Joint Pricing Strategies for Tobacco Manufacturing Equipment and Optional Value-added Service

Objectives: This paper constructs an analytic model for optimal pricing in which the interrelationship between the tobacco equipment and the optional value-added service supplied by tobacco equipment manufacturers are effectively depicted, and derives the closed-form solutions of the optimal prices, which has previously been considered analytically intractable in the bundling problem of pricing two goods. The research reveals that when the marginal cost of the optional value-added service is 0 and the valuation of the service for tobacco manufacturing enterprises is relatively low, it is advisable to adopt pure bundling pricing strategy; when the marginal cost of the service is 0 but the valuation of the service is relatively high, it is advisable to adopt separate pricing strategy; when the marginal cost of the service is greater than 0, separate pricing strategy is always optimal. And it is interesting that, under separate pricing strategy, the higher valuation of the tobacco equipment leads to lower price for the service; the higher marginal cost of the service leads to higher price for the service, but lower price for the tobacco equipment. This paper also proves that there are only two basic pricing strategies for tobacco equipment manufacturers: pure bundling pricing and separate pricing of the tobacco equipment and service.

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The Impact of Price Comparison Service on Pricing Strategy in a Dual-Channel Supply Chain

Mathematical Problems in Engineering ◽

10.1155/2013/613528 ◽

2013 ◽

Vol 2013 ◽

pp. 1-13 ◽

Cited By ~ 9

Author(s):

Qi Xu ◽

Zheng Liu ◽

Bin Shen

Keyword(s):

Supply Chain ◽

Numerical Study ◽

Profit Maximization ◽

Pricing Strategy ◽

Optimal Pricing ◽

Pricing Strategies ◽

Price Comparison ◽

Dual Channel ◽

Dual Channel Supply Chain ◽

The Impact

Recently, price comparison service (PCS) websites are more and more popular due to its features in facilitating transparent price and promoting rational purchase decision. Motivated by the industrial practices, in this study, we examine the pricing strategies of retailers and supplier in a dual-channel supply chain influenced by the signals of PCS. We categorize and discuss three situations according to the signal availability of PCS, under which the optimal pricing strategies are derived. Finally, we conduct a numerical study and find that in fact the retailers and supplier are all more willing to avoid the existence of PCS with the objective of profit maximization. When both of retailers are affected by the PCS, the supplier is more willing to reduce the availability of price information. Important managerial insights are discussed.

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Experience Curves and Dynamic Demand Models: Implications for Optimal Pricing Strategies

Journal of Marketing ◽

10.1177/002224298104500106 ◽

1981 ◽

Vol 45 (1) ◽

pp. 52-62 ◽

Cited By ~ 54

Author(s):

Robert J. Dolan ◽

Abel P. Jeuland

Keyword(s):

Product Life Cycle ◽

Dynamic Models ◽

Supply And Demand ◽

Pricing Strategy ◽

Optimal Pricing ◽

Pricing Strategies ◽

Evolutionary Forces ◽

Demand Models ◽

Optimal Pricing Strategy ◽

Experience Curves

Recent empirical research shows that supply and demand conditions are typically not stable over time. The evolution of these factors and the firm's ability to impact the evolution have important pricing implications. This paper presents a general methodology for determining the optimal pricing strategy over the product life cycle given evolutionary forces in the environment, and derives the optimal pricing strategy for some well known dynamic models.

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Optimal pricing strategies for delivery alliance in online retailing platform

Nankai Business Review International ◽

10.1108/nbri-02-2018-0018 ◽

2019 ◽

Vol 10 (3) ◽

pp. 447-464

Author(s):

Yufei Yan ◽

Zuoliang Ye ◽

Miao Sun

Keyword(s):

