Thesis Anggit MM Promotion Profitability Mbakdiskon

PROMOTION PROFITABILITY OF SOCIALPROMOTION MODEL IN MBAKDISKON.COM CASE

Thesis

As a partial fulfillment to achieve a Master Degree

Study Program in Master of Management (Magister Manajemen)

Department of Social Sciences

Submitted by

MR Anggit Tut Pinilih

to

The Graduate Program

Gadjah Mada University

2013

Table of ContentsCHAPTER 1............................................................................................................4

RESEARCH BACKGROUND...............................................................................4

1. Problem Background..................................................................................4

1.1 The Development of Internet Usage in Indonesia.................................4

1.2 Problem Formulation.................................................................................18

1.3 Research Purpose.......................................................................................19

1.4 Research Benefits.......................................................................................19

CHAPTER 2..........................................................................................................20

2.1 Marketing and Promotion Concept..............................................................21

2.2 Sales Promotion............................................................................................22

2.3 Social Promotion.........................................................................................22

2.4 Profitable Social Promotion.........................................................................24

2.4.1 New Customer Acquisition Efficacy...............................................25

2.4.2 Spend Beyond Groupon Value........................................................26

2.3.3 Repurchase in Full Price..................................................................26

2.4.3 Effects of employee satisfaction on repeat-full purchase................34

2.5 Operational Definitions................................................................................36

CHAPTER 3..........................................................................................................39

RESEARCH METHOD.........................................................................................39

3.1 Object, Time and Place.........................................................................39

3.2 Population and Sample Selection.........................................................39

3.2.1 Population........................................................................................39

3.2.2 Sample Selection.............................................................................40

3.3 Data Collection Technique...................................................................41

3.3.1 Primary Data..........................................................................................41

3.3.2 Secondary Data......................................................................................42

3.4 Research Instrument Scale...................................................................43

3.4.1 Ten-point scale.....................................................................................43

3.4.2 Percentage............................................................................................43

3.5 Variable Measurement.........................................................................44

3.5.1 Questionnaire development...................................................................46

3.6 Data Analysis Technique......................................................................47

3.6.1 Hypothesis Testing................................................................................48

CHAPTER IV........................................................................................................50

RESULT AND DISCUSSION............................................................................50

4.1 General Description of Mbakdiskon...................................................50

4.1.1 Mbakdiskon’s Merchants..............................................................52

4.2 Quantitative Analysis............................................................................54

4.2.1 Hypothesis 1....................................................................................54

4.2.3 Hypothesis 3....................................................................................61

4.2.4 Hypothesis 4....................................................................................65

4.3 Discussion...............................................................................................67

4.3.1 Profitability of Social Promotions on new customer acquisition efficacy, spend more than coupon value and repeat full price purchasing.

67

4.3.2 New customer acquisition efficacy on Coupon face value, redemption duration, and depth of price discount....................................68

4.5.3 Spend beyond coupon value on Coupon face value, redemption duration, and depth of price discount.........................................................68

4.5.4 Repeat Full Price Purchase on Employee Satisfaction...............69

CHAPTER V........................................................................................................70

CONCLUSION, LIMITATIONS, AND SUGGESTION.................................70

5.1 Conclusion...................................................................................................70

5.2 Research Limitations.................................................................................71

5.3 Suggestion...................................................................................................72

References.............................................................................................................77

List of Tables........................................................................................................82

List of Figures.......................................................................................................83

CHAPTER 1

RESEARCH BACKGROUND

1. Problem Background

1.1 The Development of Internet Usage in Indonesia

The internet and internet related industry has grown rapidly in the last 10

years in Indonesia. It is supported by the trend of how actually consumers adapt

fastly toward internet. The internet industry itslef has shifted Indonesian economy

these 2 years. Google captured data statistics that in 2010 internet industry

contribution in Indonesia had exceeded its LNG Industry contribution toward

country’s GDP

Figure 1.1 Internet Penetration in Indonesia

Source : World Bank, 2012

Figure 1.1 shows that the internet user in Indonesia had reached 10% of its

population in 2010. Indonesia had grown 4.1 percent compared to the total

internet users in Asia. Although internet in Indonesia is considered as one of the

slowest in Asia based on Minister of information’s statement in May 2012, the

internet penetration is high especially in mobile internet. Mobile phone

penetration in Indonesia rise to 66%, which is higher than China and India.

Penetration toward mobile internet users in Indonesia is also the highest among all

BRICI countries. Internet penetration in urban area has reached 40-45%, about

10-15% increase compared to 2011. Markplus research resulted that internet user

in Indonesia has reached 55 million people in 2012 ( 42 million peole in 2011) .

Internet users are growing from the age-segment of 15-20 years old to 15-

30 years old. Most of these segments use internet 3 hours per day at the minimum.

The use of internet in Indonesia is significantly grown in three field, social media,

information and media search, and the new field, which is called e-commerce or

online shopping. In social media, it was reported that Indonesia is ranked no 5 for

its total twitter user in the world, wtith the total 23,8 million twitter accounts and

no 8 for its total Facebook user in the world with the total 26 million facebook

accounts. Information search increase 5% from 2011, mostly from picture-

searching (76%), music or audio (43%) and video 33(%).

The use of internet has started to exceed not only the communication

aspect, but also financial transactions. The internet development journey in

Indonesia is started from social networking into e-commerce (Frost and Sullivan,

2012). Markplus research also stated that the growth of online shopping or e-

commerce user in Indonesia was increased by 100% in 2011 compared to 2010.

At least there are 25% of internet users are using internet and sms banking.

Internet banking are dominated by Bank Mandiri and BCA. The trend of

increasing use in internet banking can also be seen by user’s traffic to internet

banking website which is www.klikbca.com and www.bankmandiri.co.id which is

on rank 15 and 28 according to Alexa.com ( Alexa is a web service to rank

websites popularity in certain country ) . E-commerce website such as

tokobagus.com, tokopedia.com, livingsocial.co.id, groupon.co.id are also ranked

in top 100 popular websites amongst over 100,000 websites in Indonesia

measured by Alexa.

Until 2012, in Indonesia has reached 2.4 million search using google

toward online shopping website per day. Indonesia is no.2 growing numbers after

Brazil. The internet penetration and its usage in Indonesia show that consumer

lifestyle has shifted from offline to more online lifestyle. The fact is also causing

effect on marketing and promotion.

Today’s marketing environment can be very noisy and consumer tends to

avoid traditional advertising for example like consumer switch television channel

when the advertisement comes up. For small businesses for example, local

restaurants and spa, it is very costly to promote using the traditional marketing

tools like TV Ads, Billboards or Radio Ads. Since 2012, all customers were

engaged through internet, Internet itself has proven to be an effective and efficient

tools for marketing. Effective, because through internet small business promotion

http://www.bankmandiri.co.id/

http://www.klikbca.com/

effort is easily measurable. It enables small businesses to build real-time

communication with costumer using social media, chat and messenger application

etc. It is Efficient because social media is free to use. The budget is also easily

arranged and customized to the small business owner capacity. For example,

using facebook, despite of its free service using fanpage or group for promotion,

small business owner can set its advertisement target specific market segment

based on age, location, sex, interest and also set its ads maximum budget per day.

According to an article by Hudyana (2011), Marketing Manager of

Indonesian E-commerce, Blibli.com, today the highest population is concentrated

in the age segment between 15 – 19 years old and this age segment group does not

watch television anymore. They are spending most of their times to socialize with

their friends outside. Therefore television has become less effective promotion

tools, but social media and e-commerce has become the solution in selling any

brands. For brand marketers, there is no turning back to rely only on traditional

media, given that people were increasingly spending their time on the Internet.

In Indonesia, there are some cases about how internet marketing can

successfully sell some new brands over traditional marketing. Sour Sally is known

to be a popular yoghurt chain which popular because of word-of-mouth from

female college students in Jakarta through social media. The second brand that

has successfully promoted itself through social media is Holycow Steak. Holycow

steak was opened at March 2010 and 95% of its customer at the first two months

knows about the restaurant from Twitter. Newspaper Kompas noted at July, 22nd

2010 twitter follower (Follower is a term for twitter user) of Holycow was

increased by 546 people in just 3 days. Internet has become the new way of

marketing, many big brands have shifted their marketing strategy which includes

online promotion.

Customer power is increasing today because through internet customer can

be connected with other customer or to the brand itself without any boundary. In

the concept of social shoppers from Marketeers Magazine in June 2011, it was

stated that there are many both individuals or community that do both buy and sell

transcation on social medias. Anyone can be a “Seller” and “Buyer” at once.

Marketing activity has not just concentrated toward big brands also small brands

even any person for example there are many online shops in facebook.

Those new ways of consumer behavior has forced the development of e-

commerce in Indonesia. E-commerce has not only become a popular tools for

transaction as stated above, but also become popular to help small brands to

market its product online. One model of e-commerce that will be discussed in this

thesis is a social commerce service which pioneered by Groupon followed by

Livingsocial in US. Social commerce or in Marketers Magazine defined as a

shopping group which pushes a group of shoppers to buy a product or service

together to get the economies of scale or cheaper price. The business model of

Groupon is that Groupon sell coupons of merchants with its terms and conditions,

retains its percentage of coupon value and passes the rest to the merchant. The

service stands between merchants and costumer, merchants got offers and

customers collect as much as people needed to exceed the threshold. If the number

of customer is not achieving the threshold, it means the deal is not tipped, then the

deal is cancelled. More detail about Groupon model will be discussed in the

literature review.

Groupon model has known to help introducing new brand or local

services/ product to massive ammount of new customer through its deals.

Groupon claimed that its service will delivers new customers that have the

potential to become regular customers. Compared to traditional marketing,

Groupon offers more effective and efficient solution for small businesses. First, to

set a deal is free, and merchant can set its own thresholds and they only pay

commission whenever the threshold is exceeded. In traditional ads for example

like Billboard and TV Ads , small business have to incur high price but there is no

guarantee how much customer will come to your restaurant and spa.

The groupon model or in the other terms sometimes it is called by “ group

or social – shopping site” or “daily deals site” were reported to be the fastest

growing company in 2010 (Steiner,2010). In 2010 groupon has gained over 150

million subscribers and have sold over 3 million daily deals. The global daily

deals industry ranked Groupon as no.1 service, followed by Livingsocial and

Woot. Groupon is operated in about 335 cities in 30 countries including Indonesia

where it operates in Jakarta. The model is also being cloned globally with almost

500 clones in China. In Indonesia reported by Techinasia.org (2012) that Groupon

now has around 30 active Groupon clones.

