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Review of the article Price-Future of Revenue Management

Review of the article Price-Future of Revenue Management

Shoemaker provides sufficient evidence for drawn conclusion; inclusion of illustrations, real industries and uses statistical evidence from the opinion of various consumers to support his opinions. Shoemaker shows the value of the research by relating the issues to the positive and negative effects possessed. The author provides examples of companies that manage to maintain customer loyalty and on the other hand, managing their revenues effectively (for example, Harrah entertainment). Moreover, the author provides essential information in pricing managers for use in examination of the different components of value. The varied options are connected to the different relevant situations they are best applicable. Besides, the profit and shortcomings of each of these strategies are offered. For instance, the lowering of prices is said to affect brand image, therefore, making the increase of prices difficult. Hence, relevance of balance between value, revenue management and customer loyalty are fundamental (Shoemaker, 2003).

Shoemaker’s article takes the structure of a customer oriented discussion that mainly focuses on the effects of prices on customer loyalty. In the first part of his article, He expresses how customer loyalty improves the business through recommendations and continued sales despite price changes. He shows the relevance of all his principal points with regard to the overall marketing mix (Shoemaker, 2003). He describes the factors that are considered by customers excluding low price; financial, functional, experiential etc. On the other hand, negative revenue management effect on customer loyalty is also described.

It is for this reason that the author’s performance can be rated as good. This is because besides highlighting the relationship between customer loyalty and good revenue management. It is evidenced by the purchase of the Hilton Corporation by the Blackstone group in 2007. In turn, they were able to buy the hotel’s database of loyal customers (Shoemaker, 2003).

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