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Revenue management in the context of movie theaters: Is it fair?

  • Research Article
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Journal of Revenue and Pricing Management Aims and scope

Abstract

Certain industry characteristics (for example, a relatively fixed capacity, varying and uncertain demand, and perishable inventories) are a prerequisite for a successful implementation of revenue management (RM) practices. Although movie theaters have these characteristics, they have failed to try RM as a pricing strategy. The current study examines the joint impact of five potential RM practices (that is, rate fences) and framing effects (surcharge versus discount) on consumers’ price fairness perceptions. Several rate fences (morning-versus-noon, weekday-versus-weekend and time-of-booking-based pricing) received relatively high fairness ratings, whereas location-based and popularity-based pricing were perceived as less fair. In addition, framing ticket prices as a discount rather than a surcharge significantly improved customers’ price fairness perceptions. The findings of this study provide guidance for movie theater operators in their pursuit of optimal pricing.

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Authors and Affiliations

  1. Pennsylvania State University, University Park, USA

    Choongbeom Choi & Anna S Mattila

  2. University of Massachusetts, Amherst, USA

    Miyoung Jeong

Authors
  1. Choongbeom Choi
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  2. Miyoung Jeong
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  3. Anna S Mattila
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Correspondence to Choongbeom Choi.

Additional information

2, PhD, is an Associate Professor in the Department of Hospitality and Tourism Management, Isenberg School of Management, University of Massachusetts – Amherst.

3, PhD, is the Marriott Professor of Lodging Management at the School of Hospitality Management at the Pennsylvania State University.

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Choi, C., Jeong, M. & Mattila, A. Revenue management in the context of movie theaters: Is it fair?. J Revenue Pricing Manag 14, 72–83 (2015). https://doi.org/10.1057/rpm.2014.30

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  • DOI: https://doi.org/10.1057/rpm.2014.30

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