More Trouble for Groupon in Japan - Again!

Incredibly, Groupon is in the news for problems again in Japan. Is there any other business in the world that is in the news once a week for screwing things up like Groupon is? I don't think so. This time, a client company claims that payments for the campaign from Groupon are too slow in coming and, if they keep up the deal with Groupon, they'll go bankrupt. So they unilaterally cancelled it.


There were also issues with people creating fake Groupon coupons somehow and Groupon was slow to react to the problem once the shop reported it. 

Once again, people who bought Groupon stuff feel cheated.
How long can this go on? Wim-folk can only get jilted
so many times until she's thru with you....

Some people have mentioned to me that they don't think Groupon can survive through  2012... Maybe they are right. Groupon screwed up big time in Japan at New Year's; then they messed up the apology; they totally blew it at the Super Bowl - which, in turn, created a huge blow back and "Boycott Groupon" movement on Facebook; they messed up Valentine's Day and they handle their logo and branding like rank amateurs.


All of which have appeared in the Japanese media.


Now, incredibly, they are in the news again. This time with a twist as a Groupon client company is complaining about Groupon and has cancelled a campaign mid-way as they say that they cannot afford to do business with Groupon and that Groupon's payment system and service is slow.


They say that, if this business deal continues with Groupon, they will go bankrupt, so they must cancel the deal.


Way to go Groupon. 


I wrote that Groupon's business model is not sustainable. Now, here is a client company going public with complaints about Groupon business practices in another collapsed deal with Groupon.


The story appears in today Sankei newspaper. The link is here:  The original article is only in Japanese, but I have made a quick summary translation for you here: 


(Basically the story is about) a shop in Tokyo's Kichijoji that sells "Tai-yaki" (Tai-yaki is a confection that is popular with children). The shop sold coupons through Groupon for the Tai-yaki. The regular price is ¥1,000. The Groupon price was ¥500. The shop sold 1,700 coupons in total. The coupons were valid until June 2011.

Tai-yaki

But on the 15th of the month (Feb. 2011) the shop announced on their own blog that they would discontinue the sale and cancel validation of Groupon coupons immediately. 


On the 16th of the month, the shop again announced on their blog, that Groupon had promised the shop "many repeat customers" but Groupon hasn't paid the shop the money, so the shop says that if these customers do come, they will go bankrupt.


Already Groupon sold coupons for 1,700 @ ¥500 each. Already 400 customers have used the coupons, yet Groupon has only paid the shop for 120 customers. The shop says that they cannot do business with Groupon and, if more customers come to use the coupons, they will go bankrupt as they are unable to pay for ingredients and overhead. 


The shop says that unless Groupon pays the money, they cannot afford to pay for supplies and materials. So the campaign was cancelled immediately. 


The shop also complained to Groupon that there were fake coupons circulating and said that Groupon was very slow to react so the shop was unable to control the situation.


Sankei Newspaper tried to contact Groupon Japan but was unable to get comment.


Groupon Japan is the company that was responsible for the New Year's "Oseichi" food that sold deliveries of food that were completely different than what was advertised.


Well, that's the story for you. I wanted to be the first person in the world to get this story out for you English speakers. When Groupon collects the money for all the tickets they sold, why don't they pay immediately to the client?

Gee, I do remember hearing the lame old excuse of "the check is in the mail" but in 2011, I guess that would mean electronic mail so you have to wonder what's taking so long?


Will you be doing business with Groupon as a client or customer? The lesson to be learned is, "Caveat Emptor" - Let the buyer beware! In Groupon's case, I reckon that means "Let the buyer and client beware!"




Japanese story from Sankei Newspaper:


http://headlines.yahoo.co.jp/hl?a=20110221-00000540-san-soci

　クーポンが使用停止となったのは、東京・吉祥寺のたい焼き店「たいやき鯛勝」。同店は昨年１２月下旬、グルーポンでたい焼きなど１０００円分が購入できるクーポンを５０％引きの５００円で販売。約１７００枚が発行された。利用期間は今年６月までだった。

　しかし、同店は今月１５日、公式ブログでクーポンの使用停止を発表。１６日の同ブログでは「グルーポンを継続することは当店の宣伝、リピーターの獲得どころか、存続さえ危ぶまれる状態に陥ってしまうと判断し、今回の中止という苦渋の決断をしました」としている。

