Priceline.com pioneered a "name your own price" reverse auction model for travel reservations. While initially promising, Priceline struggled for many years to become profitable as it expanded into new industries. By 2003-2004, Priceline refocused on its core travel business and adopted additional retail booking options. These strategic changes generated profits of $30-35 million in 2004-2005. However, Priceline faces significant competition and uncertainty from industry trends, raising questions about how long its current success can be sustained.
[IT1004: tutorial 2] Priceline Case Presentation By Group AKelvin Tay
Priceline case presentation, prepared by Grace Ong, Ian Gobardja, Chooi Wei Ling, Jolene Lim & Dorlisa Song.
Uploaded with kind permission from the abovementioned authors.
Priceline.com's business model of allowing customers to name their own price for travel services like flights and hotels has found success. However, the company's attempts to expand this model to other industries like groceries and gasoline failed. The reasons for this include the perishable nature of travel inventory which incentivizes discounts, whereas grocery and gas products have fixed costs that must be recouped. Additionally, travel suppliers have more pricing flexibility than brands in other industries. While Priceline has had success in travel, applying their model directly to other commoditized industries proved challenging.
Priceline.com pioneered a "name your own price" business model in the travel industry. Its core components include allowing customers to name their own price for hotel rooms and other travel services, earning revenue from transaction and booking fees, and targeting the market opportunity of budget-conscious travelers and vendors with excess inventory. While it faced challenges expanding beyond its core travel business, Priceline has succeeded by refocusing on online travel reservations, developing new technology like mobile apps, and gaining a competitive advantage through flexible pricing strategies.
Priceline.com launched in 1998 as one of the leading online travel booking portals. It introduced a new business model called "Name Your Own Price" that allows customers to save money by trading flexibility for lower prices. Priceline's model connects buyers and sellers to facilitate transactions, but it is not a direct supplier. Key elements include hiding supplier and provider names as well as using powerful technology. The model was unprofitable at first but became profitable after adapting over several years.
Priceline's core business model includes its reverse auction pricing system, which allows users to find discounted travel items by placing bids. It also acts as a middleman by providing price quotes from major hotels, airlines, and rental car companies for tickets, hotel rooms, and car rentals. Since turning a profit in 2003, Priceline has succeeded through its reverse auction model and expansion into Europe and Asia to protect itself from volatility in the US market.
This document discusses Priceline's business model. It describes how Priceline operates as an intermediary between suppliers (hotels, airlines) and consumers by allowing consumers to "name their own price" for travel services. Priceline earns transaction fees from suppliers when consumer offers are accepted. The model was initially unprofitable but became profitable in the early 2000s as the company expanded internationally and integrated additional travel booking services. The document analyzes factors that affect the sustainability of Priceline's business model, such as competition from other online travel sites and flexibility in adapting to new technologies and market conditions.
This document provides an overview of a group presentation on Priceline.com. It includes an introduction which outlines the objectives and methodology of the study. The contents section lists topics such as e-commerce, the evolution of Priceline.com, its business model, products/services, and comparisons to competitors. Charts on Priceline group revenue from 2013-2016 show increasing annual profits. The document appears to serve as an outline for a presentation analyzing the online travel company Priceline.com.
[IT1004: tutorial 2] Priceline Case Presentation By Group AKelvin Tay
Priceline case presentation, prepared by Grace Ong, Ian Gobardja, Chooi Wei Ling, Jolene Lim & Dorlisa Song.
Uploaded with kind permission from the abovementioned authors.
Priceline.com's business model of allowing customers to name their own price for travel services like flights and hotels has found success. However, the company's attempts to expand this model to other industries like groceries and gasoline failed. The reasons for this include the perishable nature of travel inventory which incentivizes discounts, whereas grocery and gas products have fixed costs that must be recouped. Additionally, travel suppliers have more pricing flexibility than brands in other industries. While Priceline has had success in travel, applying their model directly to other commoditized industries proved challenging.
Priceline.com pioneered a "name your own price" business model in the travel industry. Its core components include allowing customers to name their own price for hotel rooms and other travel services, earning revenue from transaction and booking fees, and targeting the market opportunity of budget-conscious travelers and vendors with excess inventory. While it faced challenges expanding beyond its core travel business, Priceline has succeeded by refocusing on online travel reservations, developing new technology like mobile apps, and gaining a competitive advantage through flexible pricing strategies.
Priceline.com launched in 1998 as one of the leading online travel booking portals. It introduced a new business model called "Name Your Own Price" that allows customers to save money by trading flexibility for lower prices. Priceline's model connects buyers and sellers to facilitate transactions, but it is not a direct supplier. Key elements include hiding supplier and provider names as well as using powerful technology. The model was unprofitable at first but became profitable after adapting over several years.
Priceline's core business model includes its reverse auction pricing system, which allows users to find discounted travel items by placing bids. It also acts as a middleman by providing price quotes from major hotels, airlines, and rental car companies for tickets, hotel rooms, and car rentals. Since turning a profit in 2003, Priceline has succeeded through its reverse auction model and expansion into Europe and Asia to protect itself from volatility in the US market.
