Revenue Management: A Strategy for Increasing Sales Revenue in Small Businesses

Authors

  • Jeff Shields University of Southern Maine

Abstract

Revenue management is a strategy used by companies in many industries to match products and services to customers in order to increase sales revenues. Although revenue management is well suited to meet some of the challenges of small businesses, there has been no prior research on its use in a small business setting. This paper presents the results from a survey of 76 small businesses on the use and effect of revenue management. The results demonstrate that revenue management is employed by small businesses and that it has a significant and positive effect on sales revenue. The results also reveal practices most commonly engaged in and the extent to which the strategy is applied by small businesses.

References

Berman, B. (2005). Applying Yield Management Pricing to Your Service Business. Business Horizons, 48, 169-179.

Boyd, E.A. & Bilegan, I. C. (2003) .Revenue Management and E-Commerce. Management Science, 49 (10), 1363-1386.

Carroll, WJ. & Grimes R.C. (1995). Evolutionary Change in Product Management: Experiences in the Car Rental Industry. Interfaces, 25(5), 84-104.

Chye, K.H. & Gerry, C.K.L. (2002). Data mining and Customer Relationship Marketing in the Banking Industry. Singapore Management Review, 24(2), 1-27.

Cross, R. (1997). Revenue Management: Hard-Core Tactics for Market Domination.

New York: Broadway Books.

Dillman, D.A. (2000). Mail and Internet Surveys: The Tailored Design Method (2nd ed.). New York: John Wiley & Sons, Inc.).

Elimam, A.A. & Dodin, B..M. (2001). Incentives and Yield Management in Improving Productivity of Manufacturing Facilities. HE Transactions, 33, 449-462.

Geraghty, M.K. & Johnson, E. (1997). Revenue Management Saves National Car Rental. Interfaces, (January-February), 107-127.

Graham, A.B. (1998). All for One and One for All. Forbes, (September), 24-28.

Harris, F. & Finder, J. (1995). A Revenue Management Approach to Demand Management and Order Booking in Assemble-To- Order Manufacturing. Journal of Operations Management, 13, 299-309.

Hormozi, A.M. & Giles, S. (2004). Data mining: A Competitive Weapon for Banking and Retail Industries. Information Systems Management, (Spring), 62-71.

Kimes, S.E. & Wirtz, J. (2002). Perceived Fairness of Demand-based Pricing for Restaurants. Cornell Hotel and Restaurant Administration Quarterly, (February), 31-37.

Kimes, S.E. & Chase, R.B. (1998). The Strategic Levers of Yields Management. Journal of Service Research, 1(2), 156-166.

Lieberman, W.H. (1993). Debunking the Myths of Yield Management. The Cornell Hotel and Restaurant Administration Quarterly, (February), 34-41.

Marmorstein, H., Rossomme, J., & Sarel, D. (2003). Unleashing the Power of Yield Management in the Internet Era: Opportunities and Challenges. California Management Review, 45(3), 147-167.

Marriott, J. Jr. & Cross, R. (1997). Room at the Revenue Inn. Chief Executive, (July), 54-57.

McGill, J.I., & Van Ryzin, J.G. (1999). Revenue Management: Research Overview and Prospects. Transportation Sciences, 33(2), 233-256.

Nunnally, J. (1978). Psychometric Theory (2nd ed.). New York McGraw-Hill Book Company.

Pineda, R.C., Lerner, L.D., Miller, M., & Phillips, SJ. (1998). An Investigation of Factors Affecting the Information-Search Activities of Small Business Manager. Journal of Small Business Management, 36(1), 60-71.

Secomandi, N., Abbott, K., Atan, T., & Boyd, E.A. (2002). From Revenue Management Concepts to Software Systems. Interfaces, 32(2), 1-11.

Smith, B.C., Leimkuhler, J.F., & Darro, R.M. (1992). Yield Management at American Airlines. Interfaces, 22(1), 8-31

Smelter, L.R., Fann, G.L., & Nikolaisen, V.N. (1988). Environmental Scanning Practices in Small Business. Journal of Small Business Management, 26(3), 55-62.

Talluri, K.T. & Van Ryzin, J.G. (2004). The Theory and Practice of Revenue Management. New York: Springer Science+Business Media Inc.

Tomplin, N. (1999). Property Report: Your Room Costs $250...No! $200... No... . Wall Street Journal, (May 5), B1.

Weatherford, L. & S. Bodily, (1992). A Taxonomy and Research Overview of Perishable-Asset Revenue Management: Yield Management, Overbooking, and Pricing. Operations Research, (September-October), 831-844.

Weigand, R.E. (1999) Yield Management: Filling the Buckets, Papering the House. Business Horizons, (September-October), 55-64.

Wenrauch, J.D., Mann, O.K., Robinson, P.A., & Pharr, J. (1991). Dealing with Limited Financial Resources: A Marketing Challenge for Small Firms. Journal of Small Business Management, 29(4), 44-54.

Downloads

Published

2005-05-20

Issue

Vol. 16 No. 2 (2005)

Section

Articles

License

The Journal of Small Business Strategy (the “Publisher”) and the Author(s) agree as follows:
 
1.Author(s) hereby grant to Publisher all right, title, and interest in and to the Work, including copyright to all means of expression by any method now known or hereafter developed, including electronic format. If Publisher does not publish the Work within two (2) years of the Effective Date, copyright shall revert back to the Author. Publisher agrees to always credit Author(s) as the author(s) of the Work.
 
2.Publisher hereby grants Author a royalty-free, limited license for the following purposes, provided the Work is always identified as having first been published by Publisher.
    •The right to make and distribute copies of all or part of the Work for use in teaching;
    •The right to use all or part of the material contained in the Work in a book by the Author(s), or in a collection of the Author(s)’s work;
    •The right to use and distribute the Work internally at the Author(s)’s place of employment, and for promotion and any other non-commercial purposes;
    •The right to use figures and tables from the Work for any purpose;
    •The right to make presentations of material from the Work;
    •The right to use and distribute the Work on the Author(s)’s Web site and on the Author(s)’s university’s institute repository;
Such license shall be effective when the Work is first published in the Journal of Small Business Strategy.
 
3.The Author(s) represents and warrants that the Work: (a) is the Author(s)’s original work and that Author(s) has full power to enter into this agreement; (b) does not infringe the copyright or property right of another; (c) contains no materials which is obscene, libelous, defamatory or violates another’s civil right, right of privacy, or is otherwise unlawful; and (d) has not been previously published, in whole or in part. Author(s) shall indemnify and hold Publisher harmless against loss or expenses arising from breach of any such warranties.

How to Cite

Revenue Management: A Strategy for Increasing Sales Revenue in Small Businesses. (2005). Journal of Small Business Strategy (archive Only), 16(2), 43-54. https://libjournals.mtsu.edu/index.php/jsbs/article/view/50