Publication Date

8-2001

Abstract

[Excerpt] A successful yield-management strategy is predicated on effective control of customer demand. Businesses have two interrelated strategic levers with which to accomplish this, namely, pricing and duration of customer use. Prices can be fixed (one price for the same service for all customers for all times) or variable (different prices for different times or for different customer segments) and duration can be predictable or unpredictable.

Variable pricing to control demand is conceptually a straightforward process. It can take the form of discount prices at off-peak hours for all customers (such as low weekday rates for movies) or it can be in the form of price discounts for certain classes of customers (such as senior discounts at restaurants).

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© Cornell University. Reprinted with permission. All rights reserved.

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