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Pricing Analysis for Merrill Lynch Integrated Choice

Author

Listed:
  • Stuart Altschuler

    (Merrill Lynch Management Science Group, P.O. Box 9065, Princeton, New Jersey 08543–9065)

  • Donna Batavia

    (Merrill Lynch Strategic Marketing Services, 800 Scudders Mill Road—3F, Plainsboro, New Jersey 08536)

  • Jeff Bennett

    (Merrill Lynch Strategic Marketing Services, 800 Scudders Mill Road—3F, Plainsboro, New Jersey 08536)

  • Russ Labe

    (Merrill Lynch Management Science Group, P.O. Box 9065, Princeton, New Jersey 08543–9065)

  • Bonnie Liao

    (Merrill Lynch Management Science Group, P.O. Box 9065, Princeton, New Jersey 08543–9065)

  • Raj Nigam

    (Merrill Lynch Management Science Group, P.O. Box 9065, Princeton, New Jersey 08543–9065)

  • Je Oh

    (Merrill Lynch Management Science Group, P.O. Box 9065, Princeton, New Jersey 08543–9065)

Abstract

In late 1998, Merrill Lynch and other full-service financial service firms were under assault. Electronic trading and the commoditization of trading threatened Merrill Lynch's value proposition—to provide advice and guidance through a financial advisor. Management decided to offer investors more choices for doing business with Merrill Lynch. A cross-functional team evaluated alternative product and service structures and pricing and constructed models to assess individual client's behavior. The models showed that revenue at risk to Merrill Lynch ranged from $200 million to $1 billion. The resulting Integrated Choice strategy enabled Merrill Lynch to seize the marketplace initiative, changed the financial services landscape, and mitigated the revenue risk. As of year-end 2000, client assets reached $83 billion in the new offer, net new assets to the firm totaled $22 billion, and incremental revenue reached $80 million.

Suggested Citation

  • Stuart Altschuler & Donna Batavia & Jeff Bennett & Russ Labe & Bonnie Liao & Raj Nigam & Je Oh, 2002. "Pricing Analysis for Merrill Lynch Integrated Choice," Interfaces, INFORMS, vol. 32(1), pages 5-19, February.
    • Handle: RePEc:inm:orinte:v:32:y:2002:i:1:p:5-19
    DOI: 10.1287/inte.32.1.5.14
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    Citations

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    Cited by:

    1. Yannis Bakos & Henry C. Lucas & Wonseok Oh & Gary Simon & Siva Viswanathan & Bruce W. Weber, 2005. "The Impact of E-Commerce on Competition in the Retail Brokerage Industry," Information Systems Research, INFORMS, vol. 16(4), pages 352-371, December.
    2. Raj Nigam, 2008. "Structuring and Sustaining Excellence in Management Science at Merrill Lynch," Interfaces, INFORMS, vol. 38(3), pages 202-209, June.

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