Yield Management: A Strategic Approach to Pricing

7 pages | 1690 words

Yield management is a strategic approach to pricing whereby businesses set flexible prices for products or services that are perishable and heterogeneous, in order to maximise revenue. The main aim of yield management is to sell the right product, to the right customer, at the right time, at the right price. In order to achieve this, organisations need to have a clear understanding of their customers' needs and wants, as well as their own business goals. Furthermore, they need to be able to identify patterns in customer behaviour and be reactive in their pricing strategy. This means that businesses must have real-time access to data and be able to respond quickly to changes in market conditions. Yield management is a relatively new concept, having only been developed in the late 20th century. However, it has quickly become an essential tool for businesses operating in