Loyalty program and pricing strategy under competition

• Main Authors: CHUNG-YU WANG, 王仲宇
• Other Authors: 曾富祥
• Format: Others
• Language: en_US
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/52440902394165558152

碩士 === 國立中央大學 === 工業管理研究所 === 104 === In the marketplace, because manufacturers have same process capability and offer consumers similar product selection. As a result, most sellers can only use some approaches, for example, pricing, promotion, service or others to enhance consumers to choose them. Simultaneously, consumers have too many channels to select and compare the pricing. Pricing strategy becomes important to sellers' decision. No matter initial pricing setting or he changes his pricing during selling period. Because it not only affects consumers’ behaviors but also affects sellers’ profit. In this paper, we try to use a competition pricing model at a fixed period to investigate sellers’ pricing strategy and expected profit. We incorporate internal and external reference price of economics to form the consumers’ utility function. Among the internal reference price means the price of their memory. External reference price means the effects of price of competition and promotion under sale environment. Moreover, we suppose the consumer utility function follows bivariate weibull distribution. As a result, we can depict a selection model of consumer which under a duopoly marketplace. We discuss under two environments, how influence about competition and promotion affect consumer reference price. First, we assume there are two sellers in the marketplace. If both of them without offer any promotion - a completely pricing competition environment - the variation of consumer reference price and sellers’ profit that under sellers' pricing strategies. Second, same environment – two sellers – but one of them offers a promotion – loyalty program – to consumers. When this moment, how is the variation of consumer reference price and sellers’ profit that under sellers' pricing strategies.