scholarly journals Incorporating Cannibalization into Pricing Optimization Using Choice Data: An Application to the Pricing of Mobile Broadband Services

2019 ◽  
Vol 21 (2) ◽  
pp. 57-68
Author(s):  
Fransiscus Rian Pratikto
Keyword(s):  
Demand Function ◽  
Hierarchical Bayes ◽  
Choice Data ◽  
Total Contribution ◽  
Mobile Broadband ◽  
Price Differentiation ◽  
First Choice ◽  
Broadband Services ◽  
Pricing Optimization

Price differentiation may not be as effective in increasing profitability due to imperfect segmentation, arbitrage, and, cannibalization. Cannibalization takes place when customer with higher willingness-to-pay buys lower-priced product. This research proposes an approach to incorporating cannibalization into pricing optimization using choice data. From choice data, individual level utilities are estimated using hierarchical Bayes and individual choice is predicted using randomized first choice simulation. Individual choices are then aggregated to obtain the demand function. The novelty of this research is in the way cannibalization is incorporated into the pricing optimization. Instead of integrating cannibalization into the demand function or representing it as a separate component in the optimization formulation, in this research, cannibalizing products are incorporated into the simulation scenario as competing products, based on which the demand functions used in the optimization are derived. This approach is more direct and realistic than those in the previous research. The approach was implemented in a case study of mobile broadband services in Indonesian price-sensitive market. The result shows that two-fare-class price differentiation incoporated with product differentiation increases total contribution of about 60% compared to single-fare-class policy. Furthermore, it is also shown from our case study that starting from a three-fare-class policy, through iterations, our approach suggests that policy with two-fare-class results in a not significantly different total contribution.

scholarly journals Preference-Based Revenue Optimization for App-Based Lifestyle Membership Plans

2021 ◽  
Vol 20 (1) ◽  
pp. 21-31
Author(s):  
Fransiscus Rian Pratikto ◽  
Gerardus Daniel Julianto ◽  
Sani Susanto
Keyword(s):  
Optimization Model ◽  
Demand Function ◽  
Random Parameter ◽  
Mixed Integer ◽  
Revenue Optimization ◽  
First Choice ◽  
Simulation Scenario ◽  
Random Parameter Logit ◽  
Pricing Optimization ◽  
Better Than

The demand for a product is rooted in the consumers’ needs and preferences. Therefore, a pricing optimization model will be more valid if the demand function is represented under this basic notion. A preference-based revenue optimization model for an app-based lifestyle membership program is developed and solved in this research. The model considers competitor products and cannibalization effect from products in other fare-class, where both are incorporated using a preference-based demand function. The demand function was derived through a randomized first choice simulation that converts individual utility values into personal choices based on the random parameter logit model. Cannibalizing products are considered as competing products in the simulation scenario. In the pricing optimization, two and three fare classes based on the membership period are considered. The corresponding pricing optimization problem is a mixed-integer nonlinear programming problem with a solution-dependent objective function. Using enumeration, the three-fare-class optimal prices of Rp420,000, Rp300,000, and Rp60,000 for 12-month, 6-month, and 1-month membership, respectively, are better than those of the two-fare-class. Under this policy, the estimated total revenue is Rp30.56 billion, 41.74% greater than that of the current condition.

scholarly journals Uncapacitated Pricing Optimization for Mobile Broadband Services

2018 ◽  
Vol 20 (1) ◽  
pp. 49-58
Author(s):  
Fransiscus Rian Pratikto
Keyword(s):  
Demand Function ◽  
Estimation Method ◽  
Bayes Estimation ◽  
Plausible Assumption ◽  
Mobile Broadband ◽  
Demand Functions ◽  
Price Response ◽  
Broadband Services ◽  
Data Points ◽  
The Impact

The success of revenue management starting in the mid-1980s has been driving pricing decision to be more tactical and operational. Since then, statistics and operations research have been important tools in pricing and revenue optimization. This research seeks to determine optimal price for mobile broadband services of a particular service provider. The case study is mobile broadband services in Indonesian market. We made a plausible assumption that there is no capacity constraint. We used choice-based conjoint with hierarchical Bayes estimation method to derive individual part-worth utilities, based on which market simulation was run to obtain the price-response function. By combining this with information about market size, we came up with a number of data points representing the demand function. Instead of fitting the data points with some theoretical demand functions, we used monotonic cubic splines to interpolate the demand function. Accordingly, we did not use explicit demand functions in the optimization, but a numerical interpolation function to estimate demand for any particular price level. Using enumeration, we then came up with a recommended contribution-maximizing prices under one, two, and three fare-classes segmentation. We assumed a perfect segmentation where cannibalization and arbitrage were not present. Further, we discussed a generalized optimal segmentation problem under that assumption. We also investigated the impact of the changes in competitors’ service attributes on the optimal prices.

scholarly journals Perancangan dan Analisis LTE Advanced 850 Mhz untuk Meningkatkan Penetrasi Mobile Broadband di Indonesia

2019 ◽  
Vol 7 (1) ◽  
pp. 57
Author(s):  
ADE WAHYUDIN ◽  
MUNTAQO ALFIN AMANAF ◽  
ITA KUSMIASIH RATNASARI
Keyword(s):  
Frequency Spectrum ◽  
Remote Area ◽  
Signal Quality ◽  
Mobile Broadband ◽  
Active User ◽  
Lte Advanced ◽  
Broadband Services

