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Practical Pricing and Revenue ManagementFundamentals and practical applications

Launched October 2009 Updated November 2009 18 lectures
Dr. Ian Yeoman
Associate Professor of Tourism Management, Victoria University of Wellington, New Zealand
Summary

In times of economic downturn you need to know how much your customers will pay for a product and you need to create appropriate strategies. This is not about offering the lowest price in order to fill capacity. It is about knowing your market segment, how much they will pay,... read morewhen they will purchase and what distribution channels they will use. Pricing is about deciding your market position, i.e. premium or low cost, whereas revenue management is the strategic and tactical decisions firms take in order to optimize revenues and profits. Furthermore, revenue management is usually associated with firms that are constrained by capacity or offer a time based product or service such as a round of golf or hotel accommodation. Everyone is probably familiar with Easyjet and Ryanair. These two firms operate a low cost pricing model and use revenue management as a strategic tool. Fundamentally, they are in a business where tickets for the same flight are sold at many different fares throughout the booking horizon depending on product restrictions as well as the remaining time until departure and the number of unsold seats.

The use of these revenue management strategies has transformed the transportation and hospitality industries, and has become increasingly important in retail, telecommunications, entertainment, financial services and healthcare.

Service industries have a number of characteristics in common including:
• Fixed capacity
• High fixed costs and low variable costs
• Time-varied demand
• Similarity of inventory units

In order to manage these characteristics, firms must use the following:
• Market segmentation
• Historical demand and booking patterns
• Pricing knowledge
• Overbooking policy
• Information systems
• Distribution channels

In a global, competitive environment a strategic approach is necessary, whether it is to gain market share or position your product. The emergence of the internet and transparency of pricing has made revenue management more important as a driver of strategic advantage.

This series will offer:
• Insights into the latest research, theories, applications and innovations
• Insights into how pricing and revenue management works in different industries

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Concepts and Insights (11 Lectures)  

What will consumers pay more for? Luxury markets and premium pricing
23 min
  • Dr. Ian Yeoman
  • Associate Professor of Tourism Management, Victoria University of Wellington, New Zealand
How do consumers perceive value and price: understanding value-based pricing
61 min
  • Prof. Irene Ng
  • Professor of Marketing Science, University of Exeter, UK
Does the consumer trust you?
42 min
  • Ms. Una McMahon-Beattie
  • Senior Lecturer in Marketing, University of Ulster, UK
Search-based advertising and revenue management
29 min
  • Dr. Özgür Özlük
  • Assistant Professor, San Francisco State University, USA
Low cost worlds and the airline industry
24 min
  • Dr. Laurie Garrow,
  • Ms. Stacey Mumbower
Pricing and revenue optimization: maximizing staff effectiveness
51 min
  • Dr. Warren Lieberman
  • President, Veritec Solutions, USA
Fencing in the practice of revenue management
28 min
  • Dr. Michael Zhang
  • Assistant Professor, St. Mary’s University, Canada
Revenue management and air cargo
42 min
  • Ms. Gina Morello
  • Manager in Cargo Revenue Management, American Airlines, USA
Era of convergence in revenue management
28 min
  • Mr. Ramesh Venkat
  • Senior Vice President of Yield Management, Emirates Airline, UAE
Online travel data: A goldmine of new opportunities
18 min
  • Dr. Laurie Garrow,
  • Ms. Brittany Luken
Global distribution capabilities, origin destination control and dynamic pricing
52 min
  • Dr. Karl Isler
  • Head of Operations Research and Strategy, Revenue Management, Pricing and Distribution Department, Swiss International Airlines, Switzerland

How Pricing and Revenue Management Works (7 Lectures)