Segmentation and Price Optimization
Segmenting the customer base is critical to developing a variable pricing scheme. By identifying core groups of customers and their purchasing habits, managers can target them accordingly by setting prices that will help them win business over their competition. Without proper segmentation, however, dynamic pricing can backfire, which can alienate consumers and turn them into perpetual deal-seekers.
This course expands upon the central concepts in revenue management—RevPAR (Revenue Per Available Room) and RevPASH (Revenue Per Available Seat Hour)—with the goal of selling the right room or reserving the right table for the right person at the right time. Participants will be able to get their organization to properly manage inventory and use market-based pricing to maximize revenue.
If participants can achieve a workable segmentation and variable pricing scheme, they won’t need to adjust prices as often. Many hotels and hospitality organizations have used stable prices to create a marketing advantage, by providing stable rates for customers who appreciate consistency. Finding the right mix in variability and stability in pricing, and setting upgrade policies, are what generate repeat business from happy customers and create an environment for sustained profitability.
Who Should Take this Course?
This course is designed for general managers, revenue and finance managers, operations, sales, marketing and other hospitality professionals who are responsible for the financial performance of their organization. Professionals with at least 3 years of experience in their industry will see the greatest benefits. This course provides advanced instruction in revenue management and teaches the industry-critical skills and advanced techniques used by top performers the world over.
Participants who complete this course will be able to…
- Make smart pricing decisions based on market segmentation
- Evaluate the relationship between segmentation and discounting
- Understand variable versus dynamic pricing
- Predict the diluting impact of poor segmentation
- Use inventory management, price optimization and market-based pricing techniques
- Develop an upgrade policy, and evaluate its marginal value
Module 1 - Variable Prices and Segmentation
- Price Discrimination and Customization
- Auditorium Pricing
Module 2 - Dynamic Pricing and Price Optimization
- Variable Pricing Versus Dynamic Pricing
- Strategic Consumer Behavior
- The Challenges of Strategic Pricing
- Christopher Anderson, Professor, School of Hotel Administration