The evolution of market segmentation in revenue management and dynamic pricing
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Market segmentation techniques have played an extraordinarily important role in successful revenue management programs. For example, purchase fences allowed companies to sell a single product at multiple prices, simultaneously, to customers that self-selected into different customer segments, based on willingness-to-pay. As revenue management expanded to more industries, new approaches to market segmentation became possible. The financial benefits associated with successful implementations have been extraordinary. This article discusses how market segmentation techniques have evolved in support of revenue management and dynamic pricing practices and what companies and customers may be able to look forward to in the future.
Keywordsrevenue management Value Pricing market segmentation self-storage dynamic pricing
The author would like to express his appreciation to Scott Nason, former VP, Revenue Management for American Airlines for his insightful comments and feedback as well as his colleagues Bruce Patty and Jim Mullin at Veritec Solutions for their suggestions.
- Bodea, T. and Ferguson, M. (2014) Segmentation, Revenue Management, and Pricing Analytics. New York: Routledge.Google Scholar