This document discusses Priceline's business model. It describes how Priceline operates as an intermediary between suppliers (hotels, airlines) and consumers by allowing consumers to "name their own price" for travel services. Priceline earns transaction fees from suppliers when consumer offers are accepted. The model was initially unprofitable but became profitable in the early 2000s as the company expanded internationally and integrated additional travel booking services. The document analyzes factors that affect the sustainability of Priceline's business model, such as competition from other online travel sites and flexibility in adapting to new technologies and market conditions.
This document provides an overview of a group presentation on Priceline.com. It includes an introduction which outlines the objectives and methodology of the study. The contents section lists topics such as e-commerce, the evolution of Priceline.com, its business model, products/services, and comparisons to competitors. Charts on Priceline group revenue from 2013-2016 show increasing annual profits. The document appears to serve as an outline for a presentation analyzing the online travel company Priceline.com.
This document provides an overview of Priceline's business model. Priceline is an online travel company that was founded in 1997 and allows customers to "name their own price" for travel services. It operates both a merchant model, where it buys travel products and resells them at a markup, and an agency model, where travel providers pay Priceline a fee to sell their inventory. Priceline sees growth opportunities in international markets like Asia and Latin America. While it faces competition from other online travel agencies, its competitive advantages include offering low prices, reliability, and being a first mover in the online travel industry.
This document provides an overview and discussion of key themes in the beauty industry from an investment firm's perspective. The beauty industry remains an attractive consumer packaged goods sector with strong growth opportunities emerging from premiumization trends, expansion in emerging markets, and disruption from new entrants. Traditional retailers with both online and physical presences have an advantage over online-only players due to consumers' preference for in-store beauty discovery and trials. Consolidation continues as companies seek scale and new capabilities. Online replenishment represents a significant opportunity for beauty product sales.
Lightspeed provides a platform for retailers and ecommerce businesses. The platform includes features like ecommerce storefronts, order management, inventory management, fulfillment, customer relationship management, and analytics. Lightspeed has helped over 2,000 customers across various industries.
The document discusses strategies for developing an effective digital marketing campaign for an auto dealership group. It recommends creating a network of targeted microsites, landing pages, and deep links connected to the primary websites to generate leads at a lower cost. Metrics like impressions, clicks, leads, and sales should be closely tracked and campaigns optimized to continuously lower the cost per lead.
Brand Optimization Service offered by MobiWebMedia, Boutique Web Marketing Agency.
Discover how you can become more visible online and grow your business with brand optimization.
- The document discusses the emergence and growth of digitally native vertical brands (DNVBs), which are e-commerce focused brands that control their own distribution and product selection.
- DNVBs have grown as physical retail traffic declines, e-commerce increases, and the population of "digital natives" who prefer online shopping rises. Many DNVBs focus on apparel and fashion.
- Traditional retailers are adapting to consumers' shift to online shopping through omni-channel strategies, while investors can capture higher margins by investing in DNVBs, which avoid physical store costs. The document provides several examples of DNVBs and analysis of their funding and valuations.
ComCap is a boutique investment bank focused on commerce and capital markets. It hosted a guide for attendees of the Shoptalk 2016 conference, providing an overview of selected operating companies, investors, and profiles. The guide contained confidential information about analytics, e-commerce, and retail technology companies attending the event, including their services, funding amounts, and key facts. Attendees could contact ComCap representatives for additional information or to be included in future guides.
Portals need to better understand consumers and provide more valuable leads to customers. By tracking consumer behavior across sites, portals can build profiles on consumers' interests and needs. Portals can then score and grade leads based on factors like pages viewed and share more qualified leads with customers. Customers want leads they can cost-effectively convert to sales and measure through their CRM systems. Portals aim to deliver more customized experiences for consumers and transparent metrics to help customers optimize marketing spend and understand lead values.
This document discusses the evolution of Amazon's business model over time from 1994 to 2014. It begins by focusing on selling electronics and expanding into other product categories, then evolves to allow third-party sellers and develop new services like Amazon Web Services. The document advocates that utilities could similarly transform their business model by developing a platform that aggregates distributed energy resources and allows multiple buyers and sellers to interact, as Amazon did with its marketplace. This would provide new revenue streams and ensure utilities remain competitive in the changing energy industry. Some challenges to implementing this new model are also discussed.
NRF 2017 call to action - Personalization Overview Nov'16Uren Dhanani
ComCap is hosting ongoing dialogs between strategic partners and private companies at the NRF 2017 conference in January. As a premier boutique investment bank focused on commerce and capital, ComCap differentiates by bringing large firm techniques to emerging models and having worldwide coverage and relationships. The document provides ComCap's contact information and lists recommended strategic investors in personalization technologies for companies to contact to discuss partnerships.
ComCap is hosting ongoing dialogs between strategic partners and private companies at the NRF 2017 conference in January. As an investment bank focused on commerce and capital, ComCap connects companies in sectors like ecommerce, B2B SaaS, payments, and marketplaces. The document provides ComCap's contact information and recommends several strategic investors in personalization technologies to discuss opportunities in personalization and B2B SaaS.