In Indonesia, the model was introduced in the late 2010 by Disdus.com

and Dealkeren.com and then followed by over 30 Groupon clones.

Most of the merchants are coming from restaurant, beauty (spa and salon),

health care, sports service industry. The boom is also supported by the growth of

its merchant’s industry in Indonesia.

Table 1.1 GDP Based on Industry in Yogyakarta Province (in Billion rupiahs

2004-2011)

Industry 2004 2005 2006 2007 2008 2009 2010*2011*

*

Agricult

ure

329,1

24.6

364,1

69.3

433,2

23.4

541,9

31.5

716,6

56.2

857,1

96.8

985,4

48.8

1,093,

466.0

Mining205,2

52.0

309,0

14.1

366,5

20.8

440,6

09.6

541,3

34.3

592,0

60.9

718,1

36.8

886,2

43.3

Assembli

ng

644,3

42.6

760,3

61.3

919,5

39.3

1,068,

653.9

1,376,

441.7

1,477,

541.5

1,595,

779.4

1,803,

486.3

Oil and

Gas

94,26

3.4

138,4

40.9

172,0

94.9

182,3

24.3

237,7

71.6

209,8

41.1

211,1

39.0

249,4

37.4

Electricit

y and

water

23,73

0.3

26,69

3.8

30,35

4.8

34,72

3.8

40,88

8.6

46,68

0.0

49,11

9.0

55,70

0.6

Construc

tion

151,2

47.6

195,1

10.6

251,1

32.3

304,9

96.8

419,7

11.9

555,1

92.5

660,8

90.5

756,5

37.3

Trade,

Hotel

and

Restaura

nt

368,5

55.9

431,6

20.2

501,5

42.4

592,3

04.1

691,4

87.5

744,5

13.5

882,4

87.2

1,022,

106.7

Whole

saler and

retailers

287,5

53.5

338,6

67.2

393,0

47.4

468,7

34.3

551,3

43.7

586,1

11.8

703,5

65.8

826,1

83.3

Hotel12,68

5.4

14,14

6.9

16,07

4.2

17,32

0.4

18,90

0.3

20,78

1.5

23,87

6.6

26,30

2.0

Restau

rant

68,31

7.0

78,80

6.1

92,42

0.8

106,2

49.4

121,2

43.5

137,6

20.2

155,0

44.8

169,6

21.4

Transpo

rtation

and

Commu

nication

142,2

92.0

180,5

84.9

231,5

23.5

264,2

63.3

312,1

90.2

353,7

39.7

423,1

65.3

491,2

40.9

Finance,

Real

Estates

and

Services

194,4

10.9

230,5

22.7

269,1

21.4

305,2

13.5

368,1

29.7

405,1

62.0

466,5

63.8

534,9

75.0

b. 115,7 141,0 168,4 192,8 224,3 255,5 300,5 351,1

Private 40.9 71.4 59.2 52.8 00.6 35.7 24.6 85.1

1).

Civil

society

service

38,85

2.4

48,67

8.5

58,18

2.9

69,96

8.5

83,83

4.5

97,48

9.3

114,2

37.6

134,7

26.8

2).

Entertain

ment

7,605.

2

8,739.

4

10,17

2.3

11,29

3.2

13,02

7.7

14,80

6.6

17,34

5.0

20,45

5.7

3).

Househol

d

69,28

3.3

83,65

3.5

100,1

04.0

111,5

91.1

127,4

38.4

143,2

39.8

168,9

42.0

196,0

02.6

GDP2,295,

826.2

2,774,

281.1

3,339,

216.8

3,950,

893.2

4,948,

688.4

5,606,

203.4

6,436,

270.8

7,427,

086.1

GDP

without

Oil and

Gas

2,083,

077.9

2,458,

234.3

2,967,

040.3

3,534,

406.5

4,427,

633.5

5,141,

414.4

5,936,

237.8

6,794,

373.4

Source : BPS, 2011

In Yogyakarta, there are only one social commerce service which is active

since 2011 until 2012. It is named Mbakdiskon.com. Mbakdiskon.com was

established in March 2011 in Yogyakarta. In November 2012, it operated in

Yogyakarta, Semarang, and Jakarta area. In November 2012, Mbakdiskon.com

had over 8,000 members with over 200 merchants. The research will take

Mbakdiskon.com as a research object.

March April

May

JuneJuly

August

September

October

November

December

January

Febru

ary

March April

May

June -

10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000

Billing Revenue

Figure 1.2 Revenue : Billing Mbakdiskon.com (in Rupiah) March 2011 to June 2012

Source: Mbakdiskon sales data, 2012

The graphic shows us total transaction (billing) compared to

Mbakdiskon.com’s revenue per month from March 2011 until June 2011 in

rupiah. Mbakdiskon.com’s revenue comes from 20-30% comission for each

merchant’s deals bought by customers. The growing revenue shows the positive

trends toward the use of Mbakdiskon.com as a promotion tools for merchant

especially in Mbakdiskon’s area. It is also supported by the graph below. It shows

that positive trend is trending to its customers since the user is growing month per

month alongside with the total coupon bought. The trend shows that promotion

using Mbakdiskon.com in its operating area, Yogyakarta, Semarang, and Jakarta

tends to be effective.

March

AprilMay

JuneJuly

August

Septem

ber

October

November

December

January

Febru

aryMarc

hApril

MayJune

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Amount of Coupon BoughtTwitter UsersWeb Users

Figure 1.1 Twitter, Facebook, Web User, and Total Coupon Bought at

Mbakdiskon 2011-2012

Source: Mbakdiskon promotion data, 2012

The research will not go deeper on customer’s perspective in effectiveness

of the Mbakdiskon promotion but the research will go deeper on the merchant’s

side as the supplier of the deals. The research investigates whether promoting

business through Mbakdiskon will bring profit in the future to the merchant or

not. The supplies of merchant will be critical for social commerce model in terms

of maximizing company’s value through both number of user base and its main

revenue point which is deals commission In this research, Mbakdiskon.com

revenue is still growing, and the company has the vision to expand the service to

other cities in Indonesia. Thus, the research is required to support the company’s

expansion strategy in maintaining the long term relationship for merchant supplies

and building new relationship with new merchants in new targetted operating

areas.

Prior research had been done in United States in 2010 to 2011 by Dholakia

(2011) , taking over 150 merchants of Groupon.com as samples. This research

would adapt the prior research model to Indonesian market especially in

Mbakdiskon.com business scope in the targeted time period which is in between

2011 to 2013.

Figure 1.4 Conceptual Model of Social Promotion Profitability in Prior

Research (Dholakia, 2011)

Prior research is investigating the promotion profitability of Groupon,com

for its merchant using Figure 1.4 model. The tree profitability drivers which are

new customer acquisition efficacy, spend beyond coupon value and repeat full

Profitable Promotion

New Customer Acquisition

Efficacy

Spend beyond coupon value

Repeat full price purchase

Coupon Face Value

Depth of Price Discount

Offer Redemption

Duration

Employee Satisfaction

H1

H2

H3

H4

price purchase play central roles in the prior research model. And in the prior

research model, the three profitability drivers are in turn , affected by features of

the promotional offer including the coupon face value, depth of price discount,

and the duration of the redemption period. Prior research also emphasizes on the

important purpose of price promotions which is to initiate long-term profitable

relationship with new customer. A Key metric to evaluate promotion’s success in

the prior research is the degree to which coupon user return and purchase from

business again at full price. Prior research hypothesize that the degree to which

employee of the business are satisfied with the promotion will positively influence

the longer term behavior of Groupon user. To test the hypothesis, prior research

estimated a combination of linear and logistic regression using Mplus 6.0 path

analysis. From hypothesis 1, it resulted that simplye getting new customer to

purchase the coupon even when they do not spend beyond the coupon value on

the occassion of redemption is sufficient to have a profitable promotion and the

result also supported that firm that gain long-term customer from Groupon

promotion is reported to be profitable. From Hypothesis 2, it resulted it may be

better served offering a coupon with a higher face value but lower depth of price

discount to garner a profitable promotion. From Hypothesis 3 , it resulted shorter

term of redemption period is necessary to have a profitable promotion. From

Hypothesis 4 it resulted that it is strongly being supported that employee

satisfaction will lead to customer satisfaction in which may convert those

customer to be a repeat long-term customer.

This research will adapt the model, but use different method of analysis in

which for each hypothesis will be tested separately whether using linear or logistic

regression in SPSS because of Mplus software limitation

1.2 Problem Formulation

Social promotion model is a new model of marketing adapted by local

businesses in global market pioneered by Groupon in US Market. Although news

articles stated that the model is booming but prior researches had the evidence that

the model is not necessarily profitable for some business.

Therefore , the research will propose some problem formulations which

concern about the profitability of social promotions to local business in

Mbakdiskon.com’s case in Yogyakarta as deep as the. Local business will refer to

businesses from various industries that has been into merchant partnership

program with Mbakdiskon.com since March 2011 until December 2012. The

researcher addresses the problem formulation as :

1. Is social promotion model at Mbakdiskon.com profitable for merchant ?

How is the profitability of social promotion model at Mbakdiskon.com

merchant?

2. Do the increase of promotion profitability key drivers will affect the

promotion profitability?

3. Do the increase of coupon face value, depth of price discount, and

redemption duration will affect the new customer acquisition efficacy?

4. Do the increase of coupon face value, depth of price discount, and

redemption duration will affect the percentage of customer who spend

beyond coupon value?

5. Do the increase of employee satisfaction will increase the percentage of

customer who repurchase at full price?

1.3 Research Purpose

The research is proposed to some research purposes which are :

1. To identify whether social promotion model is profitable to

Mbakdiskon.com merchant and to describe the profitability of social

promotion model.

2. To identify the key drivers of promotion profitability in Mbakdiskon.com

which consists of acquiring new customer efficacy, spending more than

coupon value, and repeating in full price purchase.

3. To identify the social promotion characteristics that affects the new

customer acquisition efficacy.

4. To identify the social promotion characteristics that affects customer to

spend more than coupon value.

5. To identify whether employee satisfaction during the Mbakdiskon

promotion affects repeat full price purchasing at the second visit by

customers.

