Priceline.Com Essay Example
Priceline.com is a company that was founded in 1997 and specializing in assisting its customers to obtain discounts for travel and hotel related purchases. The company over the years has grown to achieve a strategic competitive position in the market. The market in which priceline.com operates is very competitive. The market draws competition from traditional and online sellers of the services that the company offers. Even with competition, the company has managed to compete favorably. This paper seeks to discuss the market in which the company operates, the marketing strategy put in place and the impact marketing strategies have had on the company’s brand.
According to Chen (2012), priceline.com has established itself in the e-commerce and brokerage business through aggressive promotion and marketing campaigns. Unlike most other online purchase companies, Priceline.com over the years has invested heavily on both online and offline advertisement. The company marketing strategy is based on the belief that its target market is not only internet users but all prospective customers. This has seen it invest heavily in offline marketing platforms other than just the internet. The offline-branded advertisement, however, is only common in the United States but not other foreign countries. In order to reach the international market, however, the significant allocation for online marketing goes towards the international market. Chen (2012) argues that Priceline.com in a bid to reach a broader global market uses internet search engines and other affiliated online marketing. This the company does by purchasing most of the travel-related search keywords to increase traffic on their website. By doing this, the company manages to reach the majority of internet users internationally.
The four traditional Ps contained in the Marketing mix tool has been well implemented by the company. That is, in their marketing strategy according to Chen (2012) the company has managed to bring into play the 4Ps using them their advantage. Luo, Ba and Zhang (2012) argue that the services that the company has specialized in are seen as satisfying human needs. Travel related activities have increased over the years as a result of the growth of the middle class. Because of this, Priceline.com has been able to come up with services and products they feel best suits the client. In their promotion, the company is reported as a broker that asks customers to decide the price at which they would like to get a product or a service. And provided that, Zott and Amit (2008) argue, one can access the internet, these products and services are readily available.
Priceline.com has very many competitors. The list of competitors extends from large online search companies such as Yahoo and Google to small travel agencies. There are very many online travel-related businesses, but Priceline.com has managed to maintain relevance. It can be said in this regard that the marketing strategy that has been used by the company has been effective and has helped it build a strong brand. According to Chen (2012), other online companies such as Trivago have been forced to rethink using offline marketing tools because of the success of Priceline.com brand.
Analysis of specific objectives for the integrated marketing communications program of priceline.com
The company uses IMC to communicate with the market. Brand equity is created through the application of the IMC. According to (Gerber, 2008), IMC is directly linked with price, service, product, and the distribution of the products and services. Priceline.com uses IMC to establish brand awareness in the market. The ability to create brand awareness is created through different modes of advertising. Flexibility is required in the marketing communication to reach a wider audience in the market. The first objective of the IMC is to make sure the consumers in the market have access to information. The information may be conveyed through different modes of advertising. In order to make sure that the consumers have access to priceline.com information, IMC tends to combine the company’s vision and its objective (Shin, 2013). The significance of combining the two is to increase consumer awareness in the market. Consumer may need to understand the objective of the company in order to enhance their relationship.
Another objective of the integrated marketing communication in Priceline.com is to persuade the consumers to use the company’s products. The Priceline.com can use several methods to persuade the consumers to purchase their products. Some of the methods that the company may use are the ability to provide a competitive pricing on their products (Shin, 2013). Price.com could also lower their interest rates to attract more customers to purchase their products. Informing the customers how the products will provide more advantage for other similar products from the different company. This will require Price.com to clarify to the customers what are the special features that other similar products lack. The ability of the company to use integrated marketing communication will ensure that the target market receives the information concerning the company’s products (Gerber, 2008). Considering how the markets are developing, it is wise for the company to consider its budget and the audience in the market in order to achieve the IMC goals.
Effectiveness in technology has made it possible for marketing communication to reach a wider audience. Consumers spend more time on the internet or online market with an aim of fulfilling their needs. According to (Shin, 2013), the goal of marketers is to expose the brands in the market so that the consumers could be able to remember them the next time they do shopping. The strategies of the brands should not be determined through advertising only. The objective of IMC is to give critical information to the consumers. In order for IMC to be effective, the marketing team should understand the factors that influence consumer behavior in the market. The ability of the consumer to make purchasing decision is influenced by many things. Social issues influence the decision of the consumer. In order for the marketing team to make sure that the social issues influence the consumer on their favor, the IMC should be able to persuade the consumers shopping online (Gerber, 2008). This should be through discounts, and promoting the products in the market.
