TheBakersfieldCalifornian.com

Like a lot of small business owners, fitness center owner Sandra Quigley doesn't have much of an advertising budget, so a few weeks ago she started experimenting with a hot new trend in marketing.

It's called collective buying, and it works like this: consumers are notified of a deal of the day (or sometimes week or month) via a website or email. To get the deal, shoppers have to purchase a gift certificate, but the price is deeply discounted, often more than half off the true value of the product or service.

There are no upfront costs to featured businesses. Group buying websites typically make their money by taking a cut of proceeds from sales. If the offer works as intended, merchants can afford to offer dramatic discounts because a huge volume of new customers more than makes up the difference in price.

Quigley, owner of Balera Fitness Studio & Spa, offered a $129 aerobics class for up to 12 people for $69 last week on PriceTrader.com, and three people bought gift certificates almost immediately.

"For some perspective, I usually get six to eight new customers a month," she said.

Quigley figures collective buying is worth it for someone like her, because her costs are fixed no matter how many people respond. "I pay the teacher the same thing whether there's one person in the class or eight," she said. "If I were selling tangible goods, I'd have to watch how much was going out the door."

Collective buying is flooding into Bakersfield. Groupon, a national company based in Chicago, just launched here. Living Social, based in Washington, D.C., says Bakersfield deals are "coming soon." And several local media either have websites up or will shortly. The Bakersfield Californian is jumping into the fray with a new Daily Deals site scheduled to go live in mid-September.

That's a lot of players in a market that isn't awash with the level of retail and entertainment that allows group buying to thrive in larger cities. Whether Bakersfield can sustain them all is an open question.

"I think, like anything else, eventually there's going to be saturation and it will narrow down and somebody will emerge the leader," said Stephanie Chandler, an author and business consultant based in Gold River, Calif.

She's putting her money on Groupon, "because they've been doing it the longest, and they're good at it."

Groupon started in 2008 in Chicago and has spread like wildfire across the United States, Canada and Europe. The company said it began considering Bakersfield based on feedback from residents here, especially commuters who could get bargains near work in Los Angeles but not at home.

"We've done all the big cities already, but more and more of our customers were wanting Groupon who don't live in big cities," said consumer marketing manager Julie Mossler. "It's not fair to assume everyone in California is only in Los Angeles or San Francisco."

Mossler said the company scoped Bakersfield out before deciding to hire sales reps here (she wouldn't say how many) and found plenty of justification for branching out. "There's a ton of stuff to do out there. It's lovely," Mossler said.

The Californian will have its hands full taking on that particular Goliath, but John Wells, the paper's vice president of sales, circulation, marketing and operations, insists it will be able to compete.

The newspaper knows Bakersfield far better than an out-of-state company and has the ability to promote its daily offering on its front page, Wells said.

Daily Deals won't cannibalize the newspaper's print edition advertisers because it mostly will draw companies that can't afford print ads, he added. "This is a way to offer a very low-cost marketing solution that's great for small businesses."

Mossler politely sniffed at what she called "copy cats," and said Groupon has an edge with "unparalleled" customer service, including a no questions asked return policy.

Groupon isn't the only big company vying for Bakersfield hearts and minds. Living Social, which is in 59 markets in three countries, has set its sites on the region, too.

The relative lack of big retailers here doesn't frighten Living Social, said spokeswoman Korina Buhler. "We really pride ourselves on working with local mom and pop shops," she said. "We're in Cedar Rapids, which isn't a very big market. We can make it work."

The concentration of competitors isn't worrisome, either, Buhler insists. "We see a lot of merchants work with multiple group buying sites. There's plenty to go around," she said.

Dave McElwain is local sales manager of American General Media's RadioStore.com, which is affiliated with the local ESPN sports radio station.

He said he's confident he'll be able to retain his foothold here because the bulk of his shoppers listen to the station. "The online portion is just sort of the extended family of the radio audience," McElwain said. "Ninety percent of our shoppers heard about us on the radio."

Those shoppers have built in loyalty, and merchants tend to be more comfortable working with local companies, McElwain said.

The familiarity of a local name is important, said Lana Fain, zoo manager of California Living Museum, which has used RadioStore.com to promote ticket sales and programming.

"There are so many different options right now, you just need to be cautious who you're dealing with," she said.

The upside of all this activity, of course, is that Bakersfield will have access to a tidal wave of bargains at a time when budget conscious families are cutting back on shopping and entertainment.

In that sense, consumers win no matter the outcome.

"It's a low-risk way to try something new," Groupon's Mossler said. "Maybe you've never had sushi and wouldn't eat it before, but you would at a 50 percent discount."

Merchants just need to be ready for the onslaught of customers, the Californian's Wells said.

"You'd better make sure, before you do this, that you have the capacity to meet the demand. If customers sign on for something and you can't deliver, you're not going to make a good first impression and probably won't get them back," he said.