1.4 Research Benefits

1. To provide market insights on merchant profit and benefits in running

Mbakdiskon social promotions.

2. To provide basic information for the company the formulate future

merchant partnership strategy in order to support the expansion plan to

other cities in more beneficial way.

CHAPTER 2

LITERATURE REVIEW

2.1 Marketing and Promotion Concept

Company’s orientation toward marketplace has evolved time to time. The

oldest concept started with production concept, then it evolved to selling concept.

The selling concept holds the business and the consumer, if left alone, won’t buy

enough company’s products. The organization must therefore undertake an

aggresive selling and promotion concept. Sergio Zyman expresses that the

purpose of marketing is to sell more stuff to more people more often for more

money in order to make more profit ( Kottler and Keller, 2009). The following

concept emerge is the marketing concept itself where Theodore Levitt from

Harvard drew a contrast perspective on the difference between selling and

marketing concept. Selling focuses on the needs of seller while marketing on the

needs of buyer. The job is not to find the right customer for your product but to

find the rights product for your customer.

In the company the job of marketing is to integrate marketing activities.

Mc Carty classifies marketing activites integrated in marketing mix tools.

Marketing mix tools consisted of 4Ps, which are product, price, place and

promotion. Product will considered activities related to product variety, quality,

design, feature, brand name, packaging, size, service, warranty, and return. Price

will considered activities related to pricelist, discount, allowance, payment period,

credit term. Promotion will consists marketing activities related to sales

promotion, advertisement, sales force, public promotion and direct marketing.

Place will consists of channel, coverage, assortment, location, inventory and

transportation. The following section will discuss promotion related to sales

promotion and consumer purchase behavior deeper, responding to those activities

that will define profitability of daily deals models for merchant.

2.2 Sales Promotion

The purpose of promotion strategy is to manage the organization’s

communication initiatives, coordination and advertisement integration, personal

selling, sales promotion, interactive/internet marketing, direct marketing, and

public relation to communicate with buyers and others who influence purchase

decision ( Cravens and Piercy, 2009).

Sales promotion consists of various promotional efforts which are trade

shows, contests, samples, point of purchase displays, product placements, trade

incentives and coupons. Sales promotions can be used to target buyers, respond to

special occasions, and create incentive to purchases. Coupon is one of sales

promotion tools to create incentive to purchase.

2.3 Social Promotion

One of the popular sales promotional tools today is called social promotions sites,

which is done online (e.g, Fowler 2011; Lyons 2010; Underwood model is

introduced firstly by the largest player in the market , Groupon, known to have

more than 300 markets in 35 countries in February 2011 (Dholakia, 2011).

The model is that social promotion site is cooperating in small-medium sized local

business to offer consumer significant discount deals such as $49 worth of sushi

for $20 or $175 worth of spa for $59. When purchasing the deal, consumer pay

for the product upfront and then have a stipulated amount of time, up to a year to

redeem it at its business (Dholakia, 2011). The promotion is valid when the deal is

tipped which require a certain minimum number of customers purchasing the deal,

pre-specified by the business running the promotion. The system stimulates the

viral promotion in facebook updates, twitter tweets, and text messages as

consumer encourages friends, family members, and acquaintances within their

social network to tip the deal.

Social promotions ussually offers big discount at reguler price providing customer

with low-risk opportunities for customer to try new product or service. Social

promotions usually has a short time frame, from a single day to a single week.

The short time frame creates sense of urgency to purchase the offer and makes the

anticipation waiting for the next offer as an exciting daily ritual for customers.

Urban dictionary has coined the phrase of “groupon anxiety” to refer “the pre-

occupation and feeling of anxiousness and not being able to sleep knowing that a

new Groupon will be released after 1.am.

Besides , supported by the prior research, the social promotion is favorable for

new small and medium sized business because price promotion can draw new

customers to business ( e.g, Walterns and Mackenzie 2008).

2.4 Profitable Social Promotion

Based on prior research, profitability of social promotion will use key metrics that

the firms employ to evaluate a social promotion success. Prior research indicates

the key metrics relevant in determining price promotion’s profitability including

1) its efficacy to bring in new customers to the firms , 2) the degree in which the

customers redeem the buying promotion beyond its face value ( Aydin and Zilla

2008), and 3) the degree in which redeemers make repeat purchases at full price in

the future. Each one will be described in detail in the following section. From

prior research, the New customer acquisition efficacy and repuchase in full price

show significant result while the spend beyond face value was not show

significant result ( Dholakia, 2011).

From prior research sampling, it is found that 66% of respondent states

that it is profitable to run social promotion, and about 32% report that it is

unprofitable. For the unprofitable business only 25% reported redeemers purchase

product or services beyond face value and less than 15% came back a second time

to purchase in full price. Only around 8% of the firms would run another

promotion. In prior research regarding the industry, it shows a relatively low

percentage of deal users spending beyond its value (35%), and return at full price

purchase (19%), the research define both not only as profitability key metrics of

daily deal promotion but also stated that these two points are the weakness of the

model.

Restaurants appeared particularly susceptible to negative outcomes. 42%

restaurant in the sample reported unprofitable promotions. On the profitable

samples, the firms show doubled number of redeemers buying beyond social

promotion value (50% vs 25%) and a greater percentage repurchasing at second

time (31% vs 13%) when it is compared to the business which express

unprofitable social promotions. In prior research it is also stated that spa and

salons are the most beneficiary business regarding the social promotions. 82% of

spa and salon business respondents stated that it’s profitable to run a social

promotions.

Another prior research also founds that daily deal profitability is affected

by the age of the business ( older, or more established business had greater

incidence of profitable deals) and neither spending levels of customers nor size of

business impacted deal profitability.

2.4.1 New Customer Acquisition Efficacy

The main purpose of price promotions is to encourage trial of new product or of

an existing product to new customer ( Dholakia, 2011). Short term or one time

discount in price promotion can reduce customer risk and make the product trial

more attractive to new customer ( Blattberg ad Neslin 1990; Lewis 2006). In

groupon promotion video in their website, it was stated that bringing new

customer is a primary goal for social promotion site.

H1A : New customer acquisition efficacy has significant effect on profitability

of social promotion

2.4.2 Spend Beyond Groupon Value

Second key metric used to evaluate promotion profitability is how the promotion

can generate spending among users beyond its value at the occassion of

redemption. For example, when a user redeem a $ 10 worth of food for $5 , user

also buy drink for $15. Furthermore, a distinct and explicitly acknowledged

function of many social promotions is to serve a loss leader with the goal of

getting customers in the door and have them spend beyond face value ( e.g.,

Gerstner and Hess, 1990).

H1B : Spend more than coupon value has significant effect on profitability of

social promotion

5.3.3 Repurchase in Full Price

The third key metric focuses on the long-term behavior after the occassion of the

social promotion. A social promotion succeeds when it entices new customers to

try a particular offering through a compelling offer and they like it so much that

they buy it repeatedly, and becoming firm’s relational customers (Dholakia,

2006). The long term expectation of repurchase in price in the future justifies the

loss that is incurred by the business on the occassion when people redeeem the

coupon ( e.g. Reichhel, 2001; Scott 1976).

Prior research examines one case in a firm that run social promotions for certain

period, findings states that social promotion accelerates the purchase rate of full

price customer. Compared to the rate of purchase during the period before the

social promotion, the purchase rate of full-price paying customers (some of which

were those who first came to the firm because of social promotion) was more than

three times higher during social promotions and was sufficient to push the profit

per transcation into positive territory throughout time period (Dholakia, 201). In

specific case study on merchant experience toward social promotion, the research

founds that social promotion had a significant exposure value , amounting to lift

of 140% of baseline sales over the duration of promotion (Dholakia, 2010).

From prior research, though majority of the social promotions merchant seems to

be satisfied and intend to run another promotion an industry in which two in five

customers are hesitant after first purchase, and where the customer base is

relatively limited pool of small businesses with strongly interconnected social

networks that could quickly spread news of dissatisfactory results may need to

modify the overall strategy.

H1C : Repurchase at second visit in full price has significant effect on

profitability of social promotion

Hypothesis 1 : (A) New customer acquisition efficacy, (B) spend more

than coupon value, (C) Repeat full price purchase will each have positive

impact on the social promotion profitability

Figure 2.1 Hypothesis 1 : New customer acquisition efficacy, spend more

than coupon value, repeat in full price purchase will affect the promotion

profitability

Source : Adopted from prior Research ( Dholakia, 2011)

2.4 Social Promotion Characteristics and Social Promotion Profitability

In prior research, the three profitability drivers are affected by social promotion

characteristics which are the face value, depth of price discount offered, and the

duration of the redemption period.

c A

B A

AH1

Repeat full price purchase



Efficacy

Profitable Promotion

2.4.1 Face Value

Face value described as the total value of the product that can be purchased

through the offer ( Dholakia, 2011). A higher face value provides a greater

amount of saving in dollar terms for customer. For example, within the same

percentage of discount a social promotion with a face value $50 will yield bigger

amount of dollar discount than a social promotion with a face value of $20.

Higher face value provides important utilitarian benefits to consumers in the form

of increased perceptions of savings ( Chandon et al. 2006) and reduced financial

risk to purchase (e.g. Conchar et al 2004). Because of this attractiveness, a higher

face value is expected to bring more new customer tested in the prior research.

Higher face value coupon also is more likely to be redeemed than those having

lower face values. (e.g Bawa and Shoemaker 1987; Reibstein and Traver 1982).

Prior research also supported that higher face value will garner profitable social

promotion by bringing new customers to the business ( Dholakia, 2011).

H2A : Higher face value of the coupon the higher the new customer acquisition

efficacy

The higher the face value the more likely to approach the amount the customer

normally spends during a store visit, consequently costumer will less likely to

spend beyond face value at redemption occassion. Prior retail research also

supports that consumers are good at adjusting their spending to account for a

coupon’s use ( Hess and Getner 1993) ; using a coupon does not necessarily

increase the customer overall spending at the store during the visit ( Russel and

Petersen , 2000). Prior research support the result that face value is a negative

predictor ( Dholakia, 2011).

