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Article
Publication date: 7 June 2019

Yufei Yan, Zuoliang Ye and Miao Sun

Nowadays, some online retailing platforms emerge to integrate transport capacity to provide standard distribution service for sellers. Such an integrated form of service is…

Abstract

Purpose

Nowadays, some online retailing platforms emerge to integrate transport capacity to provide standard distribution service for sellers. Such an integrated form of service is defined as delivery alliance (DA). To have a better understanding of how to price the service, this study aims to fixate on the seller’s problems and builds a series of profit maximization models in accordance with the two-sided market pricing theory within a platform business model.

Design/methodology/approach

In the present study, some optimization models are built in the two-sided market type and the optimal solutions are found in a three-dimensional decision space. By using the basic model as the benchmark, some optimization problems of DA in realistic situations are discussed. Particularly, a power-law-distribution model is established to deal with the uncertainty in forecasting. Also, a price-sensitive model and a loss-aversion model are presented to describe the various reactions of sellers to charging modes. Finally, some combined situations are discussed and the strategies are compared under the mentioned models.

Findings

By selecting the basic model as the benchmark, the specific pricing strategies are found for each context to yield the optimal profits. The flexibility of pricing strategy in the basic model and rigid pricing strategies in extended models, are discussed. As a result, the guidelines for the online retailing platforms are developed on designing and pricing the DA service.

Research limitations/implications

First, it would be interesting to expand the pricing plan of the platform. For instance, menu pricing and quantity discount have not been considered, which are common in practice. The time discounting has also been ignored. If the time value were calculated, the contract fees would be more critical due to the earliest of collecting money. Finally, those joiners who have huge order sizes are crucial for the ecosystem indeed, but arouse no attention. While in reality, they may have more power to bargain with the platform. Thus, how the platform competition affects the pricing strategies needs future research.

Originality/value

The optimal pricing strategies under these models are analytically found out, and it is shown that the presented models result in the same scale of joiners and profits in optimization. This suggests that DA works well in various behavioral contexts. This also suggests that DA is a significant controller in service quality improvement. Then, the optimal pricing strategies are compared among all the models. During this, it is discovered that the realistic contexts might reduce the profit, whereas an appropriate pricing strategy can pull this back without loss of service quality.

Details

Nankai Business Review International, vol. 10 no. 3
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 4 July 2008

Andreas Hinterhuber

Customer value‐based pricing is increasingly recognised by academics and practitioners as the most effective approach to pricing for companies wishing to achieve increased

33224

Abstract

Purpose

Customer value‐based pricing is increasingly recognised by academics and practitioners as the most effective approach to pricing for companies wishing to achieve increased profitability and sustained success. However, despite this apparent support for the implementation of value‐based pricing, the practical reality is that more than 80 percent of companies continue to price their products and services primarily on the basis of costs and/or competitive price levels. The present study investigates this phenomenon and identifies the main reasons for this gap between aspiration and reality.

Design/methodology/approach

A two‐stage empirical approach is employed: first, in a qualitative research, the phenomenon of implementation of value‐based strategies with groups of business executives participating in pricing workshops is explored. The result of this qualitative stage was then used to develop a questionnaire which was tested upon a significantly larger and more stratified population. Finally cluster analysis to summarize the results of this quantitative research stage was employed.

Findings

Based on a survey of 81 executives representing a wide range of B2B and B2C industries in Germany, Austria, China, and the USA, five main obstacles to the implementation of value‐based pricing strategies have been identified: deficits in value assessment; deficits in value communication; lack of effective market segmentation; deficits in sales force management; and lack of support from senior management. The paper also provides a range of remedies to overcome these obstacles.

Originality/value

In extant literature there exists a gap between: the widespread understanding of the superiority of customer value‐based pricing strategies; and the circumstance that customer value‐based pricing strategies are currently the least widely diffused major pricing approach. We cover thus gap by highlighting which obstacles exist to the implementation of value‐based pricing strategies and provide a series of remedies to overcome these obstacles.