The document discusses strategies and tactics for winning complex accounts. It defines a complex account as one involving multiple decision makers from different roles. Key strategies include developing a long-term focus on the account rather than individual sales, account mapping to understand needs and opportunities, and leveraging relationships through ongoing marketing and communication. Tactics covered include social media, publications, events, and customer relationship management tools to build name awareness and foster strong customer relationships.
Matthias Sala, Cofounder & CEO of Gbanga presents at the M-Days 2011 in Frankfurt how location-based business models could work and what location-based games do in that space.
ComCap: Digital Marketing Overview 2016Uren Dhanani
SteelHouse is a data-driven marketing technology company that provides advertising solutions for brands, agencies and e-commerce marketers. It offers a remarketing platform and advertising delivery system to consistently display messages across channels. SteelHouse has raised $65.2 million and has over 160 employees.
The document discusses the major players in the online car industry, including lead generators that pass customer inquiries to dealers, direct sellers that allow customers to buy cars online directly, and hybrid models. It provides examples of companies that use each model. The document also discusses how these companies attract customers, provide value, and try to retain customers in the emerging online car buying market.
This document provides an overview of selected companies and investors attending the IRCE 2016 conference. It includes profiles of ecommerce platform companies PrestaShop and Tipalti, describing their capabilities, customers, and key facts. Additionally, it outlines the ecommerce and digital retail investor landscape in both the US and internationally. Confidential company and financial information is presented throughout the document for Mr. Aron Bohlig.
Can omni-channel communication & marketing automation go hand-in-hand?Akhil Mittal
Omni-channel marketing is not new––but executing it can be tricky, at best. Realizing the benefits of omni-channel requires using the right platforms, integrating them effectively, and managing campaigns across multiple platforms.
Read how a premier real estate investment trust (REIT) and investment company leveraged the combined power of marketing automation and context marketing. You’ll learn how to personalize experiences across multiple channels, to connect with customers wherever they are on their journeys.
Digital Marketing Solutions for all Industry TypesBeven.Digital
I want to talk to you today about the importance of being found online! The old coffee shop talks where friends got together and chatted about things like their experiences are a way of the past. The new word of mouth is online!
Statistics have shown that 85% of all buying decisions are made online these days and that in itself is the most important reason why your business needs to be found online. Have you ever heard of the Zero Moment of Truth? It refers to a typical customer's buying cycle as indicated here by this slide. It starts with Interest like for example a customer of yours might have/need [PRODUCT OR SERVICE]. They do some Research to see where the best place in the area is to go. The locate your business and come down to get treated so the Purchase. Finally, they comment on their overall Experience of their visit. Our goal is to help address the issues with your business's “Virtual Doorway.” Here are the pillars of your virtual doorway we want to look at. Listings, Reputation, Social, Website, and Search.
The document discusses how the smartphone revolution has changed industries and consumer behavior. It notes that mobile allows constant connectivity and that decisions are often made before entering stores due to online research. Charts show how the "zero moment of truth" has shifted to earlier in the consumer purchase process. The rest of the document outlines services from DigitalStartup to help businesses manage their online presence and reputation through listing distribution, review monitoring and response, social media marketing and more.
Increase Direct Business and Brand Awareness with Next Generation Interactive Travel Shopping.
Merging local knowledge, publishing, advertising and bookings in a seamless conversation
Curious about the future of hospitality marketing and distribution? This presentation to HSMAI's Washington, DC chapter explains why the future of hospitality marketing for independent hotels and brands alike starts this year.
Yield management, also known as revenue management, is the process of understanding consumer behavior to maximize profits from fixed resources like hotel rooms or airline seats. It involves selling the right resources to the right customer at the right time for the right price. The vacation rental industry can benefit from yield management by increasing occupancy rates, annual revenue, and market share while minimizing last minute bookings. Implementing yield management requires gathering data on past occupancy and rates, understanding guest categories, and using alternative marketing channels to sell excess inventory.
This document provides an overview of Priceline's business model. Priceline is an online travel company that was founded in 1997 and allows customers to "name their own price" for travel services. It operates both a merchant model, where it buys travel products and resells them at a markup, and an agency model, where travel providers pay Priceline a fee to sell their inventory. Priceline sees growth opportunities in international markets like Asia and Latin America. While it faces competition from other online travel agencies, its competitive advantages include offering low prices, reliability, and being a first mover in the online travel industry.
This document provides an overview and discussion of key themes in the beauty industry from an investment firm's perspective. The beauty industry remains an attractive consumer packaged goods sector with strong growth opportunities emerging from premiumization trends, expansion in emerging markets, and disruption from new entrants. Traditional retailers with both online and physical presences have an advantage over online-only players due to consumers' preference for in-store beauty discovery and trials. Consolidation continues as companies seek scale and new capabilities. Online replenishment represents a significant opportunity for beauty product sales.
Lightspeed provides a platform for retailers and ecommerce businesses. The platform includes features like ecommerce storefronts, order management, inventory management, fulfillment, customer relationship management, and analytics. Lightspeed has helped over 2,000 customers across various industries.
