Cutting costs or enhancing revenues? An example of a multi-product firm with impatient customers illustrates an important choice facing operational researchers

Bell, Peter C.; Chen, J.

doi:10.1057/palgrave.jors.2602012

Cited by 13 publications

(4 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Many approaches can be used to segment the market. For example, Bell and Chen () proposed segmentation through delivery option, that is, the customer will be charged a higher price for quick delivery or a lower price for slower delivery. The product can also be sold with different prices in each market segment if the segments can be distinguished by a specific product or consumer characteristic.…”

Section: Introductionmentioning

confidence: 99%

Enhancing revenue by offering a flexible product option

Chen

Bell

2016

Int Trans Operational Res

View full text Add to dashboard Cite

We examine a revenue-enhancing opportunity for perishable products that face demand uncertainty with fixed capacity and limited product options, and where customers have distinct preferences in product selection. We use an airline as an example of such products in this paper. An airline provides several product options for customers, as it operates multiple flights between the same origin-destination at different times of the same day. We consider customers with a strong preference for a specific flight and introduce a segment of customers who are flexible with their travel plans and have no specific flight preference on that day. We find that under some circumstances, the airline offering the flexible ticket to attract price-sensitive, flexible customers will enhance revenues. We investigate the optimal number of seats to reserve from the flights for the various fare classes and the fare for the flexible ticket. The implications of this research for the product with market disruption are also discussed.

show abstract

Section: Introductionmentioning

confidence: 99%

Enhancing revenue by offering a flexible product option

Chen

Bell

2016

Int Trans Operational Res

View full text Add to dashboard Cite

show abstract

“…Additionally, the authors argue that it would be more realistic to assume that the infiltration fraction would depend on the difference in price levels between segments. Discussions of the effects of market segmentation with demand leakage on a firm's price decision are also found in Bell and Chen (2006), Zhang and Bell (2007), etc.…”

Section: Optimal Market Segmentation and Infiltrationmentioning

confidence: 98%

Marketing research and revenue optimization for the cruise industry: A concise review

Sun

Jiao

Tian

2011

International Journal of Hospitality Management

125

View full text Add to dashboard Cite

“…For example, Dickson and Ginter (1987) studied on the segmentation based on product differentiation as well as the availability of strategic options; Wind (1978) worked on the buying behavior and Fogliatto and da Silveira (2008) proposed a method for designing choice menus. Meanwhile, market segmentation offers an opportunity to price differentially in each market segment to enhance profits (Bell and Chen, 2006). In recent years, differential pricing is usually used to segment market and improve profits that are usually based on different customer preference in retailing.…”

Section: Literature Reviewmentioning

confidence: 99%

Improving the profit by using a mixed after-sales service as a market segmentation

Sun

Tian

Yan

et al. 2019

NBRI

View full text Add to dashboard Cite

Purpose This paper aims to study the mixed after-sales service which simultaneously offers return and replacement services. The authors develop a model to propose what kind of after-sales service the firm should choose and how to make the after-sales service policy to improve the profit. The study aims to extend the literature on the mixed after-sales service and give some support to the managers to make decisions. Design/methodology/approach In this paper, the authors use the optimization modeling method to describe the situations of a firm offering two exclusive after-sales service policies and a mixed after-sales service policy, respectively. They compare the results in different cases and analyze the impact of different parameters on the boundary values and other results. Finally, the authors include three numerical examples to illustrate the major results. Findings The authors find that the mixed after-sales service can successfully segment the market, meet various customers’ distinct needs and differentiate the service prices to improve the total profit. Moreover, the authors find the boundary values which indicate the optimal interval for each service. Then, for a certain situation, they can clearly tell which after-sales service dominates and provides the optimal selling price, order quantity and total profit. Besides, the authors show the impact of different parameters on the boundary values and other results. Originality/value This paper combines after-sales service into traditional models and provides a new mixed service to segment the market and improve total revenue. It provides some managerial implications for the decision-makers.

show abstract

Cutting costs or enhancing revenues? An example of a multi-product firm with impatient customers illustrates an important choice facing operational researchers

Cited by 13 publications

References 4 publications

Enhancing revenue by offering a flexible product option

Enhancing revenue by offering a flexible product option

Marketing research and revenue optimization for the cruise industry: A concise review

Improving the profit by using a mixed after-sales service as a market segmentation

Contact Info

Product

Resources

About