Optimal cruise-liner passenger cabin pricing policy

The first attempt, in any marketing environment, to consider the optimal number of market segments, as well as the corresponding prices, is performed here in conjunction with cruise liners, under the assumption of an aggregate linear demand function.

Abstract

The first attempt, in any marketing environment, to consider the optimal number of market segments, as well as the corresponding prices, is performed here in conjunction with cruise liners. The optimal market segmentation pricing strategy for passenger cabins on cruise-liners is investigated under the assumption of an aggregate linear demand function, and for four different situations: (a) single price market, (b) optimal segmentation of the Unused capacity of a single-price-market, (c) optimal segmentation of all cabins, and (d) optimal segmentation allowing for infiltration from higher-priced to adjacent lower-priced segments. A numerical example is provided for each case.