Segmentation, Revenue Management and Pricing Analytics

Segmentation, Revenue Management and Pricing Analyticsintroduces the concepts and quantitative methods available for improving profit through smarter capacity allocation and pricing. In particular, proven techniques are provided for analyzing historical sales data to determine customer segments that exhibit significant differences in their price elasticities. Once identified, techniques are provided on how to determine the optimal capacity allocation or price for each segment. This book uses historical sales data with mathematical optimization to set and update capacity (or prices) offered through various channels in order to maximize profit. A familiar example is the passenger airline industry, where a carrier may sell the same type of seats (for example, coach) on the same flight to different customer segments at different prices. These practices have transformed the transportation and hospitality industries, and are increasingly important in industries as diverse as retail, telecommunications, banking, health care and manufacturing. The aim of this book is to guide students and professionals on how to identify and exploit revenue management and pricing opportunities in different business contexts.