H3A : Higher face value of the coupon the lower the customer spend more than

coupon value

2.4.2 Offer Redemption Duration

Redemption duration described as how long the consumer has to redeem the

purchashed social promotion before it expires. Offer redemption is also another

important decision variable for the firm and in the case of social promotion sites ,

firm has considerable latitude in choosing the duration ( Dholakia, 2011). Just

like depth of discount, the redemption duration has different implications

depending whether consumer behavior is considered or not. A longer redemption

duration can be unfavorable for the form because it may leave outstanding

unredeemed coupon as potential liability that must be honored ( at least at the

value the customer has paid) as and when customers choose to redeem them

( Inman and Mc Alister 1994; Kile 2007) and also potentially affect full-price

sales adversely during this time (Krishna and Zhang, 1999).

From the customer standpoints, a longer duration for redemption is likely to act as

a risk-mitigating mechanism and increase the promotion’s attractiveness to new

customers. According to Krishna and Zhang, for firms that relatively have low

market shares in the category ( which is likely to be the case for most small and

medium-sized firms running the social promotions) using a longer redemption

duration can relax redemption pressure and even attract customers who may

otherwise prefer other brand in the marketplace. Prior research by Dholakia

(2011) shows that offer redemption duration has supported the new customer

acquisition efficacy for the firm.

H2B : Higher redemption duration of the coupon the higher the new customer

acquisition efficacy

Furthermore in the case of a social promotion with longer redemption period more

consumers are likely to redeem it at a timepoint which is distant from the time of

purchase; consequently the pain of paying fo the social promotion is likely to have

diminished ( Gourville and Soman, 1998), the research expect more redeemers to

spend more than coupon value when the offer has longer duration.

H3B: Higher redemption duration of the coupon the the customer spend more

than coupon value.

2.4.3 Depth of Price Discount

Another important characteristics is percentage discount offered or ussually

refered as the depth of price discount ( Alba et al 1999; Raghubir and Corfman

1999). From the firm standpoint, greater amount of discount or the deeper is the

discount is not necessarily better because the firm will lose money on the

promotion ( e.g, Porter 2011). If the effect of the discount dept on consumers

behaviors are considered explicitly the net effect could be different (Dholakia,

2011).

From the customer standpoint, prior research on pricing has shown that the deep

discount reduces price expectations ( Kalwani and Kim, 1992) and reference price

(Greenleaf, 1995) directly affect the social promotion’s appeal for the customers.

The effect is even more pronounced to new customers because of the significant

diminishing level of risk upon receiving a deeper discount to try the product

(Lewis, 2006), making them more willing to purchase the social promotion and

engage in trial. Latest research done by Dholakia (2011) shows different result

which supports lower depth of discount will support new customer acquisition

efficacy.

H2C : Higher depth of price discount the higher the new customer acquisition

efficacy

Receiving a deeper discount lowers the price perceptions of consumers regarding

the product being purchased ( Alba et al. 1999) and unlike the face value this will

encourage spending beyond face value itself ( e.g. Hardie, 1996). In a nutshell,

consumers may feel that because they are getting such a good deal it is acceptable

to spend more that they normally would ( Dholakia,2011). In summary, depth of

price discount can be seen as eroding profitability in firm standspoints but by

attracting new customers and getting users of the promotion to spend beyond its

face value the deep discount can be contributory to the profitable social promotion

( Dholakia, 2011).

H3C : Higher depth of price discount the higher the the customer spend more

than coupon value.

Hypothesis 2: (A) Coupon face value, (B) The depth of price discount,

and (C) offer redemption duration will each impact new customer

acquisition efficacy for the business positively.

Figure 2.2 Hypothesis 2 : Coupon face value, depth of price discount, and redemption duration will influence customer to new customer acquisition

efficacy.


Hypothesis 3: (A) Coupon face value will impact the customer spending

more than coupon value negatively, (B) The depth of price discount, and

(C) offer redemption duration will each impact the customer spending

more than coupon value for the business positively

c A

B A

AH2

Redemption Duration


Coupon Face Value


Efficacy

Figure 2.3 Hypothesis 3 : Coupon face value, depth of price discount, and redemption duration will influence customer to spend more than coupon

value


2.4.3 Effects of employee satisfaction on repeat-full purchase

The next important issue toward firms that applying social promotion is the

sustainability of the promotion itself, how a frim can develop a long-term

relational customers after the occassion of the promotion ( Dholakia, 2006). To

that end, as discussed earlier, a key metric to evaluate promotion’s success is the

degree to which coupon users return and purchase again from the business in full

price. Prior research has proven that although social promotion’s characteristics

can bring new customers to the business and influence their behavior on the

c A

B A

AH3

Redemption Duration


Coupon Face Value

Spend more than coupon value

occassion when the promotion is used, how their employees view them and treat

them wll influence whether longer-term benefits accrue to business (Dholakia,

2011). Business in which the social promotion does not cannibalize sales to

existing customers may be the ones most likely to benefit from it because of its

significant impact of effectiveness in reaching new customers (Dholakia,2011).

Prior organizational research indicates that employee attitudes and behaviors can

significantly influence business outcomes. Koys (2001) found that employee

satisfaction at time period 1 has significant effect on customer satisfaction at time

period 2. Schneider, White and Paul (1998) found that employee perception of “ a

climate of service” lead to subsequent customer perception on higher service

quality. Within these findings we hypothesize that the degree to which employee

of the business are satisfied with the promotion will positively influence long term

behavior of social promotion users.

Prior research argued that satisfaction of employees during the occassion of the

redemption period may require some preparation to transform new customers to

relational customers over the long-term. Such preparation may entail advance

notice regarding heavier burden of work, training and even additional

compensation for the longer hours and potentially lower gratuities the employee

might earn. In prior research , it resulted that it is important of getting employee

buy-in for the promotion in order to convert social promotion customers into

repeat long-term customers. Prior research also founded that unprofitable business

stated that the social promotion user did not come back to repurchase at full price

but only come-back whenever there is another promotion and user did not make

employees make money because the social promotion customers did not tip as

most cutomers do.

Hypothesis 4: The satisfaction of the business’s employees with the social

promotion will impact the repeat purchase of coupon redeemers at full

price purchase positively.

Figure 2.4 Hypothesis 4 : Employee Satisfaction will Influence The Customer

to Repeat Purchase at Full Price


2.5 Operational Definitions

To avoid any misinterpretation, several operational definitions used in the

research would be defined below.

1. Promotion profitability

H4


Repeat Full Price Purchase

Promotion profitability is defined as social promotion’s success key

metrics for business that run the social promotion (Dholakia,2011)

2. New customer acquisition efficacy

The capacity of the social promotion to reduce risk and make product’s

trial more attractive to novice customer ( Blattberg and Neslin 1990;

Lewis 2006).

3. Spend more than coupon value

Ability to generate spending among users beyond its face value

(Dholakia,2011).

4. Repeat full price purchase

Long term behavior of customer in which repeatly buying the product and

become firm relational’s customer ( Dholakia, 2006).

5. Coupon face value

Total value of product can be purchased through the offer.

6. Depth of price discount

Percentage of discount offered by the business in social promotions.

7. Redemption Duration

How long the customers has to redeem the purchased coupon before it’s

expired.

8. Employee satisfaction

Employee satisfaction with the promotions

9. Business

Firms, or companies that is targeted or has become Mbakdiskon’s

merchant

10. Costumers

The buyer of the business products

11. Merchant

Business that has become an affiliate partners of mbakdiskon that supplies

deal periodically.

12. Coupon redeemers

People who buy the coupon and redeem the coupon at merchant

CHAPTER 3

RESEARCH METHOD

This chapter explains how this research is conducted to measure the

profitability of social promotion in the case of Mbakdiskon.com toward its

merchants. The chapter would give details about how the writer selects the

sample and collects data, instrument, validity and reliability measurement.

3.1 Object, Time and Place

The object of the research are business that has experienced promotion

using social promotions of Mbakdiskon.com. The research will take place in DI

Yogyakarta provice as the operation area of Mbakdiskon.com , its businesses as

merchant partners and its users and will take time from March 2011 to December

2012.

3.2 Population and Sample Selection

3.2.1 Population

According to Cooper and Schindler (2011), a population is the elements about

which we wish to make some inferences. Population is the amount of elements

that are going to be explained in this research. The population of the research

covers all of merchant of Mbakdiskon.com which reach to 109 businesses at the

time the writer conduct the research.

Adopted from prior research, business that is included in our research are

the merchants of Mbakdiskon, which have the experience about promoting their

business through Mbakdiskon during the research period.

3.2.2 Sample Selection

Cooper and Schindler (2011) define sample as a group of cases, participants,

events, or records consisting of a portion of the target population that is carefully

selected to represent that population. Samples are taken from the business that

has been a merchant partner of Mbakdiskon.com from the timeframe selected and

also for the long run of the business because at the time the research is being

conducted the numbers of merchant is keep growing.

Sample size is calculated by using Taro Yamane formula. By using

Yamane’s Formula, the sample size should be 53 to get more reliable data. The

Yamane’s Formula is shown below:

n: sample size

N: total of population

d: precision which is 0.10

3.3 Data Collection Technique

Research design is the plan and structure of investigation so conceived as to

obtain answers to research questions (Cooper and Schindler, 2011). This research

is adopting the method of prior research conducted by Dholakia (2011).

To explore the research questions of this research, the writer uses two types of

information sources. They are primary data and secondary data.

3.3.1 Primary Data

According to Cooper and Schindler (2011), primary data are original

works of research or raw data without interpretations or pronouncements that

represent an official opinion or position.. The research collected official opinions

from the business in which according to the prior research (Dholakia,2011) it can

be officially delivered best by business owners or their sales managers and general

managers who is registered and reported the profitability of using Mbakdiskon

during their operation to the business.

The primary data of this research is collected through survey method and will be

administered by interview. The questionnaires are interviewed by the researcher

toward Mbakdiskon’s merchants. Questions on the questionnaire are adopted from

the previous research,

The questionnaire consists of questions that concern on:

1) The profitability of promoting in Mbakdiskon.com

2) The scale of new customer acquisition efficacy which is being brought by

promoting in Mbakdiskon.

3) The percentage of customers who spend more than coupon value at the

time of redemption

4) The percentage of customers who repeat at full price purchase at the

second visit after the time of redemption.

5) The scale of employee satisfactions during the time of redemption.

