Priceline.Com Marketing Analysis
Priceline.com
Introduction
"Winners don 't do different things, they do things differently." Priceline changed the conventional marketing system by introducing a role reversal of the traditional seller-buyer system. Launched in 1998, Priceline, the brainchild of Jay Walker, provided "lower than retail" airfare options for travel enthusiasts. Priceline is the "eBay" of airline tickets, allowing the buyer to bid (once) for the fare. By facilitating sales below retail price via the Internet, Priceline makes it possible for various sellers to move additional inventory, in the form of unsold tickets, while still protecting their brand 's retail prices.
The company entered into partnership agreements with several airline companies and provided value to their businesses via brand and price shields. The sellers, or Airline companies, were not contractually bound to provide exclusivity of any form to Priceline while attempting to rid themselves of surplus tickets.
Operational Strategy
Priceline experienced instantaneous success in the Internet community, and reached its $1MM in just over a year of its inception. It effectively leveraged the Internet boom to locate the right kind of sellers for a particular buyer. Priceline later expanded its concept to include other industries such as hotels, automobiles, and home financing. Though serving different needs, the selling concept remained the same; potential customers would name their maximum price based on their budget, and Priceline would try to find the best deal for them. With the exception of home financing, consumers had only one opportunity to accept or reject the deal, thus prompting the consumer to make spontaneous decisions. The Priceline business model was horizontally scalable as well, and so lent itself to businesses such as groceries, car rentals, and long distance telephone systems.
Marketing Strategy
The company ran several brand strengthening campaigns which encompassed the elements of an
Introduction
"Winners don 't do different things, they do things differently." Priceline changed the conventional marketing system by introducing a role reversal of the traditional seller-buyer system. Launched in 1998, Priceline, the brainchild of Jay Walker, provided "lower than retail" airfare options for travel enthusiasts. Priceline is the "eBay" of airline tickets, allowing the buyer to bid (once) for the fare. By facilitating sales below retail price via the Internet, Priceline makes it possible for various sellers to move additional inventory, in the form of unsold tickets, while still protecting their brand 's retail prices.
The company entered into partnership agreements with several airline companies and provided value to their businesses via brand and price shields. The sellers, or Airline companies, were not contractually bound to provide exclusivity of any form to Priceline while attempting to rid themselves of surplus tickets.
Operational Strategy
Priceline experienced instantaneous success in the Internet community, and reached its $1MM in just over a year of its inception. It effectively leveraged the Internet boom to locate the right kind of sellers for a particular buyer. Priceline later expanded its concept to include other industries such as hotels, automobiles, and home financing. Though serving different needs, the selling concept remained the same; potential customers would name their maximum price based on their budget, and Priceline would try to find the best deal for them. With the exception of home financing, consumers had only one opportunity to accept or reject the deal, thus prompting the consumer to make spontaneous decisions. The Priceline business model was horizontally scalable as well, and so lent itself to businesses such as groceries, car rentals, and long distance telephone systems.
Marketing Strategy
The company ran several brand strengthening campaigns which encompassed the elements of an