The document discusses strategies for developing an effective digital marketing campaign for an auto dealership group. It recommends creating a network of targeted microsites, landing pages, and deep links connected to the primary websites to generate leads at a lower cost. Metrics like impressions, clicks, leads, and sales should be closely tracked and campaigns optimized to continuously lower the cost per lead.
Brand Optimization Service offered by MobiWebMedia, Boutique Web Marketing Agency.
Discover how you can become more visible online and grow your business with brand optimization.
- The document discusses the emergence and growth of digitally native vertical brands (DNVBs), which are e-commerce focused brands that control their own distribution and product selection.
- DNVBs have grown as physical retail traffic declines, e-commerce increases, and the population of "digital natives" who prefer online shopping rises. Many DNVBs focus on apparel and fashion.
- Traditional retailers are adapting to consumers' shift to online shopping through omni-channel strategies, while investors can capture higher margins by investing in DNVBs, which avoid physical store costs. The document provides several examples of DNVBs and analysis of their funding and valuations.
ComCap is a boutique investment bank focused on commerce and capital markets. It hosted a guide for attendees of the Shoptalk 2016 conference, providing an overview of selected operating companies, investors, and profiles. The guide contained confidential information about analytics, e-commerce, and retail technology companies attending the event, including their services, funding amounts, and key facts. Attendees could contact ComCap representatives for additional information or to be included in future guides.
Portals need to better understand consumers and provide more valuable leads to customers. By tracking consumer behavior across sites, portals can build profiles on consumers' interests and needs. Portals can then score and grade leads based on factors like pages viewed and share more qualified leads with customers. Customers want leads they can cost-effectively convert to sales and measure through their CRM systems. Portals aim to deliver more customized experiences for consumers and transparent metrics to help customers optimize marketing spend and understand lead values.
This document discusses the evolution of Amazon's business model over time from 1994 to 2014. It begins by focusing on selling electronics and expanding into other product categories, then evolves to allow third-party sellers and develop new services like Amazon Web Services. The document advocates that utilities could similarly transform their business model by developing a platform that aggregates distributed energy resources and allows multiple buyers and sellers to interact, as Amazon did with its marketplace. This would provide new revenue streams and ensure utilities remain competitive in the changing energy industry. Some challenges to implementing this new model are also discussed.
NRF 2017 call to action - Personalization Overview Nov'16Uren Dhanani
ComCap is hosting ongoing dialogs between strategic partners and private companies at the NRF 2017 conference in January. As a premier boutique investment bank focused on commerce and capital, ComCap differentiates by bringing large firm techniques to emerging models and having worldwide coverage and relationships. The document provides ComCap's contact information and lists recommended strategic investors in personalization technologies for companies to contact to discuss partnerships.
ComCap is hosting ongoing dialogs between strategic partners and private companies at the NRF 2017 conference in January. As an investment bank focused on commerce and capital, ComCap connects companies in sectors like ecommerce, B2B SaaS, payments, and marketplaces. The document provides ComCap's contact information and recommends several strategic investors in personalization technologies to discuss opportunities in personalization and B2B SaaS.
The document discusses strategies and tactics for winning complex accounts. It defines a complex account as one involving multiple decision makers from different roles. Key strategies include developing a long-term focus on the account rather than individual sales, account mapping to understand needs and opportunities, and leveraging relationships through ongoing marketing and communication. Tactics covered include social media, publications, events, and customer relationship management tools to build name awareness and foster strong customer relationships.
Matthias Sala, Cofounder & CEO of Gbanga presents at the M-Days 2011 in Frankfurt how location-based business models could work and what location-based games do in that space.
ComCap: Digital Marketing Overview 2016Uren Dhanani
SteelHouse is a data-driven marketing technology company that provides advertising solutions for brands, agencies and e-commerce marketers. It offers a remarketing platform and advertising delivery system to consistently display messages across channels. SteelHouse has raised $65.2 million and has over 160 employees.
The document discusses the major players in the online car industry, including lead generators that pass customer inquiries to dealers, direct sellers that allow customers to buy cars online directly, and hybrid models. It provides examples of companies that use each model. The document also discusses how these companies attract customers, provide value, and try to retain customers in the emerging online car buying market.
This document provides an overview of selected companies and investors attending the IRCE 2016 conference. It includes profiles of ecommerce platform companies PrestaShop and Tipalti, describing their capabilities, customers, and key facts. Additionally, it outlines the ecommerce and digital retail investor landscape in both the US and internationally. Confidential company and financial information is presented throughout the document for Mr. Aron Bohlig.
Can omni-channel communication & marketing automation go hand-in-hand?Akhil Mittal
Omni-channel marketing is not new––but executing it can be tricky, at best. Realizing the benefits of omni-channel requires using the right platforms, integrating them effectively, and managing campaigns across multiple platforms.
Read how a premier real estate investment trust (REIT) and investment company leveraged the combined power of marketing automation and context marketing. You’ll learn how to personalize experiences across multiple channels, to connect with customers wherever they are on their journeys.
Digital Marketing Solutions for all Industry TypesBeven.Digital
I want to talk to you today about the importance of being found online! The old coffee shop talks where friends got together and chatted about things like their experiences are a way of the past. The new word of mouth is online!
