Marketing the Right Price (Course delivered in the morning)

The course Dynamic Pricing and Revenue Management focuses on how a firm should set and update pricing and product availability decisions in order to maximize its profitability.

The adoption of Dynamic Pricing and Revenue Management has transformed the transportation and hospitality industries, and is increasingly important in retail, telecommunications, entertainment, financial services, health care and manufacturing. Dynamic Pricing is based on a price discrimination consisting in offering either the same product at different prices (seats on an airline for instance) or similar products at different right price (small, medium, tall cup of coffee).

These sophisticated marketing practices require advanced market segmentation, and some means to discourage discount customers from becoming resellers and, by extension, competitors. Revenue Management derives its justification in a segmentation based on the purchasing power of consumers, their specific characteristics as regards price elasticity, and time sensitivity.

The main objective of Revenue Management is the adjustment by the price, i.e. managing the quantitative supply allocated to each segment according to its price sensitivity through simultaneous action on tariffs and available capacity.