3.3.2 Secondary Data

Secondary data are the results of studies done by others and for different

purposes than the one for which the data being reviewed (Cooper and Schindler,

2011). Secondary data use primarily in the research is related to the social

promotions data that all the 109 merchants have ever placed in Mbakdiskon.com

website. The data is taken directly from the internal management data. The

researcher has the access and permission to the internal management to use the

data in purpose for the research. Internally, sales analysis summaries and investor

annual reports would be example of secondary data according to Cooper and

Schindler (2011) therefore internal promotions data is a secondary data.

Secondary data is used to find profitability drivers of social promotions which

consist of:

1) Coupon face value

2) Depth of price discount

3) Coupon redemption duration

All the terms above has been explained clearly in the operational definition in

previous chapter.

Other secondary data which is used is taken from academic journal and books to

support literature review and theoretical justifications of the research methods.

3.4 Research Instrument Scale

In collecting the primary data, the research will use rating scale type of

response. The rating scale of this research will use ten-point scale, percentage, and

yes or no questions. The research instrument is adopted from the prior research.

3.4.1 Ten-point scale

Ten point scale is used in investigating determinants of social promotions

profitability in new customer acquisition efficacy and employees satisfaction. The

respondent are asked to answer whether each statement that expresses either

favorable or unfavorable attitudes towards the object is effective or not. Each

response is given numerical score to reflect its degree of attitudinal favorableness.

The ten point scale is range from not at all effective to extremely effective.

3.4.2 Percentage

Respondents are asked to give percentage minimum 0% to maximum

100% in investigating determinants of social promotions profitability in spending

more than coupon value and purchase at second time in full price.

3.3.4 Yes or No Questions / Simple Category Scale

Respondent are asked to answer yes or no question in investigating

determinants of profitability of social promotions in Mbakdiskon which are

whether it is profitable or not? Whether the business will run another social

promotions or not? Whether the business will recommend Mbakdiskon to another

business or not?

3.5 Variable Measurement

This research is categorized as a causal study. The essential element of

causation is that A “produces” B or A “forces” B to occur (Cooper and Schindler,

2011). Described in the prior research by Dholakia in 2011, four hypothesis

tested in the research have impact relationship for example, new customer

acquisition efficacy, spending beyond coupon value and repeat full price purchase

will each have a positive impact on the groupon promotion’s profitability.

There is at least one independent variable and one dependent variable in a

causal relationship. Independent variable is the variable manipulated by the

researcher, thereby causing an effect or change on the dependent variable.

Meanwhile, dependent variable is the variable measure or predicted by the

researcher; expected to be affected by a manipulation of the independent variable

(Cooper and Schindler, 2011).

Thus, the independent variables and dependent variable for this research are:

Table 1

Dependent and Independent Variable

Hypothesis Dependent Variable Independent Variable

H1 Profitability of Social

Promotions

A. New Customer

Acquisition

Efficacy

B. Spend beyond

coupon value

C. repeat full-price

purchase

H2 New Customer Acquisition

Efficacy

A. Coupon face value

B. Depth of Price

Discount

C. Redemption

Duration

H3 Spend beyond coupon value A. Coupon face value

B. Depth of Price

Discount

C. Redemption

Duration

H4 Repeat Full Price Purchase Employee Satisfaction

3.5.1 Questionnaire development

In the development of the questionnaires used to measure each variable, the

research adopts the instrument that is used in prior research.

Profitability of social promotion

In the questionnaire the writer asks whether social promotions at Mbakdiskon is

profitable or not for the business using yes or no question.

New Customer Acquisition Efficacy

In the questionnaire the writer asks the respondent to define how effective

the social promotions of Mbakdiskon was in bringing new customer in 10

point scale question from not at all effective to extremely effective.


In the questionnaire the writer asks the respondent to define what

percentage of these customers spent more than coupon face value.

Repeat full price

In the questionnaire the writer asks the respondent to define what

percentage of these customers came back to the business at second time

and purchased its products and services at full price.


In the questionnaire the writer asks the respondent to define how satisfied

their employees were with the social promotions of Mbakdiskon using 10

point scale question from not at all satisfied to extremely satisfied

Repeat Promotion

In the questionnaire the writer asks about whether the respondent would

like to run another promotion in the future or not.

Recommendation

In the questionnaire the writer asks about whether the respondent would

like to run another promotion in the future or not.

3.6 Data Analysis Technique

The data obtained in this research is analyzed using quantitative method. In

business research, quantitative methodologies usually measure consumer

behavior, knowledge, opinion, and attitudes (Cooper and Schindler, 2011).

Quantitative research attempts precise measurement of something. It involves

gathering data that is absolute, such as numerical data, so that it can be

examined in as unbiased a manner as possible. Quantitative data often consist of

participant responses that are coded, categorized, and reduced to numbers so

that these data may be manipulated for statistical analysis (Cooper and

Schindler, 2011).

3.6.1 Hypothesis Testing

Hypothesis testing is used to determine the accuracy of the hypothesis

formulated prior to the collection of the sample. The variable to be tested in the

research are mix of continuous (face value, price discount depth, redemption

duration, employee satisfaction, new customer acquisition efficacy, spend

beyond coupon value, and repeat full-price purchase) and categorical

(promotion profitability, repeat promotion, and recommendation) variable.

Therefore the combination of linear and logistic regression is being used to

test the hypothesis. SPSS 13.0 program is used to develop the analysis. The

combination of both linear and logistic regression is described in the next

Table..

Table 2

Hypothesis Testing

Hypothesis Dependent

Variable

Independent Variable Regression used

H1 Profitability of

Social

Promotions

A. New

Customer

Acquisition

Efficacy

B. Spend

beyond

coupon

value

Logistic

regression

C. repeat full-

price

purchase

H2 New Customer

Acquisition

Efficacy

A. Coupon face

value

B. Depth of Price

Discount

C. Redemption

Duration

Linear

Regression

H3 Spend beyond

coupon value

A. Coupon face

value

B. Depth of Price

Discount

C. Redemption

Duration

Linear

Regression

H4 Repeat Full Price

Purchase

Employee Satisfaction Linear Regression

H5 A. Repeat

promo

tion

B. Recom

menda

tion

Profitability of Social

Promotions

Logistic

Regression

CHAPTER IV

RESULT AND DISCUSSION

In this chapter, the results of the statistical analysis are presented. The

data are the information collected from the respondents through questionnaire.

The statistical analyses are conducted to gain information about the respondents.

The general description of the research object is also shown in this chapter.

4.1 General Description of Mbakdiskon

Mbakdiskon is the pioneer of social commerce business in Yogyakarta

launched in March 2011. In 2013. The business model is taking form of the

business model of Groupon.com in America which has been discussed further in

literature review. Through the business model canvas point of view, Mbakdiskon

serves multi-sided platform customers which are businesses merchant, buyer or

user. Toward business, Mbakdiskon offers a zero risk and high impact marketing

strategy.

Comparing to the traditional marketing approach, the marketing model of

mbakdiskon offers more effective and efficient result. In traditional marketing

approach business often must paid a lot of money for placing an advertisement in

advance without knowing the impact in numbers on how much the audience that

has watched the advertisement will visit the business and purchase the business

product. When a business is making a social promotion through Mbakdiskon,

business won’t be incurred for advance payment for the promotion. The business

provider just place a deal and let Mbakdiskon do the coupon selling. Even

business can set a threshold in how much the coupon must be sold by Mbakdiskon

to activate the discount. Business only pays commission when Mbakdiskon is able

to sell the coupons within the amount of the threshold or it is usually termed as

when the deal is tipped.

As in the user or customer point of views Mbakdiskon is a social

commerce or social promotion websites that offers deals and discount three times

a week. It is different from the membercard discount system which offers small

discount that can be use each time. Mbakdiskon offers a limited time deals with

big discounts and with minimum numbers of buyers. The marketing model has

naturally brought what so called e-WOM or online world-of-mouth marketing

which especially can be seen in social media. Back to the business side, the WOM

effect of Mbakdiskon representing the high impact marketing the model can

stimulate. As explained before traditional marketing is inefficient in terms of

targeting the precise sales, it is also known to be ineffective to deliver a marketing

message today. People are switching the channel when advertisement is showing

on television. People start to believe more on their peer group than the traditional

advertisement. Through Mbakdiskon model limited time deal with big discount

and minimum number of buyers, customers are actively share the news socially

through online or offline means, and automatically business get the high WOM

impact from the business. It is can be observed through the high traffic activity in

Mbakdiskon social media which is twitter ( with 13,000 followers) and facebook

(with 5,000 fans)

4.1.1 Mbakdiskon’s Merchants

The business that place a deal at Mbakdiskon is called merchant , as

defined at operational definitions previously. The merchant of mbakdiskon is

various from several industries but Mbakdiskon’s merchant is serving only

services not goods at the time the research is being conducted although starting

from June 2013 Mbakdiskon is also targeting goods vendor as their deal supplies.

Mbakdiskon.com internal management has classified it into six big categories of

services that targettede as its merchants which are:

1) Culinary Services

The categories are including café, restaurants, bakery, coffee shop, etc.

2) Spa and Salon

3) Health Services

The categories are including fitness center, swimming pool, yoga,

dance, taebo, aerobic and health dance classes

4) Entertainment Services

The categories are including events, cinemas, etc.

5) Education Services

6) Photography Services

The categories are including language courses, and any other courses.

Total number of active merchants are 109 businesses from across

industries, 19 are from Spa and Salon, 65 Culinary Services, 7 Health services, 4

Entertainment services, 8 Photography services and 6 Education services. The

research is done to all the population which is all active merchants of mbakdiskon.

4.1.1.2 Merchant’s Deals at Mbakdiskon

Merchant deals at mbakdiskon.com are a limited time deal with big

discount and require certain no. of buyers to be activated. In mbakdiskon there is a

limit on the depth of price discount it should be more than 30%. Each deals will

be placed vary in time from 1 week to 1 month depends on the deal’s quality.

Deal’s quality defines by Mbakdiskon on how potential the deals would brought

no. of sales to Mbakdiskon or how potential the deals would leverage the brand

image of Mbakdiskon and brought more user. User in mbakdiskon itself usually

measured by no. of active buyers, no. of subscribers, no. of followers and no. of

fans which measured periodically by the internal management. Below are the

process of merchant in making deal transactions in Mbakdiskon.

a) Contact / Being contacted by Mbakdiskon marketing

b) Negotiation process

c) Compose deal details

d) Send materials to marketing

e) Marketing compose deals on website

f) Promotion will promote the deals to users.

g) At the end of the deals, Finance will make a recapitulation report on sales

and reported to Marketing

h) Marketing will report the sales to merchant.

i) Finance will send the money to merchant can be both by bank transfer or

cash.

