Question

Groupon uses classified ads for rental apartments. How does this fit with its business model?

E-Commerce Assignment Please give good detailed answer

Answer 1

Rental apartments advertised in classified by business companies are not in the ownership of the advertiser, unlike advertisement by owners who are only interested in their property to be let out and not in the business.

It is an Agency-Based and Commission based business model wherein the owner of the business are connected to the dealers in such business providing them all the details of the property to be let out.

Agency based business model depending on the nature and ownership of such business and Commission based business model based on the nature of income the businessman earns on successfully letting out a property.

If the company has ready takers for such a property in the client base they will inquire about their requirement and set up the deal and in return they will get a commission on percentage basis.However if the is not getting enough demand for rental it cannot be kept idle for a long period of time, in such a case a classified ad is used to know whether there are any takers for the property on rent.

This type of marketing is used to  gain an overview of the demand in the market on a greater scale.Information can be collected from the amount of inquires made by the customers and thus gain an access to such information which can be beneficial in the area of real estate based on the requirement of the customer, facilities and amenities required in a property.

A business model of rental apartments by classifieds also attracts a specific segment of persons thus can also be treated as a target consumer based model and can be

• Business-to-Business (B2B) in case of sub letting of the property
• Business-to-Consumer (B2C) in case of concluded contract with the consumer