Revenue Management

Definition of Revenue Management

The practice of optimizing financial performance by strategically managing pricing and inventory.

Explanation of Revenue Management

Revenue management is a strategic approach used by businesses to maximize their revenue by effectively managing pricing, inventory, and sales strategies. It involves analyzing data and market trends to make informed decisions about pricing, product availability, and distribution channels. For example, airlines and hotels use revenue management techniques to adjust prices based on demand, booking patterns, and competitive pricing. This approach helps businesses optimize their revenue by selling the right product to the right customer at the right time and price. Revenue management requires a deep understanding of customer behavior, market dynamics, and operational costs. By implementing effective revenue management strategies, businesses can improve their profitability, enhance customer satisfaction, and gain a competitive advantage. This practice is commonly used in industries with fixed capacities and fluctuating demand, such as travel, hospitality, and entertainment.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.