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Article

Frédéric Jallat and Fabio Ancarani

The purpose of this paper is to show how yield management and dynamic pricing, which originated in the airline industry, are now diffusing in other service industries. The…

Abstract

Purpose

The purpose of this paper is to show how yield management and dynamic pricing, which originated in the airline industry, are now diffusing in other service industries. The aim is to demonstrate that these techniques can be profitably applied to telecommunications and similar sectors and to examine the particular conditions of their implementation, development and efficiency.

Design/methodology/approach

The main concepts of yield management, dynamic pricing and CRM are carefully scrutinized. Also discussed is the concept of natural demand curve that aims at reaching a better compromise between the capacity of a company and the demand in an environment where services cannot be sold in advance. In order to sustain the analysis and demonstrate its managerial implications, five case studies are presented that exemplify some aspects of yield management techniques in the telecommunication sector.

Findings

Since the telecommunications are undergoing a process of increased competition and dynamic convergence, yield management techniques can help telecom operators to optimize the benefits they can derive from a subtle management of information networks and partnerships. However, such an approach is more difficult to implement in the telecommunication industry than in the airlines sector because of the difficulty to control (and sometimes refuse) network access to customers.

Originality/value

Capacity and revenue management become critical differentiation factors in improving service quality, loyalty and profitability. Given the increase in competitive pressure, the main objective of operators to sell customer access database to potential partners represents a radical change in the nature of financial and information flows and leads to a “customized management of services supply”.

Details

Journal of Services Marketing, vol. 22 no. 6
Type: Research Article
ISSN: 0887-6045

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Article

Keith S. Coulter

Most airlines utilize a revenue maximizing technique called yield management, which allows the airlines to allocate their fixed capacity of “perishable” seat inventory to…

Abstract

Most airlines utilize a revenue maximizing technique called yield management, which allows the airlines to allocate their fixed capacity of “perishable” seat inventory to various fare categories in the most profitable manner possible. Demand for these fare categories is usually defined in terms of the “business” vs “leisure” customer segments, while capacity is apportioned between discounted vs non‐discounted seats. The discriminatory pricing goal is to sell only non‐discounted seats to the business travel segment. Suggests that yield management techniques may also be appropriate in certain retail settings involving physical products. In the case of physical products, capacity (i.e. product inventory) is not necessarily “perishable” in the same sense as unsold seats on an airline flight; however, its value may decline with the culmination of a well‐defined shopping period or with a particular special event. Examines how the appropriate use of early discount pricing in markets defined by decreasing customer price sensitivity can maximize the revenue gained from sales of a “seasonal” product.

Details

Journal of Product & Brand Management, vol. 10 no. 5
Type: Research Article
ISSN: 1061-0421

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Article

William J. Wood

Yield should be equally considered alongside usage rate and monetary value when managing materials. The precise impact that good yield management (or the lack of it) has…

Abstract

Yield should be equally considered alongside usage rate and monetary value when managing materials. The precise impact that good yield management (or the lack of it) has on a company will vary from business to business depending on the sensitivity to variations in yield achievement. In order to be effectively managed, production yield performance must be planned and controlled, and this can only be achieved if accurate yield information is available to management. Yield performance data should be collected from each and every stage of the manufacturing process for which it is determined to be measurable, then analysed and comparisons made with established yield standards. The information should be presented to management as “exception reports”, thus emphasising priorities.

Details

Industrial Management & Data Systems, vol. 85 no. 7/8
Type: Research Article
ISSN: 0263-5577

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Article

Stuart Jauncey, Ian Mitchell and Pamudji Slamet

Definitions of yield management vary in terms of their content andfocus. Develops a “best fit” definition of yield managementof the hotel sector by reviewing the…

Abstract

Definitions of yield management vary in terms of their content and focus. Develops a “best fit” definition of yield management of the hotel sector by reviewing the literature in this area and extracting the key words and central meanings used. In addition, produces a list of eight features using a comparison and analysis of the views of London‐based front office managers and features of yield management applications promoted through vendors′ sales literature. Together these eight features illustrate what an ideal yield management application would offer. While all of the applications currently for sale within the UK offer some of these features, none of them are capable of performing the complete range.

