Work

Optimizing Pricing Strategies for Product Lines and Value‐Added Services: Accounting for Reference Prices and Network Effects

Year: 2024

Type: article

Abstract: ABSTRACT Customer choice behavior is increasingly influenced by the reference price effect and negative network effect as customers become more rational and personalized. This study, considering customers as pivotal stakeholders for enterprise development, employs the multinomial logit (MNL) model and develops pricing and strategy optimization models for pure bundling and mixed bundling strategies of an enterprise's product line. The main focus is to analyze how these effects impact optimal pricing and strategy selection. The results indicate that stronger effects lead to lower enterprise profits, and ignoring them can cause substantial losses. Generally, mixed bundling strategies yield higher profits.

Source: Managerial and Decision Economics

DOI: 10.1002/mde.4408

Authors: Wei Qi, Ziwei Li, Yongfeng Ma, Xuwang Liu

Institutions: Henan University, Southeast University, Harbin Institute of Technology

Language: English

Topic: Consumer Market Behavior and Pricing

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

Funders: National Natural Science Foundation of China, Postdoctoral Science Foundation of Jiangsu Province, National Social Science Fund of China