Market Skimming Pricing: An Examination of Elements Supporting High Price for New Products in Pakistan

Market skimming is a very important pricing strategy for the companies making innovative and technology based products. Market skimming pricing can be best practiced when the company is highly reputable, providing great quality and innovative products and the customers give a great value to the introduced technology and readily adopt it. The objective of this paper is to find out the factors responsible for market skimming pricing. In this research, the individuals using personal computers are taken as the population whereas Product quality, Brand image, Innovation and Technology adoption are taken as the variables responsible for practicing Market Skimming Pricing. A questionnaire is designed and the survey is conducted. The results showed that all the four variables significantly and positively influence market skimming pricing. The practice of market skimming pricing is explained up to 27% by the independent variables considered. Keywords: market skimming pricing, product quality, brand image, innovation, technology adoption

Pricing Models of e-Books When Competing with p-Books

With the rise in popularity of e-books, there is a growing need to reexamine the pricing strategy in the e-book supply chain. In this paper, we study two forms of pricing models widely used in the book industry: wholesale and agency pricing models. We first assume a stylized deterministic demand model in which the demand depends on the price, the degree of substitution, and the overall market potential. Subsequently, we employ the game theory to determine the price equilibriums and profit distribution under different pricing models. Finally, we explore the behavior of the publisher and the retailer under different preferences and degrees of substitution through a computational study. Our findings indicate that the e-book price will be lower under the agency pricing model than under the wholesale pricing model, which is counterintuitive. The publishers have higher incentives to adopt the agency pricing model than the wholesale pricing model. The agency pricing model benefits the whole system and can provide readers with books at lower prices. The degree of substitution between the two forms of books and the readers' preference toward e-book will affect the books' price and the profit distribution between the publisher and the retailers

Pricing information goods with piracy and heterogeneous consumers

We present an information good pricing model with persistently heterogeneous consumers and a rising marginal propensity for them to pirate. Three offsetting pricing mechanisms occur: skimming, compressing price changes, and delaying product launch. We identify a novel trade off in piracy's effect on welfare. We find that piracy quickens sales times and raises welfare in fixed capacity markets, and does the opposite in growing markets. In our model, consumers benefit from piracy except at very high rates in rapidly expanding markets, legal sellers always dislike it, and pirate providers like high but not very high rates. Purchase delay, transient heterogeneity, inelastic demand, and network externalities reduce piracy's effect, but demand uncertainty doesn't

Piracy on the internet: Accommodate it or fight it? A dynamic approach

This paper uses a dynamic stochastic model to solve for the optimal pricing policy of music recordings in the presence of P2P file-sharing networks eroding their sales. We employ a policy iteration algorithm on a discretized state space to numerically compute the optimal pricing policy. The realistically calibrated model reflects the real-world figures we observe and provides estimates of the optimal pricing policy as well as comparative statics figures. The pricing policy is such that, for a given P2P network size, prices are increasing in the number of buyers of the product and, for a given number of buyers of the product, prices are non-monotonic in the P2P network size. Surprisingly, in the presence of P2P networks, increases in production costs and decreases in the valuation of the product increase the consumer and total surplus. A higher valuation of the product leads to a lower steady state price. Increased switching costs have a negative effect on prices and profits, so the long term incentive to attract new consumers dominates the short term incentive to harvest loyal consumers. The full enforcement of intellectual property rights has adverse effect on both consumer surplus and total welfare. (C) 2017 Elsevier B.V. All rights reserved

THE EFFECTS OF CONSUMER ORIENTATIONS ON THE CONSUMPTION OF COUNTERFEIT LUXURY BRANDS

The emergence of ‘new luxury’ available at affordable prices has resulted in abundance of counterfeit products in the markets. As the extent of counterfeiting is increasing in almost every industry, it becomes critical to develop measures that can help to prevent buying and selling of counterfeit products. In exploring consumers’ buying behavior of counterfeit products, this study was designed to examine the influence of individuals’ characteristics or consumer orientations, both social and personal, on that generate the demand for counterfeit brands. This study employed four theoretical frameworks: (a) the Theory of Planned behavior, (b) Value-Attitude-Behavioral intention system, (c) Bandwagon effect in the theory of consumer demand, and (d) Aberrant consumer behavior. Specifically, this study investigates consumers’ intention to purchase counterfeit brands based on their social consumer orientation (social conformity, status seeking, fashion consciousness, and price-quality schema) and personal consumer orientation (ethical value, social responsibility, and integrity), attitudes toward the purchase of counterfeit brands, subjective norm, and perceived control over the purchase of counterfeit brands. Further, this study aims to explore the role of price sensitivity as a moderator in understanding the relationship between attitudes and intentions to purchase counterfeit and original luxury brands. This study was conducted in the context of fashion luxury brands that sell handbags and wallets. An online self-administered survey methodology was employed to collect the data from 500 subjects. The data were analyzed by maximum likelihood estimation (MLE) procedure using structural equation modeling (SEM). Out of total 14 proposed hypotheses, 10 were significant, as expected. However, the rest 4 were not found to be significant. Status seeking was found to have an insignificant relationship with subjective norm to purchase a counterfeit brand. Fashion consciousness was found to have a negative influence on attitude while the relationship of price-quality schema with attitude was not found to be significant. Also, integrity was not found to significantly influence subjective norm. Price sensitivity did not act as a moderator due to non significant relationships between attitude and intensions to purchase counterfeit and original brands. Research and managerial implications, limitations, and suggestions for future research were drawn based on the results

An Empirical Analysis to Control Product Counterfeiting in the Automotive Industry\u27s Supply Chains in Pakistan

The counterfeits pose significant health and safety threat to consumers. The quality image of firms is vulnerable to the damage caused by the expanding flow of counterfeit products in today’s global supply chains. The counterfeiting markets are swelling due to globalization and customers’ willingness to buy counterfeits, fueling illicit activities to explode further. Buyers look for the original parts are deceived by the false (deceptive) signals’ communication. The counterfeiting market has become a multi-billion industry but lacks detailed insights into the supply side of counterfeiting (deceptive side). The study aims to investigate and assess the relationship between the anti-counterfeiting strategies and improvement in the firm’s supply performance within the internal and external supply chain quality management context in the auto-parts industry’s supply chains in Pakistan