ABSTRAKLayanan mobile broadband LTE telah berkembang di Indonesia, namun penyebarannya belum merata. Selain itu, sumber daya frekuensi semakin terbatas seiring dengan meningkatnya trafik layanan broadband. Maka untuk mengatasi hal tersebut, spektrum frekuensi 850 MHz dapat diterapkan pada teknologi LTE advance untuk meningkatkan penetrasi mobile broadband. Maka, untuk mengukur tingkat penetrasi, sehingga dilakukan perancangan LTE Advance 850 MHz yang dibandingkan dengan LTE 1800 MHz eksisting berdasarkan pedekatan cakupan dan kapasitas jaringan. Perhitungan dan simulasi menghasilkan peningkatan penetrasi cakupan wilayah hingga 65% ketika menerapkan LTE Advanced 850 MHz. Sedangkan pendekatan kapasitas, pada parameter active user, jumlah connected user pada frekuensi 850 MHz mencapai 98% jauh dibandingkan frekuensi 1800 Mhz yang mencapai 91%, serta kualitas sinyal RSRP meningkat 37%-46%Kata kunci: LTE Advanced, 850MHz, Effective Throughput, Active User, Penetrasi, Broadband ABSTRACTLTE mobile broadband services is growing rapidly in Indonesia, however the deployment does not spread evenly, especially in remote area. Moreover, resource of frequency spectrum is limited because of the growth of broadband traffic. Thus, frequency spectrum 850 MHz can be implemented for LTE Advanced to increase mobile broadband penetration. So, to measure LTE penetration level, LTE Advanced 850 MHz design is compared to the existing LTE 1800 MHz by coverage and capacity approachment. According to calculation and simulation, coverage penetration increase up to 65% as LTE Advanecd 850 MHz implemetation. While, the connected user of LTE 850 MHz reach 98% when compared to LTE Advanced 1800 MHz that only reach up to 91% and also signal quality increase up to 37%-46%.Keywords: LTE Advanced, 850MHz, Effective throughput, Active user, Penetration, Broadband

South Africa

2011 ◽  
pp. 13-28
Author(s):  
Justin Henley Beneke
Keyword(s):  
South Africa ◽  
Computer Literacy ◽  
African Continent ◽  
End User ◽  
Mobile Broadband ◽  
User Costs ◽  
Developed Markets ◽  
Downward Pressure ◽  
Broadband Services ◽  
Local Loop

South Africa has fallen behind its international peers both developing and developed markets in the race to rollout broadband services. In fact, even within the African continent, it is neither the broadband leader nor progressive in comparison to its Northern African counterparts. This chapter explores the development of broadband services in South Africa, as well as touching on the challenges faced in bringing this phenomenon into the mainstream. Reasons for the lack of diffusion and adoption of such services point to high end user costs of the service, a very limited geographical footprint of both fixedline and mobile broadband infrastructure, as well as a lack of computer literacy and an understanding of what broadband is able to offer. The chapter looks at possible solutions, including introducing a greater degree of competition into the market to facilitate downward pressure on prices, as well as providing cost-based access to international submarine fiber cables and the unbundling of the local loop to further this objective.

Factor Analysis for Nominal (First Choice) Data

2019 ◽  
Vol 27 (5) ◽  
pp. 781-797
Author(s):  
Javier Revuelta ◽  
Alberto Maydeu-Olivares ◽  
Carmen Ximénez
Keyword(s):  
Factor Analysis ◽  
Choice Data ◽  
First Choice

scholarly journals Adjuvant Hormonal Therapy in Postmenopausal Women with Breast Cancer: Physician’s Choices

2012 ◽  
Vol 2012 ◽  
pp. 1-5 ◽  
Author(s):  
Asim Jamal Shaikh ◽  
Shiyam Kumar ◽  
Sajjad Raza ◽  
Maria Mehboob ◽  
Osama Ishtiaq
Keyword(s):  
Breast Cancer ◽  
Postmenopausal Women ◽  
Hormonal Therapy ◽  
Tertiary Care ◽  
Standard Of Care ◽  
Care Hospital ◽  
Adjuvant Hormonal Therapy ◽  
Choice Data ◽  
First Choice ◽  
Clinical Survey

The choice of adjuvant hormonal therapy in postmenopausal women with hormone receptor positive breast cancer has remained a matter of controversy and debate. The variety of agents is available, with each claiming to be superior. This clinical survey was undertaken to get an impression of the physician’s first choice of therapy in an attempt to find out what questions still need to be answered in the making of “standard of care.” A web-based clinical survey was sent to the cancer physicians around the world, and 182 physicians responded to the survey. Most were medical oncologists in a tertiary care hospital. 36.3% preferred Anastrozole, 35.2% Tamoxifen, and 22.2% Letrozole as their first choice. Data support (67.8%) and safety concerns (30%) were given as the main reasons for the choice, 63.7% switched their therapy, and 24% had to switch because of side effects. 73.6% used 5 years of adjuvant hormonal therapy, 6.6% for 7 years, and 4.4% for 10 years. 61.5% follow their patients 3 times monthly, and 73.2% used laboratory and radiological assessment at each followup.Conclusion. Physicians show disagreement over the choice and duration of hormonal therapy in this patient population. Clinical trials leading to firm recommendations to set standards from which patients benefit the most are needed.

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