Yield management

The yield management [ ji ː ld ˌ mænɪdʒmənt ], often translated as yield management, is an instrument for the simultaneous and dynamic, usually computer-based price and capacity control.

In principle, it is the yield management is a special form of price discrimination. In contrast to the classical price discrimination, it varies the prices not only at the product level, but already for individual goods (not in a theater performance on Saturday -10 %, but: Presentation at 1:10 -15 % -5 % 8:10. . ). Another special feature is that it is based on quotas ( a theater releases of 100 places for 20 students, the rest is sold at the normal rate ). Where a quota is used up, the associated tariff is no longer available. What can appear at first sight somewhat unusual product allocation, is that such quotas can be linked not only to observable or verifiable criteria (student, club member), but also on behaviors (airline are 10 places for 1 € free and 15 for. half price first come, get the cheapest yet available rate - the outside it looks like when the prices would rise with time).

For the prediction of when each quota should have what output size, different statistical forecasting methods are used, which determine the expected demand on the basis of past data on consumer behavior. Due to the complexity of the task this is usually done with the aid of high-performance computer systems. In the event of incorrect predictions are additional secondary allocation mechanisms, for example, in high-demand capacity of lower tariffs redeploy to more expensive.

Yield management provides the basis for the budgeting and must be integrated into all marketing activities. Good yield management creates a uniform utilization even with highly fluctuating demand and maximize the total return of a power unit, even if the average prices may be lower than budgeted. It was originally developed by American Airlines during the deregulation of the aviation sector. Meanwhile appropriate techniques and systems are found in every major airline. Outside of the aviation sector yield management is mainly used in hotels, commercial transport and car rentals ( a generally suitable for service providers under certain conditions, an instrument of price policy).

A term that is often equated with yield management is revenue management. Whether this equation is justified in the literature is still controversial. The methods described are very similar in any case, although often the instruments of revenue management is described more extensive than it is the case with yield management.

  • Known input parameters capacity
  • Prices
  • Utilization
  • Demand
  • External factors (holidays, fairs)
  • Future demand
  • Cancellation rate
  • Unforeseen external factors