This book focuses on pricing techniques that enable firms to enhance their profits. This book, however, cannot provide a complete recipe for success in marketing a certain product as this type of recipe, if it existed, would depend on a very large number of factors that cannot be analyzed in a single book. However, what this book does offer is a wide variety of pricing methods by which firms can enhance their revenue and profit. Such pricing strategies constitute part of the field called yield management. As explained and discussed in Section 1.3, throughout this book we will be using the term yield management (YM) to mean profit management and profit maximization, as opposed to the more commonly used term revenue management (RM).

Services, Booking Systems, and Consumer Value

Before we discuss pricing techniques, we wish to characterize the “output” that firms would like to sell. Therefore, Subsection 1.1.1 defines and characterizes the type of services and goods for which YM turns out to be most useful as a profit-enhancing set of tools. Clearly, this book emphasizes services that constitute around 70% of the gross domestic product of a modern economy. Subsection 1.1.2 identifies dynamic industry characteristics that make YM pricing techniques highly profitable. These characteristics highlight the role of the timing under which the potential consumers approach the sellers for the purpose of booking and purchasing the services sellers provide. Subsection 1.1.3 discusses the difficulty in determining consumer value and willingness to pay for services and products.