Details

Journal of Business Strategy, vol. 29 no. 4
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 17 March 2023

Qi Sun, Yaya Gao, Qihui Lu and Yingyi Yan

Different external supply scenarios faced by the retailers will affect their choice of strategy when supply is disrupted and becomes far less than demand, urgently. This study…

Abstract

Purpose

Different external supply scenarios faced by the retailers will affect their choice of strategy when supply is disrupted and becomes far less than demand, urgently. This study focuses on analyzing both demand and supply side response strategies to meet customer demand and reduce the impact of the shortage during supply disruptions.

Design/methodology/approach

According to the quantity of products that the external market can provide, the external supply scenarios were divided into sufficient-type external supply and learning-type external supply. A two-echelon perishable goods supply chain was analyzed, and three kinds of contingency strategy models for downstream retailers were investigated. First, in the sufficient external supply scenario, the optimal price and transshipment quantity to maximize retailer's profits is discussed. Second, in the scenario of learning-type external supply, this study analyzes the optimal decision in three mechanisms of the hybrid strategy and their application: price priority mechanism, quantity priority mechanism and price–quantity balance mechanism. Furthermore, the influence of penalty cost and supply on the priority orders of different mechanisms was studied.

Findings

Results show that comparing the two pure strategies (pricing strategy and transshipment strategy)it was noted that the hybrid strategy produces the best results in sufficient-type external supply scenario. In the learning-type external supply scenario, a numerical study has shown the existence of three areas in case of penalty cost and supplier's capacity, and each areas has different priority orders of the three mechanisms. Under the situation of learning external supply, the retailer's optimal strategy is affected by parameters such as penalty cost and supply volume.

Originality/value

The main innovation of the work lies in the following: First; the external supply situation was divided into sufficiency type and learning type, which improves the external situation faced by retailers after the outbreak of emergencies, helps retailers understand the external situation, conforms to the actual situation and has certain practical application value. Second; in the context of learning external supply, there are three coping strategies for retailers, including: Price priority mechanism, Quantity priority mechanism and Pricing and transshipment balance mechanism. This will help retailers make strategic choices, make more scientific management decisions and improve the supply chain emergency management theory. Third; the demand side response was managed through the change of external supply during supply side recovery period and supply disruption. The proposed model enables managing and analyzing supply disruption efficiently and effectively via handling uncertainty by considering all aspects of decision-making process. The proposed model can be applied in various fields such as vegetable and fruit, fresh food, etc.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Open Access
Article
Publication date: 27 January 2023

Senyu Xu, Huajun Tang and Yuxin Huang

The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven…

1573

Abstract

Purpose

The purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven marketing (DDM) quality, cross-channel-return (CCR) rate and financing interest rate on the members' pricing and delivery-lead-time decisions and optimal performances, and analyzes `how to achieve the coordination within a dual-channel supply chain (DSC) by contract coordination.

Design/methodology/approach

This work establishes a DSC model with DDM, and the offline retailer can provide internal financing to the capital-constrained online manufacturer. The demand under the price is determined based on DDM quality, customer channel preference and delivery lead time. Then, combined with the Stackelberg game, the optimal pricing and delivery-lead-time decisions are discussed under the inconsistent and consistent pricing strategies with decentralized and centralized systems. Furthermore, it designs a manufacturer-revenue sharing contract to coordinate the members under the two pricing strategies.

Findings

(1) The increase of DDM quality will reduce the delivery-lead-time under the inconsistent or consistent pricing strategy and will push the selling prices; (2) The growth of the CCR rate will raise selling prices and extend the delivery-lead-time under the decentralized decision; (3) Under price competition, the offline selling price is higher than the online selling price when customers prefer the offline channel and vice versa; (4) The retailer and the manufacturer can achieve a win-win situation through a manufacturer-revenue sharing contract.

Originality/value

This paper contributes to the studies related to DSC by investigating pricing and delivery-lead-time decisions based on DDM, CCR, internal financing and supply chain contract and proposes some managerial implications.

