Free Target Markets And Positioning Of Priceline Company Research Paper Example
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Priceline is a first class online travel organization, and offers its customers a wide range of travel services or products, for example, airline tickets, hotel bookings, vacation packages, cruises, as well as car rentals. Priceline manages online travel portals: rentalscars.com, lowestfares.com, booking.com, and priceline.com, which link travelers with suppliers of travel globally (Pride et al., 2015).
Priceline Company has segmented its target market. Its customers cover users seeking travel deals or products for leisure and business reasons. In addition, its customers’ base includes services and products suppliers advertising on the organization websites (Business2003). The firm sells travel services or products to travelers through price disclosed model, in which the agency earns revenue for every transaction. In addition, it sells its services or products via opaque pricing model, in which, the agency earns the difference or balance of the traveler's price bid and the cost charged by the supplier (Business2003). Priceline segment its customers based on their interests, activities, or lifestyle (psychographics market segmentation). Priceline partnered with Apple Inc. and established an app that enables prospective travelers to search through existing hotel rooms, air tickets, rent cars, and accommodations. This helps in capturing those preferring doing things using their phone and assist in arranging their travel in time, or with fashion (Johnson, Weinstein, & Weinstein, 2004).
The agency does demographic market segmentation through increasing its presence within emerging markets, for example, South America, and Asia-Pacific. This is promoted by the increasing rate of Internet penetration, e-commerce adoption, the increasing utilization of mobile devices, as well as increasing disposable income (Pride et al., 2015). There is a steady increase in the demand for Internet travel services within these regions, and it is anticipated to continue increasing in the future (Pride et al., 2015). The agency has also segmented its target market based on geographical regions. Priceline provides its services or products in South America, Asia-Pacific, Europe, and North America regions. Its rentalscars.com, lowestfares.com, booking.com, and priceline.com brands provide services within all these regions (Pride et al., 2015). Priceline Company segments its target market-based on lifestyle behavioral. This is done according to customers' behavior on products or services. Customers are allowed to buy travel services via traditional cost disclosed model or through opaque pricing model. Besides, the company has rentalscars.com, lowestfares.com, booking.com, priceline.com, and phone app that can be used based on customer preference (Pride et al., 2015).
The tourism industry is a trillion-dollar sector, and Priceline Company rules or dominates this space. The agency stock had a surprising performance in the past five years. A 100 dollars investment of Priceline in 2008 developed to 1578 dollars by 2013 (Ferrell et al., 2014). Priceline has been successful in conquering the vast business opportunities availed by electronic commerce within the past decade. The growth of Priceline is still strong. The agency fathoms how to astonish as well as delight its customers with discounts or offerings. The firm booked more nights within 2013 in comparison to 2012; it rose by 39.9 percent, from 197.5 to 270.5 million between 2012 and 2013 (Ferrell et al., 2014). Airtime rose from 6.4 to 7 million, which was a 9.1 percent increase. In addition, rental car days rose from 32 to 43.9 million, which was a 37 percent increase. The most important brand of Priceline, bookings.com, put in 150000 novel properties on the destination list in the year 2013, which currently covers more than 425000 properties globally. The novel properties were put in mostly from the South America, Asia-Pacific, and North America region (Ferrell et al., 2014). By actual numbers, the company had 32583, restaurant customer base by the first quarter of 2014. Priceline seated less than forty-seven million dinners, and 90 percent of them were within North American restaurants. The open table type of business is concentrated within North America, in which it serves approximately 24000 restaurants. Nevertheless, the scope of development over the Internet restaurant reservation type is bigger in global markets than in North America. In as much as over 20 percent of hotel bookings in America happen online, the proportion remains at low single units in almost every global market (Johnson, Weinstein, & Weinstein, 2004).
The company portrays an increasing growth image to the target market. Such growth is anticipated to continue growing in the future. In addition, the stock of Priceline is not expensive as compared to other dotcoms. Priceline Inc. enjoys a huge operating margin, which is in excess of thirty-six percent; the margin appears defensible because of mind share about booking hotel rooms. It is also probably that mobile revolution or innovation does not make people think twice about firing up the app for booking (Johnson, Weinstein, & Weinstein, 2004).
The biggest strength of Priceline is geographical diversification, which is anticipated to offer the agency continued development in the future. With operations within about 200 nations, the agency has huge penetration within the first world nations of North America and Europe. Besides, Priceline is present within the fast-developing emerging countries or regions. Priceline was the last entrant in the N. America market, though it is performing excellently and capturing the vibrant tourism market (Johnson, Weinstein, & Weinstein, 2004). Approximately 55% of the total booking on the leading performing brand came from global markets, and particularly from the region of Asia Pacific, including China (Cohen, 2004). The agency huge presence within emerging markets offers development opportunities, because these regions are anticipated to realize a rise in per capita income. It is anticipated that Priceline can capitalize on such development or growth trend (Cohen, 2004).
Priceline differentiates itself from its rivals by simplifying its customers' search by offering easy access to online booking details of car rental packages, hotels, airlines, as well as cruises in one platform. The unique customer service of the company distinguishes it from competitors. The firm provides three distinct categories of services via the platform of Priceline.com: opaque services, price-disclosed services, as well as semi-opaque services. Such services satisfy various needs of travelers. For instance, price-disclosed services serve less price sensitive customers, though prefer knowing the finer details of itineraries. In addition, Priceline differentiates from its rival by financial discipline, which has assisted the agency to thrive. It is a proactive genius, which fathoms how to delight and astonish customers with discounts or offerings (Johnson, Weinstein, & Weinstein, 2004). Besides, Priceline has strongly pursued each development opportunity to remain ahead of its rivals.
The Mobile business has been a significant determinant of development recently for online businesses, and Priceline invests heavily within mobile business capabilities. The agency realized a billion dollars’ value of revenue via booking.com through mobile interfaces in the year 2011. The figure increased to 8 billion dollars in the year 2013. Mobile interfaces forms significant channels for Priceline to extend services or products to the customers (Ferrell et al., 2014). Online travel currently is a competitive space, particularly, presently that Google is taking an interest in the space by licensing hotel or restaurant booking software (platform) from Room 77. By that, Google can push the customers to book travel via the app. This gives Priceline a competitive advantage (Ferrell et al., 2014).
Priceline also gains a competitive edge by investments in planned or strategic partnerships. The company has proactively sought partners, which may improve the services or products offered by the firm. The firm announced a partnership plan with NYC & Company that is New York official tourism and marketing institution. Under the joint venture, Priceline will amalgamate NYC & Company tourism website namely, nycgo.com, to be a broad restaurant booking agency. In addition, Priceline has collaborated with Orlando hotels. The partnership added extra options or alternatives to the Priceline’s accommodations booking.com (Ferrell et al., 2014).
Business: The ultimate resource. (2003). Beijing: Citic Publishing House.
Cohen, W. A. (2004). The art of the strategist: 10 essential principles for leading your company to victory. New York: AMACOM.
Ferrell, O. C., Niininen, O., Lukas, B., Schembri, S., & Pride, W. M. (2014). Marketing Principles. Melbourne: Cengage Learning Australia.
Johnson, W. C., Weinstein, A., & Weinstein, A. (2004). Superior customer value in the new economy: Concepts and cases. Boca Raton, FL: CRC Press.
Pride, W. M., Ferrell, O. C., Lukas, B. A., Niininen, O., & Schembri, S. (2015). Marketing principles.
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