A value‐based pricing system for strategic co‐branding goods

Abstract

Purpose

This paper seeks to propose a novel pricing system for co‐branding goods by utilizing perceived value, which employs prospect theory (PT) and mental accounting to acquire the consumer's perceived value and to estimate an appropriate price.

Design/methodology/approach

The approach taken is design science, an artifact of automatic pricing system for co‐branding goods.

Findings

The results reveal that PT is superior to expected utility theory in terms of adjusted perceived prices and decision weight probabilities.

Practical implications

This paper aims to provide clues for industries in terms of providing a customer‐centric pricing method, systematic and automatic approach, and pricing‐based strategic information system.

Originality/value

The proposed pricing method: applies value‐based method to estimate the co‐brand price, considers risk and real‐world decision making, provides an efficient and effective approach, and enhances the competitiveness of price through the system.

Citation

Chang, W. (2008), "A value‐based pricing system for strategic co‐branding goods", Kybernetes, Vol. 37 No. 7, pp. 978-996. https://doi.org/10.1108/03684920810884360