Blair, Montgomery; Anderson, Chris K.
Revenue management has experienced tremendous growth since its inception in the airline industry. The practice of dynamically pricing a perishable product across different market segments continues to be applied across an ever-increasing set of business arenas. The proliferation of revenue management can be attributed to its microeconomic foundations (grounded in supply and demand), as well as the numerous well-cited success stories (American Airlines, National Car Rental) and failures (People’s Express) that follow from its application or lack thereof. The continued success of revenue management hinges upon the ability to link organizational performance to the pricing and capacity decisions of revenue management systems. This link both reinforces the financial gains attributable to revenue management and indicates opportunities for future improvement. This paper outlines Performance Monitor, a phased approach to performance measurement designed and implemented at Dollar Car Rental. We also present and discuss some examples of Phase I, which is currently in use.
revenue management; pricing; dynamic pricing; decision support; performance measurement; yield management
Required Publisher Statement: © Palgrave-MacMillan. Final version published as: Blair, M., & Anderson, C. K. (2004). Performance monitor. Journal of Revenue & Pricing Management, 1(1), 57-66.