INSEAD Library

Includes bibliographical references and index

Digitized

The Pricing and Revenue Management of Services A Strategic Approach Contents List of figures List of tables List of boxes Preface Acknowledgements Chapter synopses 1 Introduction Service pricing in practice 1 The study of pricing 4 The importance of the service sector 7 Definition of service 9 Service pricing -- issues and challenges 11 Service characteristics impact on pricing 13 The cost-plus approach in pricing 16 Complexity of service pricing 18 PART I The buyer as an individual 2 The expected net value (ENV) framework Buyer choice 23 The ENV framework 26 Conclusion 39 3 Advanced purchase and the separation of purchase and consumption Risk at the point of purchase: valuation risk 42 Risk at the point of purchase: acquisition risk 46 xii xiv xv xvi xix xx 1 21 23 41 Bringing acquisition and valuation risks into the ENV framework 48 The marketing mix and its role in delivering net value 49 Competition: its influence on the ENV 53 Random components of choice 56 The expectations of service customers 62 Understanding the strategic nature of ENV 66 Trading off benefits and outlays 68 4 Seven strategies for higher revenues Strategy 1: price on value, not cost 70 Strategy 2: convent pareto loss into revenue 72 Strategy 3: decouple purchase (exchange) and consumption 76 Strategy 4: mitigate risk in valuation for advance purchase 78 Strategy 5: change the benefits 79 Strategy 6: customer effort could yield higher revenue 81 Strategy 7: find the highest end-value in intermediating services 85 Conclusion 87 PART II Buyers in aggregate 5 The economics of pricing in services The demand function 91 Understanding price elasticity 93 The role of supply and capacity 96 Price discrimination 101 Advanced selling, demand and price discrimination 104 Dynamic pricing 105 6 The revenue management of services 108 Introduction to revenue management 108 The evolution and scope of revenue management 113 Revenue management and advanced demand behaviour 116 Revenue management practices and tools 120 Competition and revenue management 124 Fairness and revenue management 125 7 Strategic pricing and revenue management: four more strategies for higher revenue 129 The ability to practise revenue management 129 89 91 70 The new revenue management system 130 The role of capacity 133 Strategy 8: re-segment, re-design and re-price 137 Strategy 9: segmenting and pricing through selfselection 142 Strategy 10: managing demand and supply through re-sale and refunds 145 Strategy 11: selling availability of the service 147 8 Conclusion Strategise with care: the need to understand how buyers and stakeholders view service pricing strategies 149 Service pricing vs goods pricing 149 More channels, more segments, more brands 151 Cross-functional approach towards pricing policies 151 Notes Index 149 153 169