Journal ArticleDOI
Joint pricing and advertising strategy with reference price effect
Reads0
Chats0
TLDR
In this article, a joint pricing and advertising problem for a monopolistic firm with consideration of reference price effect is investigated, where consumer demand rate is price-sensitivity and depends on the gap between the sales price and the reference price in consumers' mind.Abstract:
Consumers are susceptible to reference price effects when they make purchase decisions for a certain product. Meanwhile, the sales price and advertisement are the determinable factors that have impact on consumers’ reference price which are also fundamental marketing strategies. Therefore, how to determine an appropriate sales price and advertising effort level to maximise firms’ profits is an essential task. A joint pricing and advertising problem for a monopolistic firm with consideration of reference price effect is investigated, where consumer demand rate is price-sensitivity and depends on the gap between the sales price and the reference price in consumers’ mind. An optimisation model is established to maximise the firm’s total profit by making a joint pricing and advertising strategy. The static and dynamic joint strategies are obtained by applying Pontryagin’s maximum principle. Results show that the dynamic strategies dominate the static ones. Furthermore, the dynamic pricing and dynamic advertis...read more
Citations
More filters
Journal ArticleDOI
Dynamic pricing in the presence of reference price effect and consumer strategic behaviour
TL;DR: This paper presents a model for designing two-stage dynamic pricing strategies when the seller faces strategic consumers in the presence of a reference price effect, and derives equilibrium prices and optimal pricing strategies for the seller under markdown pricing policy using equilibrium theory and backward induction method.
Journal ArticleDOI
A systematic review of decision-making in remanufacturing
TL;DR: A systematic review over decision-making in remanufacturing is performed by classifying decisions into different managerial levels and areas by adopting a systematic approach which provides a repeatable, transparent and scientific process.
Journal ArticleDOI
Optimal joint dynamic pricing, advertising and inventory control model for perishable items with psychic stock effect
TL;DR: The theoretical results prove that the firm would adopt a static pricing strategy, and demonstrate that the optimal paths of the advertising goodwill and psychic stock can be determined uniquely.
Journal ArticleDOI
Joint dynamic pricing and preservation technology investment for an integrated supply chain with reference price effects
TL;DR: A system of joint dynamic pricing and preservation technology investment decisions for deterioration items in an integrated supply chain management environment involving a manufacturer and a retailer, a controllable deterioration rate, and price-dependent demand is proposed.
References
More filters
Book ChapterDOI
Optimal Advertising and Optimal Quality
Robert Dorfman,Peter O. Steiner +1 more
TL;DR: In this article, the equilibrium conditions for a firm marking decision with respect to price, quality, and advertising expenditure were established. And they were generalized to optimal advertising and optimal quality with fixed prices.
Book
Optimal Control Theory : Applications to Management Science and Economics
TL;DR: In this article, the authors present an alternative derivation of the maximum principle of continuous time for optimal control, which they call the continuous time maximization principle (CTP), which is defined in the Calculus of Variations.
Journal ArticleDOI
Reference Price Research: Review and Propositions
TL;DR: In this article, the authors review the published literature on reference price in both the behavioral and modeling streams and offer an integrative framework to review prior research on the formation of reference price, retrieval and use of reference prices, and the influences of the reference price on various purchase decisions and evaluations.