Details

International Journal of Contemporary Hospitality Management, vol. 7 no. 4
Type: Research Article
ISSN: 0959-6119

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Article

Jean‐François Sanchez and Ahmet Satir

This paper explores the implementation of yield management using different reservation modes at a global hotel network (referred to as the “Group”).

Abstract

Purpose

This paper explores the implementation of yield management using different reservation modes at a global hotel network (referred to as the “Group”).

Design/methodology/approach

The Group operates close to half‐a‐million rooms in about 4,000 hotels world‐wide. Following an overview of yield management in hotel industry, the two reservation modes used in the Group are presented. The performance of Group's online and off‐line reservation modes globally over a two‐year period is then discussed in terms of three yield management performance measures, namely: average price (AP), occupancy rate, and average revenue per available room.

Findings

The findings indicate that the online mode outperforms the off‐line mode with respect to performance measures of AP and average revenue. Further to a global‐based comparison, a localized evaluation of these two modes is also presented for two sub‐groups of hotels clustered in a given region. Statistical analysis of findings is provided, pointing to a substantial revenue increase for the hotel sub‐group that switched from the off‐line to the online reservation mode, compared with the hotel sub‐group that continued to operate off‐line. The paper concludes with a brief discussion on the strengths, weaknesses, opportunities and threats associated with the online reservation mode.

Research limitations/implications

Future research could look into the impact of specific macro and micro economic conditions on the three yield management performance measures defined.

Originality/value

The research reported is of value to hotel executives who want to pursue online reservations.

Details

International Journal of Contemporary Hospitality Management, vol. 17 no. 2
Type: Research Article
ISSN: 0959-6119

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Article

Olivier P. Saissi

The increasing entropy of competitive markets forces companies to maximise profitability to the optimum level their resources will permit. Since services cannot be stored…

Abstract

The increasing entropy of competitive markets forces companies to maximise profitability to the optimum level their resources will permit. Since services cannot be stored, they have to be prepared and distributed more or less at the same time. Yield management, an information technology tool, seems to provide at least a partial solution to the questions that assail managers. Complementary to marketing policy, yield management is an effective way of modulating one of the variables of the marketing mix — price.

Details

The Tourist Review, vol. 53 no. 4
Type: Research Article
ISSN: 0251-3102

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Article

Joachim E. Barth

Yield management has been adopted by many hospitality organizations. An introduction to yield management concepts, resources and ideas for the design and implementation of…

Abstract

Yield management has been adopted by many hospitality organizations. An introduction to yield management concepts, resources and ideas for the design and implementation of price and capacity management tools is provided in the context of private club management. The use of contribution‐based yield statistics to monitor the performance of price and capacity decisions in high variable cost operations is discussed, along with reservations policies, perceptions of fairness and the use of coupons to obscure differential price policy.

Details

International Journal of Contemporary Hospitality Management, vol. 14 no. 3
Type: Research Article
ISSN: 0959-6119

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Article

Kate Varini, Pavan Sirsi and Sarah Kamensky

Revenue management has grown in popularity and is now a widely accepted discipline that has brought about significant improvements to businesses worldwide. With…

Abstract

Purpose

Revenue management has grown in popularity and is now a widely accepted discipline that has brought about significant improvements to businesses worldwide. With globalisation in recent times, there is now space for international hotels, fast food restaurants, automobile companies and other brands to offer their products in India. Educating people who are going to be part of such a process is a huge challenge. The aim of this paper is to present some of the challenges businesses and communities have to overcome.

Design/methodology/approach

The paper uses secondary sources to explore possible approaches to rapidly stimulate the uptake of revenue management through partnerships between hospitality and tourism businesses.

