Price Optimization and Revenue Management

Pricing has ever been one of the most important profit drivers for providers of goods and services. But in today's e-business environment, there is an increasing number of unlocked opportunities to increase profits through price differentiation and customization. In face of this growing sophistication and given the current abundance of customer data and increasing competitive pressures, pricing decisions are getting more and more complex calling for managerial decision support tools. Such tools allow to simultaneously take into account the key profit drivers such as customer and competitor reactions, as well as costs. Moreover, thinking beyond the typical functional boundaries one easily understands that the effectiveness of a pricing strategy is highly interrelated with operational and resource constraints and must be carefully aligned with operations decisions in order to effectively match supply and demand. But due to these challenges, few firms have implemented a systematic pricing process based on rigorous analysis, and many companies leave millions of dollars on the table every year due to sub-optimal pricing practices.

“For outside observers, pricing may often seem like an art. And in fact, a creative potential is required to think conceptually beyond current pricing strategies and to build new models – but finally, the most important pillar of smart pricing is science – including systematic data analysis, forecasting, and powerful optimization that allows to take all market- and operations-related profit drivers simultaneously into account.”

Ouote from Prof. Dr. Cornelia Schön, GISMA Business School, Professor of Operations Management

Topics are: Knowing your customer, value-based pricing, price differentiation, forecasting, costs-competitors-cannibalization, be creative: price strategy & structure, marketing-operations interface, price optimization & revenue management, software solutions, unlocked pricing opportunities in the information age, product line pricing, service pricing: pricing intangibles