An approach to offer management: maximizing sales with fare products and ancillaries
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With the growth in ancillary sales, an area of increasing importance for airlines is the concept of offer management, which entails the creation of dynamic, custom, personalized offers consisting of a flight itinerary and ancillary products offered by an airline. This practice-oriented, overview paper provides an end-to-end, future-oriented framework for determining the composition of optimal base fare and ancillary bundles by customer trip-purpose segment followed by 1:1 personalization to maximize total sales. Our focus in this paper is primarily on the proposed offer management framework and its sub-components.
KeywordsRevenue management Ancillary products Willingness-to-pay Bundles Customer segmentation Personalization Controlled experiments
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