Abstract

In 1998, Priceline had pioneered the revolutionary ‘Name Your Own Price’ pricing system that was the inverse of the of the customer-retailer relationship. Some analysts had raised concerns that a business model based on the path-breaking NYOP system might not be sustainable. Priceline had since moved beyond the NYOP system by providing customers with the option of choosing from a list of published prices for its travel products and services as well. In a bold move in end2007, the company permanently eliminated all booking fees on published airfares taking the analysts and competitors by surprise.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the Name Your Own Price (NYOP) pricing system
• Discuss whether a business model based on NYOP system is viable
• and Analyze the reasons and implication of Priceline’s pricing policy of not charging booking fees for published fare air tickets

Keywords

Pricing strategy, pricing policy, Name Your Own Price, NYOP, threshold price, demand and supply, business model, Priceline, Travelocity, Orbitz, Travelzoo, Expedia, Travel, services, e-commerce