Priceline The online market for travel services will reach $63 billion within a few years, and Price

Priceline

The online market for travel
services will reach $63 billion within a few years, and Pricelinecom 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 Pricelinecom 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 Library and other
Internet sources, to see how the Priceline system works At the Priceline website,
follow the link marked New to Priceline, Find out More Under each of the
categories, click on “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

Define price sensitivity Provide
relevant examples

What can you say about the price
sensitivity of Priceline’s customers?

What effect would Priceline’s
prices be likely to have on the reference prices customers bear in mind for
travel and mortgage services?

How does the company’s lowest-cost
loan guarantee affect a customer’s perception of the product’s value?