Service Quality ◽

Optimization Problems ◽

Pricing Strategy ◽

Distribution Model ◽

Future Research ◽

Optimal Pricing ◽

Pricing Strategies ◽

Online Retailing ◽

Content Type ◽

Basic Model

Purpose Nowadays, some online retailing platforms emerge to integrate transport capacity to provide standard distribution service for sellers. Such an integrated form of service is defined as delivery alliance (DA). To have a better understanding of how to price the service, this study aims to fixate on the seller’s problems and builds a series of profit maximization models in accordance with the two-sided market pricing theory within a platform business model. Design/methodology/approach In the present study, some optimization models are built in the two-sided market type and the optimal solutions are found in a three-dimensional decision space. By using the basic model as the benchmark, some optimization problems of DA in realistic situations are discussed. Particularly, a power-law-distribution model is established to deal with the uncertainty in forecasting. Also, a price-sensitive model and a loss-aversion model are presented to describe the various reactions of sellers to charging modes. Finally, some combined situations are discussed and the strategies are compared under the mentioned models. Findings By selecting the basic model as the benchmark, the specific pricing strategies are found for each context to yield the optimal profits. The flexibility of pricing strategy in the basic model and rigid pricing strategies in extended models, are discussed. As a result, the guidelines for the online retailing platforms are developed on designing and pricing the DA service. Research limitations/implications First, it would be interesting to expand the pricing plan of the platform. For instance, menu pricing and quantity discount have not been considered, which are common in practice. The time discounting has also been ignored. If the time value were calculated, the contract fees would be more critical due to the earliest of collecting money. Finally, those joiners who have huge order sizes are crucial for the ecosystem indeed, but arouse no attention. While in reality, they may have more power to bargain with the platform. Thus, how the platform competition affects the pricing strategies needs future research. Originality/value The optimal pricing strategies under these models are analytically found out, and it is shown that the presented models result in the same scale of joiners and profits in optimization. This suggests that DA works well in various behavioral contexts. This also suggests that DA is a significant controller in service quality improvement. Then, the optimal pricing strategies are compared among all the models. During this, it is discovered that the realistic contexts might reduce the profit, whereas an appropriate pricing strategy can pull this back without loss of service quality.

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Pricing Strategy Dynamic Simulation Modelling within the High-Tech Sector

Key Engineering Materials ◽

10.4028/www.scientific.net/kem.495.167 ◽

2011 ◽

Vol 495 ◽

pp. 167-170 ◽

Cited By ~ 32

Author(s):

Marina C. Terzi ◽

Damianos P. Sakas ◽

Ioannis Seimenis

Keyword(s):

New Product Development ◽

New Product ◽

Simulation Modelling ◽

Pricing Strategy ◽

High Tech ◽

Optimal Pricing ◽

Pricing Strategies ◽

High Tech Sector ◽

Optimal Pricing Strategy ◽

Dynamic Simulation Modelling

New Product Development (NPD) in the high-tech sector is a rapid paced concept that requires constant efforts and great market awareness. Pricing has received little attention from companies, even if systematic pricing monitoring may lead to serious conclusions regarding the proper allocation of resources and the segmentation of the marketplace. The purpose of the present study is to develop the concept of pricing strategies simulation modelling for the development of new high-tech products. The Pricing Simulation Model successfully represents the process that companies should carefully consider so as to employ the optimal pricing strategy.

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A game theory application of a cruise value chain – the case of China

Maritime Business Review ◽

10.1108/mabr-12-2017-0031 ◽

2018 ◽

Vol 3 (2) ◽

pp. 145-164 ◽

Cited By ~ 2

Author(s):

Grace W.Y. Wang ◽

Qingcheng Zeng ◽

Chenrui Qu ◽

Joan Mileski

Keyword(s):

Game Theory ◽

Value Chain ◽

Value Added ◽

Pricing Strategy ◽

Pricing Strategies ◽

Content Type ◽

Market Participants ◽

Market Shares ◽

Theory Application ◽

Decision Making Processes

Purpose Regardless of the facts showing a booming Chinese cruise market, cruise operations in China are very different from the current practices of the two major cruise markets – the US and the Mediterranean Sea. This study aims to quantify pricing strategies and possible incentive mechanisms of cruise operations in China. Design/methodology/approach Using optimization in economic-based game theory, the complexity of the pricing strategies and interaction and/or possible coordination within the cruise value-added chain can be captured. Findings The results show that a coordinative pricing strategy with Shapley profit redistribution within the value-added chain offers benefits to both cruise passengers and service suppliers. With two subsidy scenarios, one to the passenger and the other to the travel agent, a cooperative pricing strategy outperforms other strategies and successfully increases market shares and total revenue. Originality/value The advantages of coordination between participants in cruise value chain are quantified. Effective strategies for attracting players participating in cruise value chain are designed. This paper will provide market participants with strategies to enhance their decision-making processes.