Statistics have shown that 85% of all buying decisions are made online these days and that in itself is the most important reason why your business needs to be found online. Have you ever heard of the Zero Moment of Truth? It refers to a typical customer's buying cycle as indicated here by this slide. It starts with Interest like for example a customer of yours might have/need [PRODUCT OR SERVICE]. They do some Research to see where the best place in the area is to go. The locate your business and come down to get treated so the Purchase. Finally, they comment on their overall Experience of their visit. Our goal is to help address the issues with your business's “Virtual Doorway.” Here are the pillars of your virtual doorway we want to look at. Listings, Reputation, Social, Website, and Search.
The document discusses how the smartphone revolution has changed industries and consumer behavior. It notes that mobile allows constant connectivity and that decisions are often made before entering stores due to online research. Charts show how the "zero moment of truth" has shifted to earlier in the consumer purchase process. The rest of the document outlines services from DigitalStartup to help businesses manage their online presence and reputation through listing distribution, review monitoring and response, social media marketing and more.
Increase Direct Business and Brand Awareness with Next Generation Interactive Travel Shopping.
Merging local knowledge, publishing, advertising and bookings in a seamless conversation
Curious about the future of hospitality marketing and distribution? This presentation to HSMAI's Washington, DC chapter explains why the future of hospitality marketing for independent hotels and brands alike starts this year.
Yield management, also known as revenue management, is the process of understanding consumer behavior to maximize profits from fixed resources like hotel rooms or airline seats. It involves selling the right resources to the right customer at the right time for the right price. The vacation rental industry can benefit from yield management by increasing occupancy rates, annual revenue, and market share while minimizing last minute bookings. Implementing yield management requires gathering data on past occupancy and rates, understanding guest categories, and using alternative marketing channels to sell excess inventory.
Company Overview Hotels.com was co-founded by Robert Diener an.docxdonnajames55
Company Overview
Hotels.com was co-founded by Robert Diener and David Litman in 1991. Hotels.com has been purchaced by Expedia but still operates as an independant entityand continues to provide its customers with their unique hotel and motel booking service. Hotels.com is one of the leading online accommodation booking website with properties ranging from international and all-inclusive resorts, to local favorites and bed & breakfasts. Hotels.com also provide specific apps for mobile phones and tablets that allow customers to book on the go with access to “20,000 last minute deals”.
Company History
Founded in 1991 by Robert B. Diener and David S. Litman, Hotels.com was first known as Hotel Reservations Network until the domain name Hotels.com was purchased in 2002 for ~$11m and assigned as the company name. [1][2] In 1995 Hotels.com was one of the first companies to use the Internet to offer their services on a global network. In February of 2000, Hotels.com went public with great success and ranked in the top 1% of public companies until 2003. In 2003, as Hotels.com was valued at $5.5 billion, founders David Litman and Robert Deiner sold their portion of Hotels.com to InterActiveCorp. The founders then left of the company later in 2004.[1]
Legal Issues
In 2007, Lewkowicz and Judith Smith of Oakland filed a class-action lawsuit in Alameda County Superior Court, claiming that Hotels.com did not guarantee wheelchair-accessible rooms. In 2009 the non-profit, DRA (Disability Rights Advocates), reached a settlement with the two major online travel service companies, Hotels.com and Expedia.com. Under the settlement both companies agreed to improve reservation services for travelers with disabilities by adding new features to their websites to improve accommodations for those with disabilities such as, wheelchair accessible showers, braille signage, and assistive telecommunications.[3] [4]
Market
Combined with its parent company Expedia.com, Hotels.com had 40% of USA’s OTA (Online Travel Agent) bookings in 2014. Hotels.com’s major competitors in the USA are Priceline, Orbitz Worldwide, and Travelocity. These four brands had 95% of the US market share in 2014 due to each of these brands owning a number of online room booking services. [5]
There are growing forces of newly entered companies in OTA market that have already become a threat to existing OTAs. Airbnb, founded in 2008, has rental listings of over two million spaces in 34,000 cities in 190 countries, serving 60 million customers to date. Airbnb differentiated its service from traditional OTAs by offering listings of privately owned apartment rooms and homes among other unique options. Airbnb has won popularity among younger generations by offering the experience of homestay accommodations with strict policy to protect guest and host participants. Though it is not publicly disclosed, Airbnb is estimated to of had an average revenue growth of 173% for a one year period between 2011 and .
1) The document discusses trends in hotel booking, specifically the rise of hotel-owned websites like RoomKey.com that allow customers to book directly with hotels. These sites are gaining market share from traditional third-party online travel agencies.
2) Hotel-owned sites offer financial benefits to hotels by eliminating fees charged by third-party agencies. They also give hotels more control over pricing and marketing.
3) While computer-based booking will remain dominant, mobile apps are growing. The balance of bookings between hotel sites and third-party agencies will depend on which options best meet customer needs and preferences.
1) The document discusses trends in hotel booking, specifically the rise of hotel-owned websites like RoomKey.com that allow customers to book directly with hotels. These sites are gaining market share from traditional third-party online travel agencies.
2) Hotel-owned sites offer financial benefits to hotels by eliminating fees charged by third-party sites and allowing hotels to set competitive prices. They also provide a more simplified booking experience for customers.
