Description: Yield management is a pricing strategy that aims to maximize revenue by adjusting prices according to demand. This technique relies on data collection and analysis to predict consumer behavior and optimize resource allocation. Essentially, yield management allows companies to adjust their prices in real-time, considering factors such as product availability, competition, and market trends. This practice is particularly relevant in industries where supply is limited and demand can fluctuate, such as hospitality, air transport, and events. Yield management not only focuses on pricing but also on market segmentation, allowing companies to offer different prices to different customer groups, thereby maximizing their revenue. Automation with artificial intelligence (AI) and robotic process automation (RPA) has revolutionized this area, enabling companies to process large volumes of data and make more informed and faster decisions. In summary, yield management is a key tool for companies looking to optimize their revenue and improve their competitiveness in a dynamic market environment.
History: Yield management originated in the airline industry in the 1980s when airlines began using dynamic pricing techniques to maximize their revenue. With advancements in technology and data availability, this practice expanded to other industries such as hospitality and car rentals. Over the years, yield management has evolved, incorporating more sophisticated analytical tools and artificial intelligence algorithms to improve the accuracy of demand predictions.
Uses: Yield management is primarily used in industries where supply is limited and demand can vary, such as hospitality, air transport, car rentals, and event ticket sales. Companies apply this strategy to adjust prices based on demand, optimize occupancy, and maximize revenue per customer. It is also used in retail to manage inventory and product pricing.
Examples: An example of yield management is the use of dynamic pricing by airlines, which adjust their fares based on demand and seat availability. Another case is that of hotels, which can raise their rates during peak seasons or special events. Additionally, ticket sales platforms like Ticketmaster use this strategy to maximize revenue for concerts and sporting events.
