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A Masters in Marketing or MBA - Marketing Masters Programs and Schools
The Real-World and Education - for Marketing Students
There is nothing like real-world experience. You learn things that can't be taught in classrooms, nor learned in books. Well this isn't exactly true, so let's clarify. Real-world experience...
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Beware Of Job Fraud Scams!
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Ten Plus One Ideas That Just Might Get You Hired!
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A Definition Of Yield Management
Yield Management:
A yield management system, which can also be referred to as
revenue management, is a system that attempts to understand,
anticipate and then react to consumer behaviour in order to
maximise revenue/profit.
How Does Yield Management Work?
To acheive maximum revenue/profit, a yield management system
needs to have an understanding of what has happened before and
what is happening now; using this historical data to predict
what may then happen in the future. So the yield management
system will periodically review transactions that have occurred
between the consumer and the hotel. Other external information
is then fed into the yield management system and this can
include statistical data, events such as public holidays,
competitor price information, seasonal buying patterns, etc. A
predictive modeller then attempts to forecast the total demand
within a specific period for the services on offer by market
segment and price point.
In simple terms yield management tries to answer the question
"Given our operating constraints, what
is the best mix of
services for us to sell within a particular timeframe, so that
we generate the highest revenue?"
The process of yield management optimisation helps an
organisation to adjust its prices so that they meet the total
demand characteristics of its markets. In order to maximise the
revenue, prices can be determined by:
==> Service
==> Group of services
==> Market (consumer type or geographical)
==> A combination of the above
Yield management models are most effective where the service
being supplied is characterised as:
==> Capital intensive
==> Perishable (revenue is lost if the product/service is not
sold by a particular point in time)
and the demand side is characterised with:
==> Variability of demand
==> Variability of value
About the author:
Dominic Martin is the Marketing Manager for Data Track Communications
ltd, who are Europe's leading hotel guest telephony strategy
and Call Yield Management experts.
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