[yuvadam]

You are absolutely correct. But Groupon doesn't give that impression. The impression you get from a Groupon is "I got this really good deal for $10, why would I want to return for $20?"

In a classic ad the full price is stated upfront. You convert your customers on that, not on a completely unsustainable one-time deal.

[AznHisoka]

Yep, you are right. It dilutes your brand. It's a reason why most luxury brands like Prada and Louis Vuitton stay away from flash sites like Gilt and RueLaLa as well. It's also why Apple rarely has sales on iPods or iPhones.

By giving out discounts, you're training people to expect deals forever, and that's unsustainable.