Examples of Yield Manager hubs
Two examples of business enterprises that have adopted the Yield Manager hub model are listed below.
- An enterprise that allows transportation and logistics professionals to buy, sell, manage, and evaluate their company's logistics activities by automating and simplifying the processes of moving and managing goods worldwide.
- An enterprise that brings together media verticals, ranging from
in a single marketplace. It may offer services including real-time pricing flexibility and integration of analysis, planning, buying, transaction, trafficking, documentation, and billing.
- online to television,
- print, and
Yield management is very well suited for service firms. We will review a few characteristics that make yield management efficient.
Relatively Fixed Capacity
The reason for this characteristic is very simple. If capacity were flexible, there would be no need for a tradeoff.
If airlines could add or remove seats or aircraft at will, there would be no reason to try to manage capacity. Unfortunately, the plane cannot be enlarged, the only flexibility allowed is to schedule the passenger on a later flight.
Ability to Segment Markets
Since one of the purposes of yield management is to smooth the distribution of passengers, to be effective, the airline must be able to segment its market into different passenger categories. Keeping in mind that we seek a tradeoff between maximum load factor and highest paying passengers, a very good example is the comparison between the time-sensitive business person and the price-sensitive customer.
One is willing to pay a higher fare in exchange for flexibility the other is willing to give up some flexibility for the sake of a cheaper ticket. Such a strategy allows airlines to fill seats that would otherwise be empty.