同店は産経新聞の取材に対し「すでに４００枚使用されたが、グルーポンからはまだ６万円しか入金されていない。うちの規模の店ではクーポンが使用される前に利益を受け取らないと、材料費が出せない」と話している。クーポン持参者は最近でも同店を訪れるが、使用できない事情を説明し、謝罪しているという。

同店によると、グルーポン側は同クーポン購入者のうち、未使用クーポンの全額返金を行うことにしているという。

また、同ブログでは「（問題は）クーポンの偽造から始まりました。その後のグルーポンの対応が遅く、よくありませんでした」とも記載。同店では「同じ番号のクーポンのコピーを利用したお客さまがいたので、グルーポンに報告した」と話している。

産経新聞は２１日午前、グルーポンを運営する「グルーポン・ジャパン」（東京都渋谷区）に取材を依頼。同社の要請により電子メールで連絡したが、２１日午後２時時点で返事は来ていない。

グルーポンをめぐっては今年１月、横浜市の販売会社「外食文化研究所」が同サイトで販売したお節料理が「見本と違う」などと苦情が続出する問題が発生。その後、お節料理の８品について見本の表示と異なっていたことが、グルーポンの公式サイトで明らかになっている。

Thanks to Yuka Rogers for help with translation.

Groupon Image and Branding is Horrendous

To continue with my examining just how inept Groupon is, here's another thing I found that makes me wonder about this companies management. This company is so messed up. They should be paying me to point out their screw ups... But no. I point out these mistakes as a free service because I am such a wonderful person.


Clients and customers do not associate with Groupon because of Groupon image or branding. Customers use it for discounts. Clients use it to try to get promotion. 


I don't think the deal for clients is good and I think Groupon is not a sustainable business model.


Anyway, unlike a company like Apple, which has a great brand and people want to associate with it, even if it is more expensive, Groupon has a poor and weak image. 


Today, here's a short look at a problem with their branding and examples of just how poor the Groupon Brand is handled and managed.


Here is Groupon internal rules on logo use (I received effective as of the date of writing of this article):

CLICK ON IMAGE FOR FULL SIZE

CLICK ON IMAGE FOR FULL SIZE

You'll notice that the rules for use of this logo are very strict (well, at least they are supposed to be). A company logo is not only the lettering, it includes the the outline. In Groupon's case, they use a quadrilateral box that has the top and the right side at 90 degree right angles. 

The problem with Groupon in Japan is that it is a new company so the name is still not fully recognized and Groupon management is not competent enough to consider branding consistency. 

In the second box, they specifically state, "Using the "G" as one unit, the logo must appear at least 1 unit away from all other branding, copy or graphics in the layout"

In the third image down you'll see that the rules specifically state that "the mark cannot be altered."

In the forth box, you'll see that they state that legibility must be maintained.

Yet, they greatly altered their logo in the week leading up to Valentine's day. It was changed so much so that it is hardly recognizable. There are at least three of Groupon's very own rules broken in this one ad.

Notice that there is no quadrilateral box at all and they have also broken rule #2 by committing the cardinal sin of putting something - which is laughably unrecognizable - on top of their "G". Not to mention the silly heart mark where the "O" should be.

Well, a heart mark instead of an "O"? Great. Groupon certainly scores big points in the originality department!

What an amateurish bunch of mistakes this ad is! 

Google, Yahoo, Coca-Cola or Amazon might get away with this in Japan. They are huge and have been here for years. Groupon is new; already has a bad reputation in Japan and has poor market penetration.   

Breaking the logo rules when you are fresh into a new market is a huge mistake and a Marketing 101 "No! No!"

Here's their latest ad that I just pulled off the Internet. Once again, the background quadrilateral box is missing. They also deleted the registered trademark logo that is supposed to appear at the top right hand side of the lettering.

As an aside, I will also say that I think this is a bad ad for two other reasons:

1) Hamburgers are cheap food. No one in their right mind is going to sign up to get a $2.00 discount on a hamburger in Tokyo when it costs you $4.00 for a round trip ticket on a Tokyo subway

2) In my opinion, this is a misleading ad like the New Year's fiasco... I doubt that this an actual photo of an actual hamburger they are selling in Tokyo. 