Details

Industrial Management & Data Systems, vol. 123 no. 3
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 June 1994

Charles R. Duke

Standard approaches to price decisions are normally illustrated asstep‐by‐step developments that try to group pricing issues loosely intosome format. These current approaches do…

15981

Abstract

Standard approaches to price decisions are normally illustrated as step‐by‐step developments that try to group pricing issues loosely into some format. These current approaches do not emphasize the interaction of consumer characteristics with the competitive environment of each market. Describes a modified version of the Tellis Price Strategy Matrix to enable coordinated market issues and company strategies by directing emphasis on pricing issues and techniques that are appropriate and effective, given the consumers′ (or segment′s) as well as the company′s objectives, as constrained by the competitive nature of the product′s market. By using this type of matrix as a guide, product managers can quickly evaluate the appropriate issues of concern for a given pricing decision and then progress toward a pricing decision with more confidence.

Details

Journal of Product & Brand Management, vol. 3 no. 2
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 May 1995

Arthur Meidan and Alan C. Chin

Presents the results of an empirical study that investigatescomparatively the mortgage‐pricing determinants of national, regionaland local building societies. Considers and…

1421

Abstract

Presents the results of an empirical study that investigates comparatively the mortgage‐pricing determinants of national, regional and local building societies. Considers and discusses the importance of the three main generic strategies (focus, differentiation and cost leadership) and building societies′ main pricing objectives – profit margins, market share, and mutuality. The findings suggest that building societies′ mortgage pricing is influenced primarily by internal industry determinants – such as “costs” and “competitors′ prices” – and to a lesser extent by market‐related factors (customers′ perception of value and elasticity of demand). A large majority of building societies view profit margins, rather than market share, as their primary pricing objective. In order to facilitate this pricing objective, societies select strategies that match their size and market characteristics. Local building societies employ primarily a focus strategy, while national and regional building societies aim at achieving their profit margins mainly through differentiation and cost leadership strategies.

Details

International Journal of Bank Marketing, vol. 13 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 26 August 2021

Amr M. Wahaballa, Seham Hemdan and Fumitaka Kurauchi

Road pricing is an efficient strategy for managing urban traffic to relieve congestion. The macroscopic fundamental diagram (MFD), which relates the average network density and…

123

Abstract

Purpose

Road pricing is an efficient strategy for managing urban traffic to relieve congestion. The macroscopic fundamental diagram (MFD), which relates the average network density and flow, is a simple tool for assessing road pricing effects on transportation network performance. However, recent research indicates that it may have complexity (an MFD hysteresis loop), especially for city-scale networks. Although ignoring MFD hysteresis may provide inaccurate results, pricing models that consider this hysteresis are scarce. This paper aims to assess road pricing effects on network performance considering MFD hysteresis characteristics.

Design/methodology/approach

This paper evaluated different pricing strategies spatially and temporally and compared network performance based on MFD shape in the presence of MFD hysteresis loops. These strategies were developed on a multimodal (cars and buses) network using a multi-agent transport simulation (MATSim).

Findings

This study found that pricing some links for a short duration with an optimum charge calculated based on the MFD provides higher travel time savings than the previous relevant studies.

Originality/value

These findings may facilitate assessing road pricing effects on multimodal network performance considering MFD hysteresis.

Details

World Journal of Engineering, vol. 20 no. 2
Type: Research Article
ISSN: 1708-5284

Keywords

Article
Publication date: 31 January 2011

Kostis Indounas and George Avlonitis

The purpose of this paper is to investigate the conditions that led to the adoption of the three new industrial service‐pricing strategies, namely skimming pricing (i.e. a high…

6871

Abstract

Purpose

The purpose of this paper is to investigate the conditions that led to the adoption of the three new industrial service‐pricing strategies, namely skimming pricing (i.e. a high initial price), penetration pricing (i.e. a low initial price), and pricing similar to competitive prices.

Design/methodology/approach

In order to achieve the study's research objectives, data were collected through a mail survey from 129 transportation and 48 information technology companies. Moreover, 20 in‐depth personal interviews were conducted in the initial phase of the research.

Findings

Analyzing data from two industrial sectors, the study concludes that skimming pricing and penetration pricing relate to the company's corporate and marketing strategy and the service characteristics, while market conditions influence the adoption of pricing similar to competitive prices.

