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Perceived Fairness Of Yield Management. Case Study

625 words - 3 pages

Reference: Kimes, S.E. (2002). Perceived fairness of yield management. Cornell Hotel and Restaurant Administration Quarterly, 43, 21-30.
doi: 10.1177/0010880402431002

Kimes investigated yield management and whether customers perceive it fair. The first objective was to determine if customers believe maintenance of a profit through raising the price to be fair. The second objective was to discover if increase in prices that leads to increase in profit identified by customers as unreasonable. The third objective of the research was to find out whether the same price with decreased costs is considered reasonable from customers prospective. When implementing yield management, managers should consider long-term profits as well as short-term profits. Otherwise, the consequences can be disastrous (Hayes & Abernathy, 1980 in Kimes, 2002). The previous researches also have found that perceived fairness is very important in managing long-term profits (Thaler, 1985 ...view middle of the document...

, in Kimes,2002). To gather data the author created an eight-question survey that was distributed among travelers in the Starter Hotel in Ithaca, NY. The author used a seven-point scale where 1 was considered as highly acceptable and 7 represented highly unacceptable. 500 surveys were left in the rooms of the hotel. Total of 118 surveys were returned. Half of them provided data for the hotel industry, another half for the airline industry. Analyzing collected data, Kimes have found that customers perceive divergence from the reference transaction in the hotel and the airline industries differently. However, later additionally gathered data shows that this difference does not exist. Also, the author has found that customers change their opinion on acceptability of a transaction when actual transaction differs from their reference transaction. Based on own research results, the author provided several implications of acceptable and non-acceptable practices.
For the average reader the language of this research was comprehensive. The author relied only on the factual information through the interpretation of the results of a study and not on own opinion and perceptual measures. Such aspects defined the appropriateness and objectivity of the research. However, a lot of examples were concerned of hotel industry while the purpose of the study stated to discover aspect of fairness in the airline industry as well. Also, three hypotheses were established, however, it was hard to determine whether they were supported or rejected. Sampling method was adequately described in the study. The author states that the representatives of the population traveled on average of one to three days a month. This information does not clarify if they traveled by car, train or any other transportation method.
Overall, the contribution of this examination is valuable for hospitality industry, especially for the hotel industry. All of the information provided the reader with the better understanding of how yield management perceived by the customers. The author recommended the managers to provide information on different pricing available, to give discount in exchange of acceptable restrictions, and to charge different prices when the same products or services are viewed as different.

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