Chapter 8

Revenue Management Techniques

Companies seeking to manage their revenue function may use a variety of techniques to accomplish their goal of increased revenue with sustainable profit improvement. This chapter discusses several of these approaches.

Sale or Promotional Pricing (or Discounting)

Occasional price reductions such as sale prices or special promotions are a common revenue management technique. A price reduction is offered to stimulate demand. The price reduction is temporary, and at the end of the promotion, prices will return to normal levels. This characteristic distinguishes a sale or promotion from a markdown, discussed later.

These price reductions may be offered regularly at certain times that have low demand, such as ...

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