3) In the future, the document predicts a gradual shift in the balance of online bookings towards hotel-owned sites as they provide more cost-effective options for hotels, though third-party sites will still maintain a portion of the market.
Priceline was an early e-commerce company that changed the traditional seller-buyer model by allowing buyers to name their maximum price for a product. It found instant success online by using celebrity endorsements and incentives on affiliated websites. The company's model of buyers naming their price was easily scalable to other industries and was later copied by competitors like Expedia, though Priceline risked losing customers without strategies to educate buyers and maintain customer relationships.
The document discusses how the airline industry is undergoing a transformation from traditional distribution models to a new model of "travel retailing". Key points:
- Deregulation of global distribution systems and increased online competition have stimulated an evolution in how airlines market and sell their products.
- New tools are emerging that will give airlines more insights into customer shopping behavior, ability to offer exclusive fares to preferred partners, and launch targeted promotional campaigns.
- These changes will reshape how airlines approach revenue management, distribution, and marketing by taking more cues from effective retailing practices in other industries.
Meta-search engines provide consumers a time-saving solution for searching for the best deal, through aggregation of multiple hotel, flight and other travel sources into one website. With new competitors leveraging data at the top of the funnel, meta-search engines turn to new services and monetization strategies.
This document summarizes research on using online advertising networks as an alternative to advertising directly on automotive information sites to reach in-market auto buyers. It presents data from five auto advertising campaigns that showed networks can deliver cost-effective results by starting broadly and optimizing over time. Key findings include:
- The majority of auto site visitors are not ready to purchase within 3 months, and in-market buyers spend less than 1% of online time on these sites.
- Campaigns that optimized placements based on performance outperformed those targeting only automotive categories.
- Categories assumed to reach car buyers, like automotive sites, often underperformed while unexpected categories like careers and money/finance performed best.
Cost Effective Reach In Market Car Buyers By Value ClickRalph Paglia
This document summarizes research on using online advertising networks as an alternative to advertising directly on automotive information sites to reach in-market auto buyers. It presents data from five auto advertising campaigns that showed networks can deliver cost-effective results by starting broadly and optimizing over time. Key findings include:
- The majority of auto site visitors are not ready to purchase within 3 months, and in-market buyers spend less than 1% of online time on these sites.
- Campaigns that optimized placements based on performance outperformed those targeting only automotive categories.
- Categories assumed to reach car buyers, like automotive sites, often underperformed while unexpected categories like careers and money/finance performed best.
This document summarizes research on using online advertising networks as an alternative to advertising directly on automotive information sites to reach in-market auto buyers. It presents data from five auto advertising campaigns that showed networks can deliver auto buyers cost-effectively by starting with a broad network and optimizing over time based on performance. Specifically, the document finds that assumed top-performing categories like automotive sites are not always best and optimization outperforms targeting only likely sites. Regional campaign data revealed unexpected high-performing categories beyond automotive like careers, dating, and money/finance.
This document summarizes research on using online advertising networks as an alternative to advertising directly on automotive information sites to reach in-market auto buyers. It presents data from five auto advertising campaigns that showed networks can deliver cost-effective results by starting broadly and optimizing over time. Key findings include:
- The majority of auto site visitors are not ready to purchase within 3 months, and in-market buyers spend less than 1% of online time on these sites.
- Campaigns that optimized placements based on performance outperformed those targeting only automotive categories.
- Categories assumed to reach car buyers, like automotive sites, often underperformed while unexpected categories like careers and money/finance performed best.
Cost Effective Reach In Market Car Buyers By Value ClickRalph Paglia
This document summarizes research on using online advertising networks as an alternative to advertising directly on automotive information sites to reach in-market auto buyers. It presents data from five auto advertising campaigns that showed networks can deliver cost-effective results by starting broadly and optimizing over time. Key findings include:
- The majority of auto site visitors are not ready to purchase within 3 months, and in-market buyers spend less than 1% of online time on these sites.
- Campaigns that optimized placements based on performance outperformed those targeting only automotive categories.
- Categories assumed to reach car buyers, like automotive sites, often underperformed while unexpected categories like careers and money/finance performed best.
Digital Activation & Traveler Loyalty ProgramsJay Rein
This document discusses how travel loyalty programs, especially for airlines and hotels, are changing in the digital era. Traditional transaction-based rewards are becoming outdated as travelers expect more personalized interactions. Both industries have evolved their frequent flyer/guest programs over 35+ years from simple recognition programs to complex systems incorporating multiple metrics for accumulating and redeeming rewards. However, current programs may not be effectively driving loyalty as travelers have more options. The future requires seamlessly integrating online and mobile platforms to better understand travelers and provide customized, valuable experiences and services.
This document discusses Google's monetization solutions for websites. It provides advice on developing quality content, implementing an effective monetization strategy, and focusing on mobile as most users now start activities on smartphones. The document also promotes Google AdSense and AdMob as easy ways to monetize websites and mobile apps through ad placements. Specific strategies are suggested for different verticals like ecommerce to target non-buyers and generate revenue from ad impressions and clicks.