4.2 Quantitative Analysis

The quantitative analysis used in the research are logistic regression to test

hypothesis 1, and linear regression to test hypothesis 1,2,3. The result can be seen

below.

4.2.1 Hypothesis 1

The dependent variable on tested in hypothesis 1 is profitability of social

promotions and the independent variables are new customer. Hypothesis 1 is

tested using logistic regression because the variables used are mix of categorical

and continuous variables. The result of the logistic regression is shown below:

Table 3

Variables in the Equation1

Independent

Variables

B S.E Wald df Sig. Exp(B) 95.0% C.I. for

EXP (B)

Lower Upper

New

Customer

Acquisition

(A)

0,356 0.902 0.156 1 0.693 1,427 0,244 8,354

Spend more

than coupon

value (B)

0,067 0,088 0,592 1 0,4421 1,070 0,901 1,207

Repeat

purchase in

0,176 0,079 4,979 1 0,026 1,192 1,022 1,392

full price (C)

Constant -

6,585

5,007 1,730 1 0,188 0,001

Source: Primary Data 2013, analyzed.

The logistic regression model used is logit model. In applications

such as these, it is standard to use 95% for the confidence coefficient.

4.2.1.1 Hypothesis 1 A

The hypothesis can be formulated as followed:

Ho1A: β1 = 0 New customer acquisition efficacy (X1A)

has no signifcant effect on profitability of

social promotions (Y).

Ha1A: β1 > 0 New customer acquisition efficacy (X1A)

has significant effect on profitability of

social promotions (Y).

Below are the criteria to accept or to reject the null hypothesis (Ho1):

If probability value (p) < α, Ho1A is rejected and Ha1A is

accepted. If probability value (p) ≥ α, Ho1A is accepted and Ha1A

is rejected. α = 5%.

Results revealed that p value is ≥ α, it means that new customer

acquisition efficacy has no significant effect on profitability of social promotions.

New customer acquisition efficacy has resulted as a positive predictor of

profitability of social promotions but has no significant effect on promotion

profitability. Therefore within 95% of confidence, Ho1A is accepted and Ha1A is

rejected.

The odd ratio (OR) interpretations of H1A is known by adding 1 unit of

new customer acquisition efficacy, the profitability of the business that run

promotion in Mbakdiskon will increase 1.427 times.

4.2.1.2 Hypothesis 1 B


Ho1B : Spending more than coupon value (X1B) has no

effect on profitability of social promotions (Y).

Ha1B :Spending more than coupon value (X1B) has

significant effect on profitability of social

promotions (Y).


If probability value (p) < α, Ho1B is rejected and Ha1A is

accepted. If probability value (p) ≥ α, Ho1B is accepted and Ha1A

is rejected.

Results revealed that p value is ≥ α , it means that spending more than

coupon value has no effect on profitability of social promotion. Spend more than

coupon value has resulted as positive predictor but has no significant effect of

profitability of social promotions. Therefore within 95% Ho1B is accepted and

Ha1B is rejected.

The odd ratio (OR) interpretations of H1B is known by adding 1 unit of

spend more than coupon value, the profitability of the business that run promotion

in Mbakdiskon will increase 1.070 times.

4.2.1.3 Hypothesis 1 C


Ho1C : Repeating full price purchase (X1B) has no

effect on profitability of social promotions (Y).

Ha1C : Repeating full price purchase (X1B) has

significant effect on profitability of social

promotions (Y).


If probability value (p) < α, Ho1B is rejected and Ha1A is

accepted. If probability value (p) ≥ α, Ho1B is accepted and Ha1A

is rejected.

Results revealed that p value is < α , it means that repeating full price

purchase has significant effect on profitability of social promotion. Repeating full

price purchase has resulted as positive predictor of profitability and has significant

effect of social promotions profitability. Therefore within 95% Ho1B is rejected

and Ha1A is accepted.

The odd ratio (OR) interpretations of H1B is by adding 1 unit of spend

more than coupon value, the profitability of the business that run promotion in

Mbakdiskon will increase 1.192 times.

4.2.2 Hypothesis 2

Hypothesis 2 is tested using linear regression. The result of the equation shows

below :

Table 4

Variables in the Equation 2

Independent

Variables

Unstandardized

Coefficient

Standardized

Coefficient

t Sig.

B Std.

Error

Beta

Constant 5,958 0.495 12,041 0.000

Face Value

Coupon

2.35-

E006

0.000 0.239 2.573 0.011

Redemption

Duration

-0,002 0,007 0,031 0,337 0,737

Depth of Price

Discount

0,026 0,010 0,233 2,504 0.014

Source : Primary Data 2013, analyzed.

Dependent variable for hypothesis 2 is new customer acquisition.

4.2.2.1 Hypothesis 2A

The linear regression equation for hypothesis 2A is:

Y2 = 5,958 + 2.35-E006X2A


Ho2A: β2A = 0 Face value coupon (X2A) has no effect on

New customer acquisition efficacy (Y).

Ha2A : β2 > 0 Face value coupon (X2A) has significant

effect on New customer acquisition

efficacy (Y).

Below are the criteria to accept or to reject the null hypothesis (Ho2A):

If the regression coefficient (β2A) has probability value (p) <

α, Ho2A is rejected and Ha2A is accepted. If the regression

coefficient (β2A) has probability value (p) ≥ α, Ho2A is

accepted and Ha2A is rejected.

Based on the analysis, the β2A is found positive as much as 0.239. It means that

face value of coupon is positive predictor on new customer acquisition efficacy.

Moreover, the effect face value coupon on new customer acquisition efficacy is

proved to be significant with the t = 2.573 and p = 0.011 which is less than α

(0.05). Therefore, Ha2A is accepted which means that the higher face value coupon,

the higher the new customer acquisition efficacy business will have.

4.2.2.2 Hypothesis 2B

The linear regression equation for hypothesis 2B is:

Y2 = 5,958 + -0,002X2B


Ho2B: β2B = 0 Redemption Duration (X2B) has no effect

on New customer acquisition efficacy

(Y2).

Ha2B : β2 > 0 Redemption Duration (X2B) has

significant effect on New customer

acquisition efficacy (Y2).

Below are the criteria to accept or to reject the null hypothesis (Ho2B):

If the regression coefficient (β2B) has probability value (p) <

α, Ho2B is rejected and Ha2B is accepted. If the regression

coefficient (β2B) has probability value (p) ≥ α, Ho2B is

accepted and Ha2B is rejected.

Based on the analysis, the β2B is found positive as much as 0.031. It means that

face value coupon is a positive predictor on new customer acquisition efficacy.

Moreover, the effect face value coupon on new customer acquisition efficacy is

proved to be not significant with the t = 0.037 and p = 0.737 which is more than α

(0.05). Therefore, Ho2B is accepted and Ha2B is rejected which means that the

higher redemption duration of the coupon it will not give significant impact to the

new customer acquisition efficacy business will have.

4.2.2.3 Hypothesis 2C


Y2 = 5,958 + 0,026X2C


Ho2C: β2C = 0 Depth of price discount (X2C) has no


efficacy (Y2).

Ha2C : β2C > 0 Depth of price discount (X2C) has



Below are the criteria to accept or to reject the null hypothesis (Ho2C):

If the regression coefficient (β2C) has probability value (p) <

α, Ho2C is rejected and Ha2C is accepted. If the regression

coefficient (β2C) has probability value (p) ≥ α, Ho2C is

accepted and Ha2C is rejected.

Based on the analysis, the β2C is found positive as much as 0.233. It means depth

of price discount is a positive predictor of new customer acquisition efficacy.

Moreover, the effect depth of price discount on new customer acquisition efficacy

is proved to be significant with the t = 2,504 and p = 0.014 which is more than α

(0.05). Therefore, Ho2C is rejected and Ha2C is accepted which means that the

higher the depth of price discount the higher the new customer acquisition

efficacy business will have.

4.2.3 Hypothesis 3


below :

Table 5

Variables in the Equation 3

Independent

Variables

Unstandardized

Coefficient

Standardized

Coefficient

t Sig.

B Std.

Error

Beta

Constant 6.167 7.494 0.823 0.412

Face Value Coupon

(A)

1.46E-

005

0.000 0.099 1.054 0.294

Redemption

Duration (B)

0,002 0,099 0,002 0.024 0.981

Depth of Price

Discount ( C)

0.505 0.156 0.303 3.231 0.002


Dependent variable for hypothesis 3 is spend more than coupon value.

4.2.3.1 Hypothesis 3A

The linear regression equation for hypothesis 3A is:

Y3 = 6.167+ 1.46E-005X3A


Ho3A: β3A = 0 Face value coupon (X3A) has no effect

spend more than coupon value (Y3).

Ha3A : β3A > 0 Face value coupon (X3A) has significant

effect spend more than coupon value (Y3).

Below are the criteria to accept or to reject the null hypothesis (Ho3A):

If the regression coefficient (β3A) has probability value (p) <

α, Ho3A is rejected and Ha3A is accepted. If the regression

coefficient (β3A) has probability value (p) ≥ α, Ho3A is

accepted and Ha3A is rejected.

Based on the analysis, the β3A is found positive as much as 0.099. It means that

there face value coupon is a positive predictor of spend more than coupon value.

Moreover, the effect face value coupon on spend more than coupon value is

proved to be not significant with the t = 1.054 and p = 0.294 which is more than α

(0.05). Therefore, Ho3A is accepted and Ha3A is rejected which means that the

higher face value coupon it will not take significant impact for the business to get

user that spends more than coupon value.

4.2.3.2 Hypothesis 3B


Y3 = 6.167 + 0,002X3B


Ho3B: β3B = 0 Redemption Duration (X3B) has no effect

on spend more than coupon value (Y3).

Ha3B : β3B> 0 Redemption Duration (X3B) has

significant effect on on spend more than

coupon value ( (Y3).

Below are the criteria to accept or to reject the null hypothesis (Ho3B):

If the regression coefficient (β3B) has probability value (p) <

α, Ho3B is rejected and Ha3B is accepted. If the regression

coefficient (β3B) has probability value (p) ≥ α, Ho3B is

accepted and Ha3B is rejected.

