Question

traditional yield management strategies are most appropriate when?

A. The service providers has a homogeneous target market

B. Its target market is not price sensitive

C. All members of the target market arrive at basically the same time

D. Those who arrive early or reserve early are more price sensitive than those who reserve or arrive late

E. All of the target market is equally price sensitive

Answer 1

Ans:- (d) Those who arrive early or reserve early are more price sensitive than those who reserve or arrive late.

Yield management strategy is all about selling the right product or service at the right price and time to the right customer. Here right price refers to the willingness of different customers to pay differently based on their budget for the same product. On the other hand, right time defines the value of a product or services with time as most of the prices of products increases or decreases with time. So it is very important to sell the product before it loses its value or prices with time and if the value of a product increases with passing time, it would be apt for companies to wait till the price increases. So, It is the most appropriate strategy to yield maximum profits from a fixed 'perishable' product or resource by influencing consumer behaviour with. for eg, hotel rooms, flight tickets, restaurants booking etc where the best timing to sell a product or service is coordinated with its prices and the consumers' buying pattern in order to maximise profits.