A major isue in the successful implementation of yield management is the ability of the firm to segment its market. Proper segmentation will prevent all of the firm’s customers from taking advantage of price reductions when they are offered to fill available capacity.
Market segmentation can be done in several ways. The first is to impose signify restriction on customers who use the lower prices. For example. airlines require customer stay over a Saturday night or to purchase their tickets from 7 to .30 days in advance to qualify for lower airfares. These very same conditions. however. prevent the business who usually travels midweek on short notice, from taking advantage of the lower fare Another method of segmentation is to offer lower prices on only specific days of t week or times of’ the day. Movie theaters offer reduced ticket prices for matinees, which enior citizens can take advantage of during weekdays. Similarly. downtown hotels typically offer discounts on weekends when business travelers are home. as an incentive for tourists.