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Online Market for Travel Services

He online market for travel services will reach $63 billion within a few years, and 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 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.

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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The response address the queries posted in 774 words with references.
//Prior to discuss the given points of the assignment, it is better to understand the concept of the company about which the discussion is made. In this series in the first part of the discussion paper, the introduction of the related company namely is given in detail.//

Online Market for Travel Services is a very popular company in the US and Canada; it is one of the leaders in the market providing unique and valuable services to its customers. Its product line includes flights, hotels, cars on rent, etc. In addition to travel services, various discount offers and services are also provided (, 2008)

//After having a good understanding of the, in the next section of the discussion paper, the concept of price sensitivity is explained. In addition to this, some examples are also added for better understanding of the users. //

Price Sensitivity can be defined as the awareness in the consumer; to what they perceive as the cost within which they will buy a particular product or service. It is very important for a marketer to access the price sensitivity accurately, because missing the cost even by a small unit can affect the company's sales targets. The aim of price ...

Solution Summary

The response address the queries posted in 774 words with references.