Integrating revenue management and targeted advertising strategies to improve resource allocation in the restaurant industry

Mohit Tyagi () and Nomesh B. Bolia ()
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Mohit Tyagi: Indian Institute of Technology Delhi
Nomesh B. Bolia: Indian Institute of Technology Delhi

Journal of Revenue and Pricing Management, 2025, vol. 24, issue 4, No 6, 368-379

Abstract: Abstract In an increasingly competitive market, the strategic combination of revenue management and targeted advertising approaches is essential for attracting and retaining customers, thereby ensuring sustained success. Leveraging targeted advertising enables restaurateurs to tailor their marketing efforts to specific audience segments, maximizing their effectiveness in driving foot traffic. Concurrently, revenue management techniques ensure that resources are allocated efficiently to support these targeted efforts. Through field surveys conducted in different parts of Delhi (the national capital of India), we develop Multinomial Logistic Regression (MLR) models to determine optimal advertising strategies based on the demographic and socio-economic profiles of consumers. Findings highlight age, occupation, household income, and dining frequency as pivotal factors influencing effective targeted advertising approaches. An in-depth analysis of the MLR models provides significant insights into how restaurateurs can effectively allocate resources across different advertising modes. These insights not only enhance advertising effectiveness but also align with revenue management principles, promoting resource efficiency. The results and recommendations of this study can be adopted by restaurateurs worldwide to increase footfall and optimize resource allocation in their establishments.

Keywords: Restaurant; Revenue; Multinomial logistic regression (MLR); Demographics; Socio-economic profile; Targeted advertising; Resource allocation (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41272-024-00511-8

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