Table of Contents

Chapter 1 - The Strategy of Pricing. 1

Limit Pricing. 1

Penetration Pricing. 2

Price Leadership. 3

Price Follower. 4

Price Skimming. 4

Approaches to Price Setting. 5

Cost-Based Pricing. 5

Market-Based Pricing. 6

Value-Based Pricing. 6

Review Questions. 8

Chapter 2 - Revenue Management Tactics. 9

Optimal Conditions for Revenue Management 9

Foundational Concepts. 10

Price Setting. 10

The Applicability of Variable Costs. 11

Price Elasticity of Demand. 12

Discounts vs. Premiums. 13

Costs of Revenue Management Activities. 14

Revenue Management Tools. 15

Bundling and Unbundling Concepts. 15

Channel-Based Pricing. 15

Commitment Fees. 16

Concession-Based Pricing. 16

Coupons. 16

Credit Card Fee Pass-Through. 16

Customer Reward Programs. 17

Disposition Pricing. 17

Dynamic Pricing. 17

End-of-Transaction Price Adjustments. 18

Excess Inventory Pricing. 19

Experiential Pricing. 19

Feature Subtraction Pricing. 19

Free Pricing Where the Customer is the Product 19

Free Pricing with Add-Ons. 19

Gross Margin-Based Pricing. 20

Markdown Pricing. 20

Need-Based Pricing. 21

Overbooking. 21

Package-Based Pricing. 22

Product Linkages. 22

Pricing Based on the Anchoring Effect 22

Product Line Pricing. 22

Queue-Jumping Pricing. 23

Reference Pricing. 23

Relative Pricing. 23

Special Event Pricing. 23

Special Financing. 23

Unlimited Use Pricing. 24

Upselling. 24

Utilization-Based Pricing. 24

Utilization of Over-Capacity. 25

Volume Pricing. 25

Discount Protection. 25

Other Issues Impacting Revenue. 28

The Impact of Capacity on Revenue. 28

The Impact of Customer Churn on Revenue. 30

Hotel-Specific Revenue Management Tactics. 30

Menu Engineering. 31

Revenue Management Complications. 33

The Need to Eliminate Customers. 34

Responsibility for Revenue Management 35

Revenue Management Assessment 35

Long-Term Effects of Revenue Management 36

Review Questions. 38

Answers to Chapter Questions. 39

Glossary. 43

Index. 46

 

Final Examination…………………………………………………………………………………………………48