The digital travel revolution poses a threat to the hotel industry as new digital competitors are poised to disrupt distribution and capture significant market value. Large digital players have demonstrated the ability to rapidly gain scale in targeted segments. Winners will be those that solve customer hassles along the entire guest journey and build interactional and collaborative relationships rather than purely transactional ones. To respond, hotel companies must rethink distribution's role, build a holistic operating model, define segment and channel strategies, develop a comprehensive revenue agenda, and measure performance using RevPARD.
Coming to Terms with Insurance Aggregators: Global lessons for carriersAccenture Insurance
Insurers have conflicting views and divergent strategies regarding aggregators. Many claim they add little if any value to both customers and carriers. Some believe they should be spurned, to prevent them gaining a foothold in new markets. Others think that getting onboard early will give them a more dominant position, resulting in a strong flow of new sales. Accenture believes they cannot be ignored. This report examines the likely future impact of aggregators, and proposes four key building blocks for an effective aggregator strategy.
Loyalty and subscription in Travel & HospitalityI Meet Hotel
Bidroom organizes I Meet Hotel, a global conference connecting hoteliers to the future of hospitality. Since the COVID-19 outbreak, we have to take our conferences online.
I Meet Hotel conducted a survey with 1000s of hotels to design a webinar more suited for hoteliers. One of the subjects that were highlighted were Loyalty and Subscription in Travel & Hospitality;
In this session, we will cover Loyalty and subscription in Travel & Hospitality.
This webinar will feature;
Mark Ross-Smith, CEO @ Loyalty Data Co
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1. GHANA INSTITUTE OF MANAGEMENT AND PUBLIC ADMINISTRATION
Subject: Electronic Commerce
Examiner: James Antwi
Date: February 24, 2012
Answer all the questions at the end of the Case described.
Priceline.com
And the search for a business model that works
Priceline.com is one of the web’s most well known companies. Its name your own price reverse auction
pricing system is a unique business model that uses the model that creates the information sharing and
communications power of the internet to create a new way of pricing products and services. At p.com,
consumers can enter a bid for ravel, hotel, rental cars, and even home financing. Priceline queries its vendors
(airline, hotel, and financial services firms) to see if anyone will accept the bid. P offers a compelling value
proposition to customers, allowing them to save money by trading off flexibility about brands, product
features, and/or sellers in return for lower prices. Vendors also can gain additional revenue by selling
products they might not otherwise be able to sell by accepting below-retail price offers, without disrupting
their existing distribution channels or retail pricing structure. Priceline is an example of using the web to
achieve efficient price discrimination: changing some customers much more than others for the same
products. In 2005, Priceline sold 2.8million airline tickets, 11.7million hotel room nights, and 5.8miillion
rental car days. Sounds like a promising e-commerce story.
The original vision of Priceline’s founder Jay Walker was called “demand collection”. Walker poured
millions into the concept of a one – stop shopping center for goods and services from trucks, toothpaste, to
vacation travel. But for most of its travel, Priceline has not been profitable. In 1999, it lost over $1billion. It
pared losses to$15million by 2001, but then, as travel declined after the September 11 tragedy, regressed in
2002, posting a $22milllion lost. Key executives resigned. Headlines such as “Priceline on the ropes” and
“curtain call for Priceline.com” predominated.
However, in 2003, Priceline recorded its first ever annual profit, recording $10.4million in net income. The
good news continued in 2004 and 2005, with Priceline recording net income (before tax adjustments) of
$30million and $35million, respectively. And during the period between June 2003 and December 2005,
Priceline’s stock has held relatively steady in the mid-$20 range, a vast change from it early years, when it
roller-coastered from a high of $160 to a low of $1. How has Priceline engineered this seeming turnaround?
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2. Has it finally find a business model that works? What went wrong with its original business, which initially
seemed so promising?
Priceline commenced operations on April 6, 1998, with the sale of airline tickets. To purchase a “name your
own price” ticket, a customer logs onto Priceline.com’s website, specifies the origin and destination of the
trip, the dates he or she wishes to depart, the price the customer is willing to pay and a valid credit card to
guarantee the offer. The customer must agree to fly on any major airline, leave at any time of day between
6A.M. and 10P.M., accept at least one stop or connection receive no frequent flier miles or upgrades, and
accept tickets that cannot be refunded or changed. Upon receiving the offer, Priceline checks the available
fares, rules, and inventories provided by its participating airlines and determine whether it will fulfill the
order at the requested price. If so, it notifies the customer within an hour that his or her offer has been
accepted. On the customer, a central promise of Priceline’s “name your price” business model is that in
many product and service categories, there are a significant number of customers from whom brands,
product features, and sellers are interchangeable, particularly if agreeing to a substitution among brands or
sellers will result in saving money. On the vendor side, the Priceline “name your own price” business model
is predicated on the assumption that sellers almost invariably have excess inventory or capacity that they
will sell at lower prices, if they could do so without either lowering their prices to retail customers or
advertising that lower prices are available. Priceline believed that it business model was ideally suited to
industries categorized by expiring or rapidly ageing inventory (for example, airline seats not sold by the time
a flight takes off or hotel rooms not rented), although it did not think that it would be limited to such
industries.
