Yield Management

Definition of Yield Management

The practice of adjusting prices and availability of products to maximize revenue.

Explanation of Yield Management

Yield Management is a pricing strategy that aims to maximize revenue by adjusting prices based on demand, timing, and customer behavior. It is commonly used in industries with fixed capacities, such as airlines, hotels, and car rentals. Yield management involves analyzing historical data, market trends, and booking patterns to determine the optimal price for each product or service. By dynamically adjusting prices, businesses can fill capacity, attract different customer segments, and increase overall revenue. This strategy requires sophisticated data analysis and forecasting tools to predict demand and set prices accordingly. Yield management also involves segmenting customers based on their willingness to pay and offering different prices or packages to maximize revenue from each segment. Effective yield management helps businesses optimize their inventory, reduce waste, and enhance profitability. It requires continuous monitoring and adjustment to respond to market changes and customer behavior.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.