Shaping the Market Offering
The online market for travel services will reach $63 billion within a few years, and Priceline.com aims to capture a significant share; already, it is high on the top-ten list of travel Web sites. After a brief period of diversification into name-your-price sales of groceries and gasoline, the company has refocused on its core travel and financial services offerings, including airline tickets, hotel rooms, rental cars, and mortgage loans. The company guarantees that a Priceline.com mortgage is the "lowest-cost loan on the market" and backs this up by paying $300 to any customer who finds a better price.
Visit the Cybrary and other Internet sources, to see how the Priceline system works. At the Priceline website, follow the link marked "How it works" to read about the name-your-price process. Then return to the home page and follow several of the links promoting discounted offerings.
1. Define price sensitivity. Provide relevant examples.
Price sensitivity is when a customer is willing to trade off dollars against product or service benefits. Some factors that influence price sensitivity are:
Customer perception of uniqueness
Factors Influencing Price Sensitivity
Customer perception of uniqueness
Awareness / availability of substitutes
Difficulty of direct comparison
Total expenditure (i.e., relative value in bundle)
Shared cost (e.g., employer pays part)
Sunk investments / switching costs
Price -quality inferences
Ability of customer to carry inventory
Price-sensitivity decreases if the person choosing the product isn't the person paying for the product Example: Business travelers are fewer prices sensitive because their employers are footing the bill. Customers are most price sensitive that cost a lot or are bought frequently. They are less price-sensitive to low cost item or items they buy infrequently. They are also less when the price is only a small part of the total cost obtaining, operating and servicig the product over its lifetime.
2. What
Visit the Cybrary and other Internet sources, to see how the Priceline system works. At the Priceline website, follow the link marked "How it works" to read about the name-your-price process. Then return to the home page and follow several of the links promoting discounted offerings.
1. Define price sensitivity. Provide relevant examples.
Price sensitivity is when a customer is willing to trade off dollars against product or service benefits. Some factors that influence price sensitivity are:
Customer perception of uniqueness
Factors Influencing Price Sensitivity
Customer perception of uniqueness
Awareness / availability of substitutes
Difficulty of direct comparison
Total expenditure (i.e., relative value in bundle)
Shared cost (e.g., employer pays part)
Sunk investments / switching costs
Price -quality inferences
Ability of customer to carry inventory
Price-sensitivity decreases if the person choosing the product isn't the person paying for the product Example: Business travelers are fewer prices sensitive because their employers are footing the bill. Customers are most price sensitive that cost a lot or are bought frequently. They are less price-sensitive to low cost item or items they buy infrequently. They are also less when the price is only a small part of the total cost obtaining, operating and servicig the product over its lifetime.
2. What