Pricing Analysis for Merrill Lynch Integrated Choice

Stuart Altschuler (), Donna Batavia (), Jeff Bennett (), Russ Labe (), Bonnie Liao (), Raj Nigam () and Je Oh ()
Additional contact information
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

Interfaces, 2002, vol. 32, issue 1, 5-19

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.

Keywords: Financial Institutions: brokerage/trading; Marketing: pricing (search for similar items in EconPapers)
Date: 2002
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