Trek-Ation

6 Pages Posted: 30 May 2017

See all articles by Bidhan L. Parmar

Bidhan L. Parmar

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

Abstract

In this case, a senior business analyst at the online travel agency Trek-ation struggles with the decision of whether to pursue a potentially lucrative idea. Her innovation team had proposed revising the online pricing algorithm in order to use the cookies and other information from customers' web browser to customize pricing for flights and hotels. Although she wanted to increase revenue for the company and meet her targets, she was also concerned not only about the backlash if this tactic was revealed to the public but also, more importantly, about both the fairness of this practice and the violation of customer privacy norms.

Excerpt

UVA-E-0412

Rev. May 2, 2016

Trek-ation

Yi Jao, a senior business analyst at the online travel agency Trek-ation, felt unsure as she thought about whether to pursue a potentially lucrative idea. Recently, an internal innovation team she led had proposed revising the pricing algorithm in order to use the cookies and other information from customers' web browsers to customize the ancillary fees for flight and hotel bookings. Customers' level of disposable income could be easily inferred from their online habits, and Trek-ation could use this information to alter the final price of flights and hotels while still displaying the lowest price initially. The team had suggested altering the cost of booking fees, seat selection fees, and other ancillary charges by 10% to 20%. Given the high volatility in flight and hotel prices, it would be almost impossible for customers to trace these price increases back to the booking agency. The team's research showed that loyal customers rarely abandoned their bookings because of ancillary charges. Although Jao wanted to increase revenue for the company and meet her targets, she was also concerned not only about any potential backlash if this tactic was revealed to the public but also, more importantly, about both the fairness of this practice and the violation of any privacy norms.

Yi Jao

Born and raised in Shanghai, Jao studied at the Shanghai University of Finance and Economics and majored in economics and international studies. After working for several years in Shanghai's financial sector, Jao attended the Darden School of Business. Afterward, she went to work for Trek-ation, a fairly young company based in Portland, Oregon, as a senior business analyst. Her responsibilities included analytics, reporting, and generating strategic insights. Her team typically helped groups within the company build business cases and take action to implement new ideas. The online travel services industry, in 2015, was fairly new and was growing at a brisk pace. Jao was amazed, although not surprised, at the ever-emerging new and highly complex technology; it seemed to her that every day brought yet another innovation.

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Keywords: business ethics, ethical issues, ethics, ethical thinking, leadership and values, stakeholder management, online travel industry, competitive advantage, technology, innovation, online pricing algorithm, privacy norms, hotel industry, airline industry, dynamic pricing

Suggested Citation

Parmar, Bidhan L. and Mead, Jenny, Trek-Ation. Darden Case No. UVA-E-0412. Available at SSRN: https://ssrn.com/abstract=2974209

Bidhan L. Parmar (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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