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