Pricing Decision for Multi-generational Innovative Product
Sales of the successive generations of innovative products are strongly influenced by its last generation products,namely cannibalization effect.Therefore,the firm should pursue to maximize the net present profit of multi-generation of the product,rather than revenue of either one generation concerning the pricing problem of the successive generations of the product.The problem becomes even more challenging due to constraints in production capacity and the diverse range of consumer behavior.To find the optimal pricing strategies,a system dynamics simulation model was built instead of an analytical model.Through simulation analysis,the impact of several factors on pricing strategies was explored,e.g.production capacity,market size,launch time,sales efforts of advertising and word-of-mouth marketing.Finally,several managerial insights were derived based on the scenario analysis.
successive generations of the productpricing decisionproduction capacityconsumer behaviorsystem dynamics
NETL
NSTL
万方数据
