The practicalities and benefits of applying revenue management to grocery retailing, and the need for effective business rule management

This paper seeks to demonstrate the fundamental requirement for consistent management of business rules when applying revenue management (RM) principles to the pricing of goods in a grocery retail outlet. Business rules are the explicit expression of a company's pricing policy, and they play a critical role in ensuring that price recommendations resulting from an RM system are consistent with price image (or perception) and the overall strategic goals of profit and market share. The paper includes a case study involving the application of an RM system to a category of produce for a US grocery chain, illustrating the impact of business rules on the achievement of profit and volume goals.