Here's another one that violates rule #2 above about "Clearing Space." The rule states; "Using the 'G' as one unit, the logo must appear at least one unit away from all other branding, copy, or graphics in the layout."This means that there must be at least one unit of space above the logo. But, as you can see, they have it flush with the top of the ad:

Yet again, another violation of the "Clearing Space" rule:

It clearly states in rule #2 that there cannot be any lettering within

one unit space (the same size as the "G" in Groupon, yet

here again, they violated this simple rule. Is there anyone

even working in Branding at that company?

Seriously, someone there is trying to screw things up

intentionally. How else to explain this logo consistently

being used differently?

I don't think Groupon can survive with the constant mistakes they make. Like here, here, here (to name just the huge screw ups within the last 2 weeks!)

Besides, the copy cats are already here and they are numerous.

Just to reinforce to you that what I have written is true, here is a Groupon ad I just found a second ago. Once again, the branding is inconsistent. Different from the shoe ad above, it is inconsistent (yet still in violation of spacing rules).

In this one, they have the quadrilateral box. In the one with the hamburger, they don't. The "shrimp" ad also includes the registered trademark logo. The hamburger ad doesn't. Why?

Really. These are such basic mistakes.

Japanese text too close to Groupon logo at top right (March 7, 2011)

Groupon. You fools! You should have taken the $5 billion dollars from Google when you had the chance. As soon as Facebook, Google and, say, Mixi, make their own group discount service, you are dead.

I expect Groupon to crash. They can't even handle basic things like their branding and marketing? 

Who could expect them to do great things like a Google or Apple? I can't.

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Is the Boycott Groupon Movement Anti-Business? No.

Some people have written and accused me of being anti-business for railing on Groupon. I don't think so at all. Here's my rebuttal to people when they say that Groupon intent was not to commit fraud or intentionally rip off people and that I shouldn't complain:

I think Groupon intent, in this case, is important, but what's more important is how, after a screwup is found, how they handle the problem. The CEO of Groupon fails to understand his customers feelings and, on top of that, is perceived as having a a bad attitude... For that, should Groupon be out of business? 

If people were asking the government to intervene, I would be against that. No one is asking for government intervention to stop him. And, if he does fail (doubtful) no one is stopping him from learning a lesson and trying again.

The people complaining have every right to do so and are completely in line with Libertarian ideals.

Products, services, and understanding peoples wants and needs are all integral parts of running a company, They are not mutually exclusive.

If people complained about your products you'd better listen to them and make them happy or you take the risk of creating ill will and these people today, thanks to the Internet, have to power to organize. Ignore these people at your peril. 

One need to only look at Hosni Mubarak for evidence of what that can lead to.

Here's a simple example of what I think about any free association movement or boycott (which I believe is completely in line with Libertarian ideals): 

1950. A restaurant opens up. The food is bad. The restrooms are dirty. Customers complain. The owner takes a bad attitude and fails to apologize and fails to promise try to do better next time... He says things like, "Other restaurants are worse" (maybe so, but not the point). Word of mouth spreads and the shop gets a bad reputation...... From that, perhaps the restaurant gets no customers then goes out of business... Hopefully, the owner might learn a lesson and try again - next time with some humility and more accommodation to CUSTOMER concerns.

2011. A restaurant opens up. The food is bad. The restrooms are dirty. Customers complain. The owner takes a bad attitude and fails to apologize and try to do better next time...He says things like, "Other restaurants are worse" (maybe so, but not the point). Word of mouth spread and gets around the way word gets around in 2011: people use the Internet....... From that, perhaps the shop gets a bad reputation. From that, no customers then goes out of business... Hopefully, the might learn a lesson and try again - next time with some humility and more accommodation to CUSTOMER concerns.

I'm sure there were people who wrote letters in defense of McDonald's when there were (still are) boycotts. Did anyone write letters of defense of toys with lead paint when parents considered boycotts of Mattel due to lead in children's toys from China (until the US government intervened and made them illegal)? Perhaps these are outrageous comparisons, but I think they prove my point. 

People can defend Groupon, but to criticize other people from trying to freely associate and create a voluntary group to get a company to understand customer anger and frustration - in order to get that company to react to their concerns - is a disservice to the free market and Libertarian ideals, no? 

Facebook's Boycott Groupon Logo

I would be right there with the defenders of Groupon if the boycotters were trying to get the government to ban Groupon or control their business.

No. Calling for a free association, a voluntary boycott of Groupon in order to get them to understand people's unhappiness and concerns is not anti-free market. It is the free market in its purist form.

Customers deserve to have their concerns addressed and

their voices heard. They also have the right of free association and freedom of speech. True tenants of the free market and a free society. 


