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Course Description

Segmenting your customer base is critical to developing a variable pricing scheme. By identifying core groups of customers and their purchasing habits, you can target them accordingly by setting prices that will help you win their business over your competition. Without proper segmentation, however, dynamic pricing can backfire, which can alienate consumers and turn them into perpetual deal-seekers.

This course expands upon the central concepts in revenue management—RevPAR (Revenue Per Available Room) and RevPASH (Revenue Per Available Seat Hour)—with the goal of selling the right room or reserving the right table for the right person at the right time. Get your organization properly managing inventory and using market-based pricing to maximize revenue.

If you can achieve a workable segmentation and variable pricing scheme, you won't need to adjust prices as often. Many hotels and hospitality organizations have used stable prices to create a marketing advantage, by providing stable rates for customers who appreciate consistency. Finding the right mix in variability and stability in pricing, and setting upgrade policies, are what generate repeat business from happy customers and create an environment for sustained profitability.

You are required to have completed the following courses or have equivalent experience before taking this course:

  • Price and Inventory Controls
  • Price Sensitivity and Pricing Decisions

Faculty Author

Chris K. Anderson, PhD, Associate Professor, Operations Management

Benefits to the Learner

  • Make smart pricing decisions based on market segmentation
  • Evaluate the relationship between segmentation and discounting
  • Understand variable versus dynamic pricing
  • Predict the diluting impact of poor segmentation
  • Use inventory management, price optimization and market-based pricing techniques
  • Develop an upgrade policy, and evaluate its marginal value

Requirements

Please note that SHA543: Segmentation and Price Optimization contains a graded project (Track Variable and Dynamic Pricing) that requires students to collect data from online sources over eight (8) consecutive days. Students should consider this requirement when scheduling their enrollment.

Target Audience

This course is designed for general managers, revenue and finance managers, operations, sales, marketing and other hospitality professionals who are responsible for the financial performance of their organization. Professionals with at least 3 years of experience in their industry will see the greatest benefits. This course provides advanced instruction in revenue management and teaches the industry-critical skills and advanced techniques used by top performers the world over.
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Cornell University's School of Hotel Administration
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