Pricing strategy in the product and service market
Existing studies have mainly focused on pricing in either primary markets or aftermarkets. However, in practice, prices in primary markets and aftermarkets are closely correlated. This study examines the joint pricing strategy in both primary markets and aftermarkets based on customer utility and es...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
KeAi Communications Co., Ltd.
2021-06-01
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| Series: | Journal of Management Science and Engineering |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096232021000032 |
| _version_ | 1831553777261346816 |
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| author | Yu Xia Jiaping Xie Weijun Zhu Ling Liang |
| author_facet | Yu Xia Jiaping Xie Weijun Zhu Ling Liang |
| author_sort | Yu Xia |
| collection | DOAJ |
| description | Existing studies have mainly focused on pricing in either primary markets or aftermarkets. However, in practice, prices in primary markets and aftermarkets are closely correlated. This study examines the joint pricing strategy in both primary markets and aftermarkets based on customer utility and establishes a pricing model for profit-maximization firms. Our results show that overpricing in the aftermarket is caused by customer myopia, while the motivation of the firm to avoid customer myopia depends on its pricing strategy. A quantity–price contract in the aftermarket is designed to raise the firm’s profit. |
| first_indexed | 2024-12-17T03:51:27Z |
| format | Article |
| id | doaj.art-a218612cddec4d4b8827ffd7034edafa |
| institution | Directory Open Access Journal |
| issn | 2096-2320 |
| language | English |
| last_indexed | 2024-12-17T03:51:27Z |
| publishDate | 2021-06-01 |
| publisher | KeAi Communications Co., Ltd. |
| record_format | Article |
| series | Journal of Management Science and Engineering |
| spelling | doaj.art-a218612cddec4d4b8827ffd7034edafa2022-12-21T22:04:45ZengKeAi Communications Co., Ltd.Journal of Management Science and Engineering2096-23202021-06-0162211234Pricing strategy in the product and service marketYu Xia0Jiaping Xie1Weijun Zhu2Ling Liang3School of Business, Nanjing University of Information Science & Technology, 219 Ningliu Road, Nanjing, Jiangsu, 210044, ChinaSchool of International Business Administration, Shanghai University of Finance & Economics, 777 Guoding Road, Shanghai, 200433, China; Corresponding author. 777 Guoding Road, Shanghai, 200433, China.School of International Business Administration, Shanghai University of Finance & Economics, 777 Guoding Road, Shanghai, 200433, ChinaTourism and Event Management School, Shanghai University of International Business and Economics, 1900 Wenxiang Road, Shanghai, 201620, ChinaExisting studies have mainly focused on pricing in either primary markets or aftermarkets. However, in practice, prices in primary markets and aftermarkets are closely correlated. This study examines the joint pricing strategy in both primary markets and aftermarkets based on customer utility and establishes a pricing model for profit-maximization firms. Our results show that overpricing in the aftermarket is caused by customer myopia, while the motivation of the firm to avoid customer myopia depends on its pricing strategy. A quantity–price contract in the aftermarket is designed to raise the firm’s profit.http://www.sciencedirect.com/science/article/pii/S2096232021000032Aftermarket serviceCustomer myopiaProduct service system |
| spellingShingle | Yu Xia Jiaping Xie Weijun Zhu Ling Liang Pricing strategy in the product and service market Journal of Management Science and Engineering Aftermarket service Customer myopia Product service system |
| title | Pricing strategy in the product and service market |
| title_full | Pricing strategy in the product and service market |
| title_fullStr | Pricing strategy in the product and service market |
| title_full_unstemmed | Pricing strategy in the product and service market |
| title_short | Pricing strategy in the product and service market |
| title_sort | pricing strategy in the product and service market |
| topic | Aftermarket service Customer myopia Product service system |
| url | http://www.sciencedirect.com/science/article/pii/S2096232021000032 |
| work_keys_str_mv | AT yuxia pricingstrategyintheproductandservicemarket AT jiapingxie pricingstrategyintheproductandservicemarket AT weijunzhu pricingstrategyintheproductandservicemarket AT lingliang pricingstrategyintheproductandservicemarket |