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Boycott Groupon?

You'll see, Groupon keeps pissing people off with their marketing so people have started boycotting Groupon. 


As I wrote yesterday, it looks like Groupon screwed up again and people are mightily pissed off about them making fun of serious environmental issues and human oppression.


Funny that, eh? People get angry when you make fun of rape, pillage, torture or the end of the world.


Even more than the ad that I didn't like where Groupon makes fun of Amazon rain forest deforestation, it seems those clowns actually ran an ad that made light of China's oppression of the people of Tibet. The ad featured Timothy Hutton and he said, "The people of Tibet are in trouble. But they still whip up an amazing fish curry!" 


It then went on to promote Groupon. 


Maybe the curry is tasty. This ad campaign isn't. What were they thinking?

Ha! Ha! Ha! Yeah. Hilarious right? Young girls raped and old men and women getting whipped and beaten by jack-booted Chinese security forces in Tibet! Hilarious.... I can't stop laughing! Yeah, and did you hear the screamer about genocide, rape and murder in Palestine too? The people at Groupon must be laughing their ass off at that one! Look for that to be their next ad campaign.


What a bunch of fools these Groupon people must be. I always compare them to Amway, but, in this case, they are much worse. At least the Amway folks were polite... Sort of.


The CEO of Groupon, Andrew Mason, must really be a bozo. I imagine that he is a typical rich-kid that has no idea of how the world actually works and has never really had a job. When you read about Groupon's consistent mess ups and his idiotic apologies, you wonder what planet this guy is living on.


Dear readers can do as they please, but I am going to boycott Groupon and never use their service.... My official boycott starts today.


I've written before that Groupon's business model is unsustainable, Mish Shedlock pointed out that he thinks that Groupon will regret not taking $4 billion (USD) from Google, and, judging from the negative press that's come out these last few days (again) I predict Groupon is about to get "pooped-on" by a lot of people.


I imagine that, in the worst case, if they can, the people who work with Groupon CEO Andrew Mason in upper management must be planning a Coup De Etat against that guy. He has no humility and he has no common sense. The guy's video's reek of insincerity. His handling of these screw ups must be really making people worry about where his head is at. I know I'd be thinking, "How do we get rid of this clown?"


He's lucky that Groupon is not a publicly traded company. If they were, they would have given him the boot by now.


But, I'll bet they can't show him the door and this will really hurt Groupon. Google would never offer them $4 billion USD today. They messed up big time. Funny that... Groupon and "messed up big time" are becoming synonymous.


Andrew, your companies "parody" videos are not funny nor are they endearing to the people.


The Wall Street Journal writes in "Is Groupon the real Super Bowl loser?": 


The ads triggered so much criticism that Groupon's founder, Andrew Mason, went online not to apologize for them but to explain them. He said the Super Bowl commercials that are truly offensive are ones built around "the crass objectification of women." Groupon's ads didn't do that.


Earth to Andy, earth to Andy. Hello? "Objectification of women? You are talking about ads for the Superbowl that Joe Sixpack is watching.... You know, a program that features a war of the gridiron and girls in mini skirts screaming "Go Team!" or "Drink Busweiser!" You know, T & A is what 90% of the viewers (who just so happen to be guys) want to see.


Doh!


Or, Andy, have you never watched the Superbowl like regular American Joe Sixpack has?... (Actually, judging from how you fouled this one up too, it wouldn't surprise me if you said that you never have).

At least Homer is cute & funny... And loved by the people.

Groupon CEO Andrew Mason continually insists upon showing his lack of class, humility and understanding by making these foolish "apology" videos. In fact, this time, for these offensive Super Bowl videos, he didn't apologize. He is actually so daft that he went on TV to explain them.


Come on, Andy, how dumb can you be? Everyone knows a joke isn't funny if it has to be explained. 


Groupon is not funny. Nor is it an endearing brand. Not a good combination for success. 


Boycott Groupon? It's on!  


UPDATE:


There is a Facebook "Boycott Groupon" group that just started. Join here.
http://www.facebook.com/pages/Boycott-Groupon/169470236433287?v=wall

UPDATE TWO:


Interestingly, after I wrote this blog I Google searched, "Boycott Groupon." I found 290,000 results. Seems there are many people who think like me. Nice work, Andy.


I thought this boycott pretty much summed it all up.   


Thanks to Mark Davis in Florida!


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