Based on the analysis, the β3B is found positive as much as 0.002. It means that

there redemption duration is a positive predictor of spend more than coupon

value.. Moreover, the effect redemption duration on spend more than coupon

value is proved to be not significant with the t = 0.024 and p = 0.981 which is

more than α (0.05). Therefore, Ho3B is accepted and Ha3B is rejected which means

that the higher redemption duration of the coupon it will not give significant

impact to the spend more than coupon value .

4.2.3.3 Hypothesis 3C

The linear regression equation for hypothesis 3C is:

Y2 = 5,958 + 0,026X3C


Ho3C: β3C = 0 Depth of price discount (X3C) has no


efficacy (Y3).

Ha3C : β3C > 0 Depth of price discount (X3C) has



Below are the criteria to accept or to reject the null hypothesis (Ho3C):

If the regression coefficient (β3C) has probability value (p) <

α, Ho3C is rejected and Ha3C is accepted. If the regression

coefficient (β3C) has probability value (p) ≥ α, Ho3C is

accepted and Ha3C is rejected.

Based on the analysis, the β3C is found positive as much as 0.303. It means that

depth of price discount is a positive predictor of new customer acquisition

efficacy. Moreover, the effect depth of price discount on new customer

acquisition efficacy is proved to be significant with the t = 3.231 and p = 0.02

which is more than α (0.05). Therefore, Ho3C is rejected and Ha3C is accepted which

means that the higher the depth of price discount the higher the new customer

acquisition efficacy business will have.

4.2.4 Hypothesis 4


below :

Table 6

Variables in Equation 4

Independent

Variables

Unstandardized

Coefficient

Standardized

Coefficient

t Sig.

B Std.

Error

Beta

Constant -5.179 4.737 -1.093 0.277

Employee

Satisfaction

7.999 0.651 0.766 12.286 0.000


Dependent variable for hypothesis 4 is repeat full price.

The linear regression equation for hypothesis 4 is:

Y4 = -5.179+ 7.999X4


Ho4 : β4 = 0 Employee satisfaction (X4) has no effect to

repeat purchase at full price (Y4).

Ha4 : β4 > 0 Employee satisfaction (X4) has significant

effect to repeat purchase at full price

(Y4).


If the regression coefficient (β4) has probability value (p) <

α, Ho4 is rejected and Ha4 is accepted. If the regression

coefficient (β4) has probability value (p) ≥ α, Ho4 is

accepted and Ha4 is rejected.

Based on the analysis, the β4 is found positive as much as 0.099. It means that

there is positive effect of employee satisfaction on repeat purchase at full price by

coupon redeemers. Moreover, the effect face value coupon on spend more than

coupon value is proved to be not significant with the t = 1.054 and p = 0.294

which is more than α (0.05). Therefore, Ho4 is rejected and Ha4 is accepted. To get

your customer repeat purchase to your product in full price after they use their

coupon, businesses must focus on how to retain their employee satisfaction during

the social promotions.

4.3 Discussion

4.3.1 Profitability of Social Promotions on new customer acquisition

efficacy, spend more than coupon value and repeat full price

purchasing.

Hypothesis 1 is tested using logistic regression of promotion profitability

toward new customer acquisition efficacy (A), spend more than coupon value (B)

and repeat purchase at full price (C). The result reveals that amongst three, only

repeat purchase at full price purchase ( p <0.05) is a significant predictor of

profitable social promotions. However the two other predictors which are new

customer acquisition efficacy and spending more than coupon value are not. Thus

H1C is supported by the data but H1A and H1B does not receive support. In

mbakdiskon’s case, it seems to be seen that businesses that run social promotions

or place a deal at mbakdiskon will have a profitable promotion when they have

high percentage of returning customers who will purchase their product in full

price other than getting new customer base or at the occasion of redemption they

will spend more than the coupon value. Compared to prior research discussion

(Dholakia,2011) , there are some differences in the result of hypothesis testing. In

prior research (Dholakia, 2011) , H1A and H1C does receive support from the

data while only H1B does not. Prior research samples are taking from businesss

that have run social promotions at Groupon.com in several cities in US. It appears

that for those businesss, getting new customer to purchase the coupon and receive

exposure in a new customer base seems to be sufficient to have a profitable social

promotion. For mbakdiskon merchants, it seems to be important when composing

and placing a deal in Mbakdiskon.com to focus on the goal to receive higher

percentage of returning customers and consider drivers that will support the goal.

4.3.2 New customer acquisition efficacy on Coupon face value, redemption

duration, and depth of price discount.

Hypothesis 2 was tested using linear regression of new customer

acquisition efficacy regressed on Mbakdiskon coupon face value, depth of price

discount, and redemption duration. Results revealed that coupon face value (β

= .239 , p <.05) and depth of price discount (β = .233 p <.05) were significant

predictors while redemption duration is not emerge as significant predictor. The

result provide support to H2A and H2B but H2C does not receive support.

Compared to prior research result, coupon face value and redemption duration is

resulted as significant predictors while depth of price discount is not. The result

offer practical guidance to the business when composing a deal in Mbakdiskon.

The result of the research is suggesting that business must offer a coupon with

higher face value and higher depth of discount to garner new customer acquisition

in order to make a profitable promotion.

4.5.3 Spend beyond coupon value on Coupon face value, redemption

duration, and depth of price discount.

Hypothesis 3 was tested using linear regression of the percentage of user

buying beyond the coupon value on same three predictors as Hypothesis 2. Result

revealed that in this case depth of price discount is a significant predictor (β

= .303, p <.05) and both coupon face value and redemption duration are not a

significant predictor. H3C receive support from the data while H3A and H3B are

not being supported. Compared to prior research (Dholakia, 2011), coupon face

value is resulted as negative predictor while depth of price discount is a positive

predictor. In prior research (Dholakia, 2011) H3A and H3B receive support from

the data while H3C is not supported since redemption duration is not significant.

In this research the managerial implications for the result is that to get user to

spend beyond coupon value higher depth of discount must be applied when

placing a deal in mbakdiskon.

4.5.4 Repeat Full Price Purchase on Employee Satisfaction

Hypothesis 4 was tested with linear regression of repeating full price

purchase on employee satisfaction. Result revealed a significant coefficient (β

= .766, p <.05). The result shows clear managerial implications which is to

maintain the employee satisfaction in order to engage long-term and repeat-

buying costumer for the long term.

CHAPTER V

CONCLUSION, LIMITATIONS, AND SUGGESTION

5.1 Conclusion

Based on the research described in the previous chapter, there are several

conclusions that can be taken

1. New customer acquisition efficacy has no significant effect on profitability

of social promotions. To some extent, geting new customer base is not

significant to make the promotion profitable for the business.

2. Spending beyond coupon value has no significant effect on profitability of

social promotions. Getting the coupon redeemers to spend beyond the

value of the coupon they redeem at the occasion of redemption is not

significantly bringing the social promotion profitable.

3. Repeating full price purchase has significant effect on profitability of

social promotions. It means the higher the coupon redeemers who come at

second time to repeat purchase the business product at full price, the more

profitable the social promotions of the business.

4. Coupon face value has significant effect on new customer acquisition

efficacy. The higher the coupon face value the more new customer can be

acquired through the social promotions at Mbakdiskon.

5. Redemption duration has no significant effect on new customer acquisition

efficacy. So the longer the redemption duration not necessarily significant

in getting the business new customer base when placing a deal or social

promotion at Mbakdiskon.

6. Depth of price discount has significant effect on new customer acquisition

efficacy. The higher the depth of discount the more new customer can be

acquired through the social promotions at Mbakdiskon.

7. Coupon face value has no significant effect on enforcing the coupon

redeemers to spend more than coupon value.

8. Redemption duration has no significant effect on enforcing the coupon

redeemers to spend more than coupon value.

9. Depth of price discount has significant effect on enforcing the coupon

redeemers to spend more than coupon value. The higher the depth of

discount the more the coupon redeemers will spend more than the coupon

value.

10. Employee satisfaction has significant effect on enforcing coupon

redeemers to come at second time and repurchase the same product in full

price.

5.2 Research Limitations

1. The research instrument is adopted from the prior research instrument and

for each variable is only measured by one measurement question in the

survey. There are two types of questions within the scale type that

normally its validity and reliability needs to be tested.

2. Though nonresponse bias is not occurred since the research can gather

100% response from the population, response-based error in which the

participant fails to give correct answer may occur. When choosing the

participant, the researcher try to minimize error by only meeting the

uniquely qualified participant that provide desired information, in this case

they are the business owner itself, general managers, or marketing

managers. Some small and medium enterprises that are included in the

population sometimes do not have a written record or report on some data

the researcher asked for example, percentage of returning coupon

redeemers that repurchase in full price. For some business such as spa,

salon, education, and health industry they record the coupon redeemers as

their new members and they give them member card that the coupon

redeemers can use in the next visit for extra benefit. From those

businesses, the participant can give us more appropriate answer. Since

most industries in the populations are in culinary industry and they do not

usually record the second time visit for each coupon redeemers, there is a

possibility of response-based error in the research.

5.3 Suggestion

1. For businesses that will do a social promotion in Mbakdiskon, to make

a profitable promotions it is suggested that the promotions must result

in repeat purchasing at second time visit by customers in full price.

And to get a repeat purchasing at second time visit by customers in full

price, the research suggest the business to keep their employee

satisfied. The higher the employee satisfaction, the more the customer

will come to the business for full price purchase, the more the business

will enjoy profitable promotions. Because in Mbakdiskon, most

industries that involve as merchants are from service business, and in

service business costumer consume the product in all the buying

process. And all the buying process in service business is delivered

mostly by the employee, even in the culinary business. One sample

case that has been known in the case of Mbakdiskon delivered by the

internal management is that there is one merchant which is a Italian

restaurant with a good quality of taste is not enjoying profitable

promotions because at the occasion of redemption their employee

don’t serve the coupon redeemers in the pleasant way. For example,

the coupon redeemers get smaller portion than regular buyers though is

not stated in their terms and condition, or the coupon redeemers must

wait for more than 30 minutes to get the food. Mbakdiskon has

collected many complains because of these cases, and after two

months the restaurant closed and change the brand which indicates the

unprofitable promotion. The case shows us though the quality of the

food is good known, but if the employee services failed it will still

cause unprofitable promotion. Therefore we suggest that at redemption

occasion, the business owners or marketing managers or general

managers must make a clear brief to their employees about the

program and the goal why the business must do the program and how

the employees must do to serve well to the coupon redeemers.