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Pelatihan Pendidikan Entrepreneurship Bagi Siswa-Siswi SMAK Frateran: Penentuan Strategi Harga Jual

Jurnal LeECOM (Leverage, Engagement, Empowerment of Community) ◽

10.37715/leecom.v3i2.2332 ◽

2021 ◽

Vol 3 (2) ◽

Author(s):

Lenny Gunawan ◽

Agustiono Agustiono ◽

Charly Hongdiyanto ◽

Wendra Hartono

Keyword(s):

Community Service ◽

Dynamic Pricing ◽

Service Industry ◽

Value Added ◽

Pricing Strategy ◽

Pricing Strategies ◽

Low Order

The purpose of this community service to Frateran Highschool is to increase their understanding towards Determining Pricing Strategy within their businesses. This training is on live discussion via zoom regarding the previous experiences in determining pricing strategy among lecturers, facilitators, and students as participants. These activities were conducted in an hour meeting session on 17th September 2021, as community service from Ciputra lecturers’ activity to SMAK. Frateran Surabaya. The class was attended by 12 out of 15 students registered, grade XII within Entrepreneurship Subject. The pricing strategies matrix consists of 3x3 quadrants, which then divided into 1. Fixed menu Pricing, and 2. Dynamic Pricing. Students also learned about value added within a product, thus lead them into positioning and differentiation for the businesses. The explanation also given by using examples for each method: Traveloka, Gofood, Grabfood (promotional posters & vouchers) to balance out peak and low order times, Ovo (program features in application) increasing customers convenience in adding values, Starbucks (personnel contribution service and behind the scenes operational video). The conclusion, the activity was able to increase students’ understanding of fixed and dynamic pricing strategy, value added within products/services, and finally positioning and differentiation within service industry.

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Video Platforms’ Value-Added Service Investments and Pricing Strategies for Advertisers

Sustainability ◽

10.3390/su132413701 ◽

2021 ◽

Vol 13 (24) ◽

pp. 13701

Author(s):

Gang Liu ◽

Fengyue An

Keyword(s):

Theoretical Approach ◽

Network Externalities ◽

Value Added ◽

Pricing Strategies ◽

Duopoly Model ◽

Value Added Service ◽

Game Theoretical Approach ◽

The Cost ◽

S Model

Using a game-theoretical approach, this paper develops a duopoly model and examines value-added service (VAS) investments and pricing strategies on video platforms with opposite inter-group network externalities between two groups. We consider two scenarios with VAS investment, namely, a single platform investing in VASs for advertisers (S-Model) and both platforms investing in VASs for advertisers (B-Model). We found the following: (i) In the S-Model, the investing platform’s VAS level remains maximum when the marginal investing cost is low; otherwise, it decreases with the cost. Investing and non-investing platforms’ advertising prices are unaffected by the marginal investing cost if the cost is low; otherwise, the prices decrease and increase with the cost, respectively. Furthermore, the investing platform’s advertising price is higher than the non-investing platform’s. (ii) In the B-Model, the two platforms’ VAS levels remain maximum if the marginal investing cost is low; otherwise, they decrease with the cost. The two platforms’ advertising prices are equal and irrelevant to the marginal investing cost. (iii) The investing platform’s VAS level in the S-Model is higher than or the same as that in the B-Model and the investing platform’s advertising price in the S-Model is higher than that in the B-Model. (iv) Compared to the scenario without VAS investment, the investing platform’s advertising price is higher in the S-Model, but the same in the B-Model.

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