Priceline extended it system to hotel reservations in October 1998, and in January 1999, introduced home
financing services. It went public in March 1999, and later that year, it added rental cars and even new cars
to the mix. To promote its products in Priceline brands, Priceline embarked on an extensive (and expansive)
advertising campaign, hiring William Shatner to become the voice of Priceline, and it quickly became one of
the most recognizable brands on the web.
At the beginning of 2000, Priceline licensed the name your own price business model to several affiliates,
including Priceline web house club, which attempted to extend the models to groceries and gasoline, and
perfect yard sale, which used the model to sell used goods online and added long distance and travel
insurance. Priceline also had ambitious plans to expand internationally, and in 2000, licensed its business
model to companies planning to setup similar operations in Asia and Australia.
However, by fall 2000, the picture no longer looked so rosy. In October 2000, after only 10 months of
operation, Priceline’s affiliate Priceline web house club, unable to raise additional financing, shutdown it
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3. business, after running through $363million. The financial climate at the time, with its renewed emphasis on
profitability, made it impossible for Jay Walker, Priceline’s founder, to raise the additional hundreds of
millions that would required before web house might become profitable. Walker did not see the closure as a
failure of the Priceline business model, however. Instead, he characterized it as the result of the “fickle
sentiments” of investors. Many analysts did not accept Walker’s characterization. Instead, they pointed on
other factors. First, many of the major manufacturers of food and dried goods chose not to participate in
Priceline Web house. So, to generate consumer interest, Priceline Web house Hershey’s, did eventually sign
up, many, such as Kraft, Procter & Gamble, and Lever Brothers, did not. The second miscalculation was that
bidding on groceries and gasoline did not exactly provide a “hassle-free” way to shop. Customers were
required to bid on and pay for groceries online, then use a special identification card to pick them up at a
participating supermarket. If the particular items purchased were not available at the store the customer will
either have to go to another store, or return at another time. To many, the demise of Priceline Web house
highlighted potential cracks in the Priceline business model and raised strong concerns about its ultimate
extensibility. Priceline’s founder Jay Walker resigned in December 2000.
New management sharply curtailed Priceline’s expansion and laid off over a thousand employees. Priceline
chairman Richard Braddock, said ‘Priceline will entertain selective expansion…. With stringent financial
controls. We’re going to make money on this and move forward.” In 2002, Priceline focused on its core
business of travel reservations, shedding its auto sales and long distance telephone units. Its only long-travel
today is its 49% interest in Priceline Mortgage. And in 2003-2004, it tweaked its business model once again
adding new discounts “retail” airline ticket and rental car services to compliment it hallmark “name your
own price” offerings, in other to compete more effectively with firms such as Expedia,Travelocity, Hotwire,
and Orbitz for the business of the consumer who prefers to book a specific airline or rental cars. Although
these services are not as lucrative as the name your own price model ( it takes 1.5 to 2.5 retail plane tickets
to bring in the same gross profit as a single name your own price ticket), and to a certain extent
“cannibalize” its name your own price tickets, Priceline has made up at least some of the difference in
increased volume. To further support this strategy, Priceline requires a majority interest in TravelWeb, a
consortium of five large hotel chains that provides Priceline with access to discount hotel rooms, purchased
active hotels and bookings B.V., a European hotel service, and in 2005 extended it retail strategy to the hotel
market.
As noted above, these strategic moves by Priceline generated profits of $30 - $35million in both 2004 and
2005. However, although Priceline is currently “in the black”, a rosy future is by no means assured.
Priceline faces industry-wide shrinkage in all forms of travel caused by the fear of terrorism and war. In
addition, Priceline faces extraordinary competition, not just from the other online middlemen such as
Expedia.com, Travelocity.com, Hotels.com, Hotwire.com, and Cheaptickets.com, but also from the direct
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4. discount sales by airlines. Its business model today (discount travel services) is a mere shadow compared to
Jay Walker’s expansive vision. Some investors believe Priceline’s future may be primarily as an acquisition
candidate. So even though right now it looks as if Priceline will survive, the question remains: for how long
and on what terms?
Sources:
Priceline.com incorporated from 10 – Q Quarterly report for Quarterly period ended September 30, 2005, filed with the securities
and exchange commission on November 9, 2005; “Priceline.com reports financial report FOR 4TH QUARTER AND FULL
YEAR 2004, priceline.com Press Release, February 17, 2005; priceline.com incorporated report on form 10-k for the fiscal year
ended December 31, 2004, filled with the securities and exchange commission on march 15, 2005; “Priceline’s new math” by Seth
laysonn, The MotlyFool, March 26,2004; “A Humbler,Happier priceline,” by timothy J. Mullaney, Business week, August
11,2003.
QUESTIONS
1. What are the core components of Priceline.com’s business model?
2. Do you think Priceline will ultimately succeed or fail? Why?
3. How has Priceline (and similar online services) impacted the travel services industry?
4. Follow up on developments at Priceline since August 2005 when this case study was prepared, Has
its business model and /or strategy changed at all, and if so, how? Who are its strongest
competitors? Is it profitable or operating at a loss?
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