Research limitations/implications

Given the limited number of the sectors investigated in the current study, the research results may not be easily applicable to other industrial service contexts.

Practical implications

The findings reflect the complexity and multidimensionality of new industrial service pricing. Thus, a single mode for pricing decisions does not seem to exist. Given the uncertainty facing industrial firms when making price decisions, especially with reference to new services, a balanced approach paying attention to both inward‐ and outward‐looking determinants can ensure the effective price determination.

Originality/value

The originality of the paper lies in the fact that it constitutes the first attempt to examine empirically the aforementioned conditions in an industrial service context.

Details

Journal of Business & Industrial Marketing, vol. 26 no. 1
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 31 August 2010

Ching‐Wen Lin and Hsiao‐Chen Chang

The paper aims to explore the adoption attitudes of internal and external motivations by multinational enterprises (MNEs) concerning transfer pricing manipulation and to discuss…

6506

Abstract

Purpose

The paper aims to explore the adoption attitudes of internal and external motivations by multinational enterprises (MNEs) concerning transfer pricing manipulation and to discuss on pricing strategies of MNEs under different motives of transfer pricing manipulation.

Design/methodology/approach

The paper conducts literature reviews regarding motives of transfer pricing manipulation and then conducts questionnaire survey and expert interview to select and generalize the transfer pricing manipulation decision making. Analytic network process (ANP) is then applied to obtain factors' weights and model construction.

Findings

The paper finds that tax minimization is no longer the focus of transfer pricing manipulation strategies of Taiwanese MNEs, and their real concerns are winning maximum economic profits, enhancing the competitiveness of the enterprise, and effectively repatriating profits to parent companies in order to facilitate greater economic profits.

Research limitations/implications

It is found from the model that most of the transfer pricing manipulation motives are based on low‐price strategies, which circumvent the exchange rate risks of low quotes. A possible reason is that current business operational patterns that have been limited to the electronic industry adopt the quantity‐based pricing strategy of “narrow profit margin and large volume.” However, the transfer pricing manipulation has great influence on the financial structures of the enterprises. The enterprises, as a result, must understand and reinforce the working of pricing transfer manipulation in the business development.

Originality/value

The paper collects questionnaires and investigation results from experts and scholars and uses ANP to construct a complete pricing strategic decision‐making model that may be taken by actual MNEs under different motives, in order to provide reference to MNEs when making transfer pricing manipulation strategies.

Details

Industrial Management & Data Systems, vol. 110 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 12 January 2023

Guoli Wang and Chenxin Ma

Motivated by the wide application of procurement strategies in retailing, this paper aims to examine the effect of procurement strategies on decisions and profits and strategic…

Abstract

Purpose

Motivated by the wide application of procurement strategies in retailing, this paper aims to examine the effect of procurement strategies on decisions and profits and strategic inventory (SI) is considered.

Design/methodology/approach

The game-theoretic models are developed under a two-period fresh product supply chain (FSC), and consist of the mode of purchasing products only in the first period without SI (Scenario S), the mode of purchasing products in every period without SI (Scenario T) and the mode of purchasing products in every period with SI (Scenario TS).

Findings

Conducting the calculating and comparing, some major findings can be concluded. In general, two-period purchasing strategies (Scenarios T and TS) promote a higher freshness-keeping effort than the single buying strategy (Scenario S). Regarding the pricing strategy, SI and Scenario S can both contribute to obtaining a lower wholesale price, the retailer's pricing is relatively complicated and hinges on the consumer's sensitivity to freshness-keeping effort and the holding cost. Besides, comparing the sales quantity and the profit, the authors find that Scenario TS stimulates more demands and brings more profits for the manufacturer. However, Scenario TS is not the optimal selection for the reason that SI sometimes hurts the retailer and even the whole supply chain. Whereas, when the holding cost is in a certain range, Scenario TS will lead to a win-win situation.

Originality/value

The main findings of this study can give the enterprises some advice on the procurement strategies of fresh products and the decisions of pricing and the freshness-keeping effort.

Details

Kybernetes, vol. 53 no. 4
Type: Research Article
ISSN: 0368-492X

Keywords

21 – 30 of over 111000