[ad_1]
NITTY-GRITTY OF REVENUE MANAGEMENT

Introduction
Revenue management was first adopted by the airline industry but is now used in various industries such as manufacturing, advertising, energy, telecommunications, retail, and more. Companies which ignore revenue management will face competitive disadvantages.

What is Revenue Management?
Revenue management is a concept of emerging and changing business strategy that helps companies generate additional revenue of 3% to 8%, leading to a profit increase of 50% to 100%. Revenue management involves using exercised strategy to precisely predict consumer behavior at a micro-market level and making the most of product availability and price to maximize revenue growth.

Features of Revenue Management
Revenue management uses solid management science with statistical and mathematical concepts based on operations research and management science methodology and tools. It provides decision-support for various purposes such as pricing, advertising, sales, distributing, capacity planning, and more.

Challenges of Revenue Management
In fast changing supply and demand circumstances, the challenges faced by revenue management involve predicting and assigning capacity/resources for high revenue/profit customers and products, optimizing capacity employment and revenue realization, reworking capacity/resource allocations to optimize revenues based on demand, maximizing overbooking to lessen service failure costs, distinguishing product arrangement to maximize revenues, and changing capacity/resources to compete in the long term.

Adopting the Right Method of Revenue Management
Revenue management is essential for companies as it offers strategic, competitive, and financial rewards. However, the execution of revenue management systems has been difficult and costly. To reduce the pain related to revenue management, companies should opt for open systems, a flexible framework, a phased execution approach, a front-end platform, and should prioritize demand forecasting and pricing.

Conclusion
In conclusion, revenue management is a concept that allows companies to sell the “right product to the right customer, at the right price, at the right time.” A well-executed revenue management plan can lead to financial success for businesses across various industries.
[ad_2]

Ihab Salloum