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Situational Analysis
Nature of Demand
- The consumer market for travel can be segmented into five groups: Private Jet, 1st Class Senior Executives, Middle Management, Regular Leisure Travel, and "Bus People".
- The final groups on this list are the primary market for Priceline.com, and these segments could be grouped together as Budget Minded Consumers.
- Budget Minded Consumers are price sensitive and are willing to sacrifice direct flights, convenient boarding times, and other amenities in order to name their own price. This segment of traveler has little to no brand loyalty as they primarily seek to find the best price for their trip. Price sensitive consumers purposely choose to use Priceline.com over the airlines' individual websites. When consumers consistently find better prices for travel arrangements on Priceline.com, they are more likely to continue to use Priceline.com for all their travel needs.
- Brand awareness for Priceline.com and received the "mega brand" status only after 150 days after its launch.
- Travel consumers are able to use a variety of outlets to find and purchase hotel accommodations and airline tickets. Travel agents are one of the options, but the advent and success of the Internet has taken much of the market away from these agents.
- Consumers travel for three main reasons business/leisure, emergency trips, and near or long term trips. Priceline.com's market reaches the leisure and near or long term consumers. Emergency trips due to illness in the family or other unforeseen circumstances do not afford much time or flexibility in the consumer's destination or schedul ...