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    Online travel services and priceline

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    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.

    How does the Priceline system works. At the Priceline.com 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.

    1.Define price sensitivity. Provide relevant examples.

    2.What can you say about the price sensitivity of Priceline's customers?

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

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

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    https://brainmass.com/business/marketing/online-travel-services-and-priceline-58797

    Solution Preview

    Priceline is a kind of auction site wherein consumers bid for the lowest ticket prices or mortgage rates, and if available, get their prices. Therefore, it is like stating your own price and if lucky, even getting that price. Frequent users of this site make it sure that they bid once on priceline before making any purchases.

    1) Price sensitivity can be defined as the percentage change in demand volume of a product or service, due to one percent change(negative or positive) in the price of a product or a service. Higher the fluctuation in the demand of a product or a service due to a minimal change in price, higher the price sensitivity of the product. Price sensitivity is ...

    Solution Summary

    Priceline is a kind of auction site wherein consumers bid for the lowest ticket prices or mortgage rates, and if available, get their prices. Therefore, it is like stating your own price and if lucky, even getting that price. Frequent users of this site make it sure that they bid once on priceline before making any purchases.

    $2.19

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