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Revenue Management Ethics

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Price Discrimination

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Price discrimination refers to charging different prices to different customers for the same product or service, which can be seen as unethical if it's based on exploiting certain customer segments. In revenue management, it's essential to balance fairness with profitability.

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Overbooking Policies

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Overbooking is a common practice in revenue management to compensate for no-shows, but can be controversial if not managed ethically. Ensuring customer satisfaction and having a clear, fair compensation policy for inconvenienced guests is significant.

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Transparency in Pricing

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Ethical revenue management demands clear communication about all costs associated with a booking. Hidden fees can lead to customer dissatisfaction and potentially, legal issues.

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Personal Data Usage

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The ethical use of customers' personal data for revenue management purposes, such as personalized pricing, is critical. Companies must navigate privacy concerns while leveraging data to enhance profitability.

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Revenue Management in Crisis Situations

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During crises such as natural disasters, it's important for businesses to avoid price gouging. Ethical revenue management practices should prioritize community welfare and long-term customer relationships over short-term profits.

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Loyalty Program Management

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Loyalty programs should be managed ethically, offering genuine value without manipulating customer behavior or exploiting their data. Revenue management should maintain the integrity of loyalty programs to build long-term relationships.

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Sustainable Pricing Strategies

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Sustainable pricing takes into account the long-term viability of the business and its practices. Ethical revenue management should include strategies that support sustainable tourism and avoid detrimental price wars.

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Dynamic Pricing and Fairness

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While dynamic pricing can optimize revenue, it's important to balance it with fairness to avoid perceptions of price exploitation. Ethical revenue management should consider customer perceptions and maintain trust.

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Yield Management and Customer Segmentation

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Using customer segmentation in yield management must be done ethically, avoiding discrimination and focusing on customer value provided. The goal should be to maximize revenue while treating all customers fairly.

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Cancellation and Refund Policies

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Cancellation and refund policies should be designed to protect both the business’s revenue and the customers’ rights. Ethical management includes having clear, accessible, and fair policies in place.

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