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An executive summary for managers and executive readers can be found at the end of this article.
Introduction
Firms struggling in highly dynamic and "hyper competitive" industries ([61] D'Aveni, 1994) are often requested to resort to "smart" management and marketing strategies as to avoid the dangerous "traps" of price wars and to preserve or even increase profitability.
When a firm wants to preserve or increase profitability, the ability to manage pricing strategies becomes critical ([39] Monroe, 2003). We can try to distinguish two main (and non necessary alternative) options a firm has to act on price and preserve profitability. The first one is to act mainly on its "capacity" in a sort of "supply based perspective": in this case, firms can resort to yield management strategies and yield pricing. Simply, yield management is the process of allocating the right type of capacity or inventory unit to the right kind of customer at the right price so as to maximise revenue or yield ([32], [33] Kimes, 1989, 1997). The second one is to act mainly on customers' different value perceptions, even irrespectively from capacity, and to differentiate pricing accordingly: in this case, firms can resort to dynamic pricing. Again in a very simple way, dynamic pricing is a sophisticated form of price discrimination and it refers to a fluid pricing scheme between the buyer and the seller, rather than the more traditional fixed pricing approach: in this fluid scheme the price is the result of the match between demand and offer and depends mainly on the customers' different willingness to pay.
In other words, yield management and dynamic pricing are very useful for solving the problem of adaptation of supply to demand when the dysfunctions brought about by the impossibility of storing services are critical. Managers, in this case, are requested to regulate demand by a pricing policy that is not directed by the same criteria as for tangible products ([22] George and Barksdale, 1974; [44] Reichheld and Sasser, 1990; [40] Normann, 1993; [14] Desiraju and Shugan, 1999). As a matter of fact, when a firm owns a fixed capacity of a resource that is consumed in the production or delivery of multiple products/services and when its customers vary in their willingness to pay, it has...