The authors investigate pricing strategies based on yield management systems (YMS), such as early discounting, overbooking, and limiting early sales, for capacity-constrained services. They find that YMS work best when price-insensitive customers prefer to buy later than price-sensitive consumers. The authors also identify other conditions favoring the use of YMS.
Get full access to this article
View all access options for this article.
References
1.
ArmbrusterWilliam (1995), “Forward Air Prepares 7.4 Percent Rate Increase,” Journal of Commerce, (January 26), Transportation Section, 2b.
2.
BelobabaP. Peter (1989), “Application of Probabilistic Decision Model to Airline Seat Inventory Control,” Operations Research, 37 (March-April), 183–98.
3.
BlattbergRobert, GlazerRashi, and LittleJohn, eds. (1994), The Marketing Information Revolution.Boston, MA: Harvard Business School Press.
BradAnca and SinghAjay (1996), “Path-Based Demand Forecasting at United Airlines,” presented at the Fall 1996 INFORMS Meeting, Atlanta, Georgia.
6.
BryantAdam (1992), “Many Companies Try to Simplify Pricing,” The New York Times, (October 18), 4:6.
7.
FeldmanJoan M. (1992), “The Price of Retribution: American Airlines’ Fare Cuts, Coming on Top of Restructuring, Contributed to the Industry's Summer of Big Losses,” Air Transport World, 29 (December), 54.
8.
GlazerRashi (1991), “Marketing in an Information-Intensive Environment: Strategic Implications for Knowledge as an Asset,” Journal of Marketing, 55 (October), 1–20.
9.
HarrisFrederick H. and PeacockPeter (1995), “Hold My Place, Please,” Marketing Management, 4 (Fall), 34–46.
10.
HeusleinWilliam (1993), “Carl Icahn Is Out. Can Al Checchi and Gary Wilson Be Far Behind?” Forbes, (January 4), 178.
11.
JohnsonEugene M. (1964), An Introduction to Service Marketing Management.Newark, DE: University of Delaware.
12.
KarmarkarUday S. (1996), “Integrative Research in Marketing and Operations Management,” Journal of Marketing Research, 33 (May), 125–27.
13.
KimballJames G., LawrenceJennifer, ShawRussell, TeinowitzIra, and PesmenSandra (1994), “The Top 100,” Business Marketing, (October 3), 57.
14.
KimesSheryl E. (1989), “Yield Management: A Tool for Capacity-Constrained Service Firms,” Journal of Operations Management, 8 (October), 348–63.
15.
LiebermanWarren H. (1993), “Debunking the Myths of Yield Management,” Cornell Hotel & Restaurant Administration Quarterly, 34 (February), 34.
16.
LodishLeonard M. (1980), “Applied Dynamic Pricing and Production Models with Specific Application to Broadcast Spot Pricing,” Journal of Marketing Research, 17 (May), 203–11.
17.
ParasuramanA. and VaradarajanP. Rajan (1988), “Future Strategic Emphases in Service Versus Goods Businesses,” Journal of Services Marketing, 2 (4), 57–66.
18.
RadasSonja and ShuganSteven M. (1998a), “Seasonal Marketing and Timing New Product Introductions,” Journal of Marketing Research, 35 (August), 296–315.
19.
RadasSonja and ShuganSteven M. (1998b), “Managing Service Demand: Shifting and Bundling,” Journal of Services Research, 1 (August), 47–64.
20.
RustRoland T., ZahorikAnthony J., and KeininghamTimothy L. (1995), “Return on Equity (ROQ): Making Service Quality Financially Accountable,” Journal of Marketing, 59 (April), 58–70.
21.
ShuganSteven M. (1994), “Explanations for the Growth of Services,” in Service Quality: New Directions in Theory and Practice, RustRoland T. and OliverRichard L., eds. Newbury Park, CA: Sage Publications, 223–240.
22.
SmithBarry C., LeimkuhlerJohn F., and DarrowRoss M. (1992), “Yield Management at American Airlines,” Interfaces, 22 (January-February), 8–31.
23.
SnowCharlotte (1996), “New Supply Deals Strive for Simplicity,” Modern HealthCare, (October 28), 49.
