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yield management
Yield management is a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, perishable resource (such as airline seats or hotel room reservations or advertising inventory).〔Netessine, S. and R. Shumsky (2002), "(Introduction to the Theory and Practice of Yield Management )" INFORMS Transactions on Education, Vol. 3, No. 1〕 As a specific, inventory-focused branch of revenue management, yield management involves strategic control of inventory to sell it to the right customer at the right time for the right price. This process can result in price discrimination, where a firm charges customers consuming otherwise identical goods or services differing prices for doing so. Yield management is a large revenue generator for several major industries; Robert Crandall, former Chairman and CEO of American Airlines, gave yield management its name and has called it "the single most important technical development in transportation management since we entered deregulation." 〔Cross, R. (1997) Revenue Management: Hard-Core Tactics for Market Domination. New York, NY: Broadway Books.〕
==Definition==
Yield management has become part of mainstream business theory and practice over the last fifteen to twenty years. Whether an emerging discipline or a new management science (it has been called both), yield management is a set of yield maximization strategies and tactics meant to improve the profitability of certain businesses that focus on yield. It is complex because it involves several aspects of management control, including rate management, revenue streams management, and distribution channel management, just to name a few of them. Yield management is multidisciplinary because it blends elements of marketing, operations, and financial management into a highly successful new approach. Yield management strategists frequently must work with one or more other departments when designing and implementing yield management strategies.〔Revenue Management. Maximizing Revenue in Hospitality Operations. Dr. Gabor Forgacs, 2010. Pg. 3. Published by the Americans Hotel and Lodging Educational Institute, (), ISBN 978-0-86612-348-8〕
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