Findings

A growing middle class population and access to better education presents an opportunity to build a wider range of profitable services. Global brands with already established revenue management practices are in a position to share skills and knowledge with new and smaller players. Partnerships will be essential to rapidly and effectively develop the skills and knowledge required, starting with those in educational fields where the resources are already in place.

Originality/value

Revenue management has not been deployed widely in India. Being able to learn from the early adopters would allow Indian firms to leapfrog over issues and barriers, thus implementing practices more rapidly and effectively.

Details

Worldwide Hospitality and Tourism Themes, vol. 4 no. 5
Type: Research Article
ISSN: 1755-4217

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Article

Maria Dijkstra, Bianca Beersma and Jelle van Leeuwen

The current paper aims to argue that it is important for conflict management research to start focusing on leader–follower conflict as a “special case” of conflict because…

Abstract

Purpose

The current paper aims to argue that it is important for conflict management research to start focusing on leader–follower conflict as a “special case” of conflict because the relationship between leaders and followers is, by definition, characterized by divergence of interest and, second, because it is asymmetric in terms of power and vulnerability. Moreover, it is argued that conflict management research should start to examine the various behaviors that people engage in as a response to conflict, in a broader sense, than has been done until now. Research on conflict management increasingly recognizes the significance of interpersonal relations in the workplace.

Design/methodology/approach

As a case in point, a survey study among 97 Dutch police officers is presented. Leaders’ conflict management behaviors as assessed by followers is measured. In addition, followers’ experienced interactional justice and the extent to which they indicated that they would engage in negative and/or positive gossip about their leader was measured.

Findings

Results demonstrate that more forcing and avoiding leader conflict management behavior was related to more negative and less positive gossip about leaders. Moreover, more problem-solving and yielding leader conflict management behavior was related to less negative and more positive gossip. All relationships between leader conflict management behavior and follower gossip were mediated by followers’ experienced interactional justice.

Originality/value

It is hoped that the findings put research on the broader implications of interactional justice in leader–follower interactions, and on gossip, on the research agenda of conflict researchers.

Details

International Journal of Conflict Management, vol. 25 no. 4
Type: Research Article
ISSN: 1044-4068

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Article

Xuan Lorna Wang and David Bowie

This paper aims to explore the links between revenue management and business‐to‐business (B2B) relationships and explains how revenue management can both support and…

Abstract

Purpose

This paper aims to explore the links between revenue management and business‐to‐business (B2B) relationships and explains how revenue management can both support and damage B2B relationships.

Design/methodology/approach

A single case study method was employed to conduct qualitative research into a company and its key accounts. In‐depth data were collected from three divergent sources (company revenue managers, company account managers and nine of the company's key accounts) through semi‐structured interviews, observations and document studies.

Findings

The research findings reveal that from the company's perspective, managers acknowledge that revenue management has positively influenced the process of identifying and analysing key account activities and conducting contractual decision making with key accounts. However, from the key accounts' perspective, revenue management practices were found to have significant negative consequences which damage trust and undermine long‐term relationships and commitment.

Research limitations/implications

Although the research findings cannot be generalised to other service sectors because of the single‐case study research method, the implications of this study suggest that the impact of revenue management practice on B2B relationships should be further investigated in a wide range of organisational and industry settings.

Practical implications

The research findings confirm the long‐held assumption that revenue management can negatively affect B2B relationships. The benefits of revenue management primarily reward the company, whilst long‐term B2B relationship development suffers from the short‐term consequences of the company's opportunistic behaviour.

Originality/value

This paper bridges the gap in the literature between revenue management and key account management. It also explores the conceptual incompatibility between revenue management and a long‐term relational approach to B2B relationships and provides evidence to support this proposition.

Details

Journal of Services Marketing, vol. 23 no. 1
Type: Research Article
ISSN: 0887-6045

Keywords

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