Another objective of IMC is to increase efficiency in the marketing environment. Priceline.com has established strategies that are meant to increase efficiency in the market. Through IMC, priceline.com is able to meet customer satisfaction. The consumers are able to access the markets via the internet and order for goods and services. This triggers the marketing team to understand the wants of the consumers. Understanding the wants of the consumers through IMC has enabled priceline.com to increase efficiency and achieve customer satisfaction (Shin, 2013). The marketing team has been able to determine the psychological and social factors that influence the purchasing decision of the consumer. For instance, priceline.com has been able to establish the motivational factors that influence the consumer to make decision to purchase a particular product or service (Gerber, 2008).
Another objective of the IMC is to increase the business demand for a particular product or service in the market. Priceline.com is able to achieve this by studying the consumer behavior in the market (Gerber, 2008). The psychological factor like motivation is related to the needs and wants of the consumer. Motivating the consumers to purchase a particular product will influence an increase in demand of a particular product in the market. IMC tends to increase the sales of the company by persuading individuals in the market to purchase their products. This is done through reinforcing a need to the mind of an individual in the market. This will develop a purchasing motivation to the consumer. Perception of the consumer towards a particular product or service will be positive. The consumer will understand the significance of the product or service by interpreting the information provided through IMC (Shin, 2013).
Analysis of sales promotion strategy and various types of sales promotion tools used in the IMC
Priceline.com needs to promote some of its products in order to expand its market. The business has some promotional strategies that it uses to attract more consumers to purchase its products. The company may apply two types of promotional strategies. Priceline.com uses a push promotional strategy when persuading the customers to purchase its products. The push strategy can use the company's sales force to establish a consumer demand for a particular product in the company (Shin, 2013). The push strategy is used to convince the market players to push the product through the distribution channel. This aims to enable the consumers have easy access to the products. Priceline.com uses this promotional strategy to promote its products through other resellers who promote the products to the final consumer. This involves Priceline to promote the products to the wholesalers who intern will promote the products to the consumers or retailers. In this strategy, the aim is to persuade the wholesalers and the retailers to accommodate the company’s brand by creating space and advertising. The typical strategies employed in this promotion are the provision of allowance, discounts, premiums, and free trials (Gerber, 2008).
The company also uses the pull strategy. Priceline.com aims to persuade the consumers to use their services through a marketing channel. Priceline.com focuses the communication efforts on the markets, especially on the target consumers (Shin, 2013). Priceline.com has invested a lot in advertising to create an environment for consumer demand for the services on the market. This method is usually used when the market distributors are reluctant to distribute the services. The objective of this promotional activity is to entice the consumers to try the new service that the company is offering. The typical tactics that priceline.com will employ in this strategy are the cash refunds, advertising, premiums, and patronage rewards (Gerber, 2008).
Priceline.com is a company that has endured stiff competition in a fast growing industry. The company, however, has invested heavily in its marketing strategy. The company has managed to use both online and offline tools to reach its target market. This has seen the company build a strong brand with a competitive advantage. Priceline.com has also applied the use of pull strategy to enhance the promotion of the products. The pull strategy will be used to encourage consumers to use the company’s new services. The company also uses the push promotional strategy to encourage the consumers to use the services through other market players.
Chen, C. H. (2012). Name your price at priceline. com: Strategic bidding and lockout periods. The Review of Economic Studies, rds005.
Luo, J., Ba, S., & Zhang, H. (2012). The Effectiveness of Online Shopping Characteristics and Well-Designed Websites on Satisfaction. Mis Quarterly, 36(4), 1131-1144.
Zott, C., & Amit, R. (2008). The fit between product market strategy and business model: implications for firm performance. Strategic Management Journal, 29(1), 1-26.
Gerber, K. (2008). Marketing communication. Cape Town: Pearson Education South Africa.
Shin, K.-Y. (2013). The executor of integrated marketing communications strategy: Marcom manager's working model. Berlin: Springer.