The Effects of Customer-Centric Marketing and Revenue Management on Travelers’ Choices

Abstract

This article examines how the simultaneous use of customer-centric marketing (CCM) and revenue management (RM) affects travelers' perceptions of fairness and ultimately their purchasing choices. To address this issue, we propose and empirically test a choice model that incorporates reference-dependent fairness adjustments for both price and nonprice attributes within a random utility framework. The findings from two empirical studies using stated-preference choice experiments show that travelers engage in fairness-related reference point comparisons for price and other product attributes induced by RM and CCM. They offer additional evidence concerning the need to account comprehensively for attributes associated with both RM and CCM when predicting customer demand in travel and tourism firms. Accordingly, firms need to account not only for the effects of RM and CCM attributes but also for the corresponding reference-dependent fairness adjustments relating to those attributes.

Are all online hotel prices created dynamic? An empirical assessment

“…Indeed, on the one hand, the price discrimination due to a strong price variations is likely to affect an establishment's rating negatively, and may thus act as a deterrent to price fluctuations (Xia et al 2004;Bolton et al 2003); on the other, if a firm's competitive advantage arises from a high service quality, or if price fluctuations are perceived to be an industry's common practice, then a firm can freely adjust its prices dynamically without fearing to attract criticism from its customers (Mathies, Gudergan, Wang 2013;Ferguson 2014). In both cases, the hotel management may act in ways which we do not observe but that may target both the hotel's online pricing approach and its need to maintain or improve its customers' rating.…”

Homogeneous service with heterogeneous products: Relationships among airline ticket fares and purchase fences

“…First of all, variables related to airlines such as flight frequency, frequent flyer program, aircraft type, punctuality, check-in service, ground service, airline brand, fairness, access time, online reviews, baggage fees, and safety information are commonly regarded as important variables (Garrow et al, 2007;Hess et al, 2007;Teichert et al, 2008;Wen et al, 2009;Wen and Lai, 2010;Mathies et al, 2013;Gao and Koo, 2014;Yang et al, 2014;Jung and Yoo, 2014;Koo et al, 2015;Scotti and Dresner, 2015). Other works focus on the features of flights themselves when passengers face several choice alternatives such as schedule time, the number of stopovers, seat comfort, in-flight service, and in-flight travel time (Ortúzar and Simonetti, 2008;Balcombe et al, 2009;Wen et al, 2009;Wen and Lai, 2010;Mathies et al, 2013;Gao and Koo, 2014;Koo et al, 2015). However, all these papers address the choice of non-homogeneous service which may be somehow differentiated by different brands, different markets, different seat service, or different airports.…”

“…Although fences are commonly seen while purchasing airline tickets in practice such as departure time, booking time, and premium charges, the real effects of fences are not fully explored yet. In the context of flight service selection, Mathies et al (2013) have addressed the influence of cancellation fees and time of ticketing. Another work by Denizci Guillet and Xu (2013) also investigate the influence of advanced purchase, refundability, and changing fees on the selection of different flight service.…”

“…On empirical findings of fences, Mathies et al (2013) adopt multinomial logit model (MNL) to investigate the influence of customer-centric attributes on the choice of airline services. They find that cancellation fees may have significant effects on passengers' flight choices in all segments except business travelers.…”

“…They find that cancellation fees may have significant effects on passengers' flight choices in all segments except business travelers. In addition, for the attribute of time of ticketing, Mathies et al (2013) indicate that only booking 60 days before departure causes negative impacts on utility in the segments of loyal leisure and business travelers. In another study, Denizci Guillet and Xu (2013) explore the effect of advance requirement, refundability, and changeability on choosing flight services.…”