Priceline.com• A reverse auction site• The “name your price” concept can be adopted to many industries.• Providing travel...
The Business Model• A customer makes an offer (the customer “names a price”). – The customer agrees to lose flexibility:...
The Logic• Customers obtain lower prices at the cost of flexibility -- market segmentation.• Sellers can sell excess capa...
Potential Weaknesses• Consumers with bad experiences may deter others.• Sellers may decide to do it alone, or extract be...
Facts about Priceline.com• Began sales on April 1998 – Leisure airline tickets.• Expanded into other areas: – Hotel room...
Opportunities• Ancillary revenues – Customers sign up for other services (credit card, car rental, etc.)• Exploiting o...
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Priceline i

priceline
Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Priceline i

  • 1. Priceline.com• A reverse auction site• The “name your price” concept can be adopted to many industries.• Providing travel and other services to individuals• Commission revenues 1
  • 2. The Business Model• A customer makes an offer (the customer “names a price”). – The customer agrees to lose flexibility: • Exact departure times • Connections • A specific airline.• The customer is bound if the offer is accepted. Credit card is charged for transaction upon fulfillment.• Priceline matches a seller willing to sell at that price. 2
  • 3. The Logic• Customers obtain lower prices at the cost of flexibility -- market segmentation.• Sellers can sell excess capacity without eroding current markets..• Use customers’ power.• Enjoy transaction fees. 3
  • 4. Potential Weaknesses• Consumers with bad experiences may deter others.• Sellers may decide to do it alone, or extract benefits• Others may begin similar businesses. – Patents. Actions against the patents. 4
  • 5. Facts about Priceline.com• Began sales on April 1998 – Leisure airline tickets.• Expanded into other areas: – Hotel rooms – Car rentals 5
  • 6. Opportunities• Ancillary revenues – Customers sign up for other services (credit card, car rental, etc.)• Exploiting other markets: – Telephone calls• Expanding into other areas: – New/Zealand and Australia 6

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