Yield Management

A profit maximization technique that makes strategic price adjustments to a product or service with a fixed expiration date.

Deeper Insights

Practicing yield management has become a popular pricing technique over the past 15-20 years. Airlines are notorious for implementing yield management. They offer low prices for those that book in advance, raise prices as the departure date approaches, and if it seems like the seat will remain unbooked, the prices drop again. This is all done in an effort to maximize profit.

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Related Keywords: Revenue OptimizationPerceived ValuePrice ElasticityPricing Strategy