The period after a recession always triggers the question: “in order to improve margins how can companies raise the price effectively after a period of severe price pressure ?”

An often ignored opportunity can help aircraft OEMs boost operating profit up to 25% in 6 to 12 months

In the current competitive business environment, many original equipment manufacturers (OEMs) are searching for ways in which they can improve growth. Spare parts have always represented an important profit area for OEMs. On average, the spare parts business of manufacturers already makes up approximately ten percent of total sales, up to 50 percent of net income, and significantly impacts customer satisfaction and brand loyalty.

As we all know, corporations compete by delivering customer value, which they can influence at three stages of a product’s life. Some businesses focus on the design phase, which determines a product’s raw materials, capabilities, and performance. (In fact, 80% of a product’s costs are determined when it is designed.) Most businesses compete in the next phase, production. Because a majority of businesses adopt the same standards in manufacturing, it’s difficult for them to distinguish themselves at this stage. The final stage is customer support, which spans the longest part of a product’s life. Although few executives realize it, after-sales support is the longest-lasting source of revenues to sellers and requires the smallest investment. Companies that ignore the aftermarket do so at their peril.

In general, the yield management/booking limit decision is just one aspect of a more general business question: How should a firm market and distribute goods to multiple customer segments? To answer this question, a firm must use tools for pricing and forecasting as well as for inventory management.  All of these tools are often grouped under the term revenue management, although the boundaries between yield management and revenue management are often ambiguous. In this note we will specifically focus on just a single aspect of revenue management ; yield management. 

The objective of this paper is to present a comprehensive framework for pricing decisions which considers all relevant dimensions and elements for profitable and sustainable pricing decisions. The theoretical framework is useful for guiding new product pricing decisions as well as for implementing price-repositioning strategies for existing products. The practical application of this framework is illustrated by a case study involving the pricing decision for a major product launch at a global chemical company.

2003 Elsevier Inc. All rights reserved. 

New suppliers entering a reverse auction have very low chances of success. Indeed, the research found that only 7.1% of new suppliers were successful in securing the contract. As a result, the following real-world examples detail the strategies used by incumbent suppliers to defend their account in the face of reverse auctions and so retain the business.