Additionally it is better if the business even set the same or higher

incentive based to the employees that relates to the coupon redeemers

satisfaction at the occasion of redemption.

2. The second suggestion is still related to the previous suggestion. To get

the profitable social promotion business must enforce the repeat full

price purchase from the coupon redeemers. We suggest that businesses

must also add incentives to keep the coupon redeemers connected to

the business and come back at second time other than the employee

satisfaction. It has been done by some businesses in spa and salon

industries by giving the coupon redeemers a member card and give

extra discount or freebies for them when they repurchase at second

visit and showing the member card.

3. To mbakdiskon.com the sustainability of social promotions can be an

issue because from the research from 15% of total population stated

that they have unprofitable promotions and most of them are from

culinary services. Meanwhile from 108 businesses, culinary services

are around 60% of all populations. Looking at the prior research, most

of culinary services stated they don’t want to run another social

promotions again because instead of experiencing profit they

experience loss from operation since in US Groupon case they must

incur 50% discount and from the revenue share to US Groupon is 50 :

50 so in conclusion it only remains 25% of selling price ( in food

business, there are some variable cost of serve they must cover

compared to other services business and according to prior research

averagely is 50%) to cover the cost of operation while because of the

popularity of US Groupon sometimes the coupon sold reach the

number of 3,000-5,000 pcs in which it requires the full capacity of the

business to serve. Mbakdiskon case is different, the minimal discount

is 30% and sometimes business can even switch into voucher model if

they cannot give more depth of discount. But within the natural of

culinary services anxiety in doing the social promotions model,

Mbakdiskon must be aware of the situations in the future because most

deal supplies in the pipeline came from culinary services.

4. To mbakdiskon.com, the research can be used by the sales and

marketing management to compose an approaching strategy to help

businesses in composing a deal in Mbakdiskon and suggest them some

points in after sales management, also in creating characteristics of

deal (face value, redemption duration, and depth of price discount).

5. To the next researcher, further research can be done by making

specific for each industries related because for each industry

profitability and cost structure can be different and therefore the

response of coupon redeemers can be differed and the profitability

drivers that significant can also be differed. The next researcher could

also create a prescription deal that is profitable for each industry in

composing the coupon face value, depth of price discount, and

redemption duration. This kind of research will be very useful for the

internal management of Mbakdiskon.

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List of Tables

Table 1...................................................................................................................11Table 2...................................................................................................................14Table 3...................................................................................................................46Table 4...................................................................................................................49Table 5...................................................................................................................55Table 6...................................................................................................................59Table 7...................................................................................................................63Table 8...................................................................................................................66

List of FiguresFigure 1....................................................................................................................6Figure 2..................................................................................................................17Figure 3..................................................................................................................18Figure 4..................................................................................................................29Figure 5..................................................................................................................34Figure 6..................................................................................................................35Figure 7..................................................................................................................37

Logistic Regression

Omnibus Tests of Model Coefficients

86.167 3 .000

86.167 3 .000

86.167 3 .000

Step

Block

Model

Step 1Chi-square df Sig.

Model Summary

11.155a .550 .926Step1

-2 Loglikelihood

Cox & SnellR Square

NagelkerkeR Square

Estimation terminated at iteration number 9 becauseparameter estimates changed by less than .001.

a.

Hosmer and Lemeshow Test

.436 6 .999Step1

Chi-square df Sig.

Classification Tablea

17 1 94.4

1 89 98.9

98.1

Observed0

1

Profitable

Overall Percentage

Step 10 1

Profitable PercentageCorrect

Predicted

The cut value is .500a.

Variables in the Equation

.356 .902 .156 1 .693 1.427 .244 8.354

.067 .088 .592 1 .442 1.070 .901 1.270

.176 .079 4.979 1 .026 1.192 1.022 1.392

-6.585 5.007 1.730 1 .188 .001

NewCostumerAC

SpendMore

RepeatFullPrice

Constant

Step1

a

B S.E. Wald df Sig. Exp(B) Lower Upper

95.0% C.I.for EXP(B)

Variable(s) entered on step 1: NewCostumerAC, SpendMore, RepeatFullPrice.a.

Linear Regression 1

Variables Entered/Removedb

Depth ofPriceDiscount,Face ValueCoupon ,Redemption Duration

a

. Enter

Model1

VariablesEntered

VariablesRemoved Method

All requested variables entered.a.

Dependent Variable: New Costumer ACb.

Model Summary

.343a .118 .092 1.200Model1

R R SquareAdjustedR Square

Std. Error ofthe Estimate

Predictors: (Constant), Depth of Price Discount, FaceValue Coupon , Redemption Duration

a.

ANOVAb

19.990 3 6.663 4.630 .004a

149.677 104 1.439

169.667 107

Regression

Residual

Total

Model1

Sum ofSquares df Mean Square F Sig.

Predictors: (Constant), Depth of Price Discount, Face Value Coupon , RedemptionDuration

a.

Dependent Variable: New Costumer ACb.

Coefficientsa

5.958 .495 12.041 .000

2.35E-006 .000 .239 2.573 .011

-.002 .007 -.031 -.337 .737

.026 .010 .233 2.504 .014

(Constant)

Face Value Coupon

Redemption Duration


Model1

B Std. Error

UnstandardizedCoefficients

Beta

StandardizedCoefficients

t Sig.

Dependent Variable: New Costumer ACa.

Linear Regression 2


Depth ofPriceDiscount,Face ValueCoupon ,Redemption Duration

a

. Enter

Model1

VariablesEntered



Dependent Variable: Spend Moreb.

Model Summary

.326a .106 .080 18.1702%Model1



Predictors: (Constant), Depth of Price Discount, FaceValue Coupon , Redemption Duration

a.

ANOVAb

4083.046 3 1361.015 4.122 .008a

34336.167 104 330.155

38419.213 107

Regression

Residual

Total

Model1


Predictors: (Constant), Depth of Price Discount, Face Value Coupon , RedemptionDuration

a.

Dependent Variable: Spend Moreb.

Coefficientsa

6.167 7.494 .823 .412

1.46E-005 .000 .099 1.054 .294

.002 .099 .002 .024 .981

.505 .156 .303 3.231 .002

(Constant)

Face Value Coupon

Redemption Duration


Model1

B Std. Error


Beta


t Sig.

Dependent Variable: Spend Morea.

Linear Regression 3


EmployeeSatisfaction

a . Enter

Model1

VariablesEntered



Dependent Variable: Repeat Full Priceb.

Model Summary

.766a .587 .584 16.2133%Model1



Predictors: (Constant), Employee Satisfactiona.

ANOVAb

39682.371 1 39682.371 150.958 .000a

27864.296 106 262.871

67546.667 107

Regression

Residual

Total

Model1


Predictors: (Constant), Employee Satisfactiona.

Dependent Variable: Repeat Full Priceb.

Coefficientsa

-5.179 4.737 -1.093 .277

7.999 .651 .766 12.286 .000

(Constant)


Model1

B Std. Error


Beta


t Sig.

Dependent Variable: Repeat Full Pricea.

Table 7

List of Groupon Clones in Indonesia

no Website Name URL

1 Fanesia http://www.fanesia.com

2 Disdus http://www.disdus.com

3 Super Best Deal http://superbestdeal.com/

4 OgahRugi (don't want to lose) http://voucher.ogahrugi.com

5 DealKeren.com http://www.dealkeren.com

6 EVoucher http://evoucher.co.id/

7 Valadoo http://www.valadoo.com

8 Lapar (Hungry) http://www.lapar.com

9 Grupay http://www.grupay.com/

10 LoveIndonesia http://www.loveindonesia.com/lovecoupon/

11 FashionPrivate http://www.fashionprivate.com/

12 Hemat http://www.hemat.com

13 groupon.biz http://www.groupon.biz/id_ID/lp/006/index_006.php

14 BeliBareng (Buy together) http://www.belibareng.com/

15 Kukuloba http://kukuloba.com/

16

DiskonKolektif (Collective

Discount) http://diskonkolektif.com/

17 SuperDeal http://superdeal.id.88db.com

18 Kriux (crunch sound) http://kriux.com/

19 BeliPromo (Buy promo) http://www.belipromo.co.id

http://www.belipromo.co.id/

http://superdeal.id.88db.com/

http://www.hemat.com/

http://www.lapar.com/

http://www.valadoo.com/

http://www.dealkeren.com/

http://voucher.ogahrugi.com/

http://www.disdus.com/

http://www.fanesia.com/

20

Lakuu.net (giLAKUUpon/crazy for

coupon) http://www.lakuu.net

21 xxx

22 Maiplay maiplay.com

23 Mall Voucher http://www.mallvoucher.com

24 Groupon.co.id http://www.groupon.co.id

25 IndoGroupon http://www.indogroupon.com/

26 Bom Diskon (Discount Bomb) http://www.bomdis.com/

27 AkuPlusKamu (Me plus you) http://www.akupluskamu.com

28 DiskopTop http://www.diskontop.com

29 Pesta Deal (Deal Party) http://pestadeal.com/

30 Sosialitas (socialite) http://sosialitas.com/

31 FreeVou http://www.freevou.com/

32 Outlet http://www.outlet.co.id/

33 GrupBuys Nawartrus http://grupbuys.nawartrus.com/

34 Dskon http://www.dskon.com

35 Detik Deals http://www.detikdeal.com

36 Mbak Diskon (Miss Discount) http://www.mbakdiskon.com

37 Kuponesia http://www.kuponesia.com/

38 Kriskros http://kriskros.com/

39 DealGoing http://id.dealgoing.com/

40 MurahRek http://www.murahrek.com/

41 Voucher Bali http://voucherbali.com/

42 Angetan http://angetan.com/

http://www.mbakdiskon.com/

http://www.detikdeal.com/

http://www.dskon.com/

http://www.diskontop.com/

http://www.akupluskamu.com/

http://www.groupon.co.id/

http://www.mallvoucher.com/

http://www.lakuu.net/

43 Diskoncom http://www.diskon.com/

Source: TechinAsia.org, 2012

Thesis Anggit MM Promotion Profitability Mbakdiskon

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