Flexibility and revenue management in the automotive industry

Abstract

Purpose

This research aims to analyze the potential of revenue management in the German car industry. The concept offers the chance for original equipment manufacturers (OEMs) to be more customer‐oriented to reduce costs and increase earnings. To implement revenue management, criteria are required to segment the customers. The car configuration changes and the delivery time look suitable in this context and this paper aims to analyze these.

Design/methodology/approach

Survey analysis was conducted with 2974 German buyers of new cars. The respondents recently bought a car or were in the planning process of doing so. A total of 803 data sets could be evaluated statistically using SPSS software. Descriptive statistics and mean test were utilized to test several hypotheses and find out distinctions between the respondents.

Findings

The results show that German car buyers could be segmented in to different groups according to the criteria: delivery time and configuration changes. This enables manufacturers to introduce revenue management and realize benefits in better customer orientation and improved supply chain planning.

Originality/value

This research shows that German OEMs, especially the premium OEMs overestimate the value of change flexibility and short delivery times for their customers. The implementation of revenue management could help to reduce complexity and offer each customer the appropriate degree of change flexibility and the optimal delivery time combined with a process‐ and effort‐adequate pricing.

Citation

Voigt, K., Saatmann, M. and Schorr, S. (2008), "Flexibility and revenue management in the automotive industry", Journal of Enterprise Information Management, Vol. 21 No. 4, pp. 424-439. https://doi.org/10.1108/17410390810888697