Pricing and Revenue Management

Camilleri, M. A. (2018). Pricing and Revenue Management. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 9, pp. 155-163). Cham, Switzerland: Springer Nature.

11 Pages Posted: 17 Dec 2018

See all articles by Mark Anthony Camilleri

Mark Anthony Camilleri

University of Malta; University of Edinburgh

Date Written: December 1, 2017

Abstract

Modern revenue managers understand, anticipate, and react to market demand to maximize their businesses’ revenues. They often do so by analyzing, forecasting, and optimizing their fixed, perishable inventory, and time-variable supply, through dynamic prices. Hence, the objective of pricing and revenue management is to stimulate demand from different customers to earn the maximum revenue from them. The essence of this discipline is to understand the customers' perceptions of value and to accurately align the right products to each customer segment. Therefore, this chapter suggests that revenue management systems combine data mining and operational research with strategy. Essentially, this involves maximizing revenue from a combination of high-yield and price-sensitive customers; as these systems are intended to reduce seat spoilage and to increase load factors; thereby filling excess capacity. Moreover, these systems also manage overbooking, and are intended to minimize denied boarding.

Keywords: marketing, pricing, revenue management, yield management, capacity management, overbooking, denied boarding, perishability, laod factors, airline marketing

JEL Classification: M00, Z3, Z30, Z33, M1, M10, M3, M30, M31

Suggested Citation

Camilleri, Mark, Pricing and Revenue Management (December 1, 2017). Camilleri, M. A. (2018). Pricing and Revenue Management. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 9, pp. 155-163). Cham, Switzerland: Springer Nature.. Available at SSRN: https://ssrn.com/abstract=3289484

Mark Camilleri (Contact Author)

University of Malta ( email )

Department of Corporate Communication,
Faculty of Media and Knowledge Sciences
Msida, MSD2080
Malta
79314808 (Phone)

HOME PAGE: http://https://www.um.edu.mt/profile/markacamilleri

University of Edinburgh

27 Buccheluech Place,
The Business School
Edinburgh, Scotland EH8 9JS
United Kingdom

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