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ABSTRACT
This research explores the decision-making processes of manufacturers regarding pricing and durability of electronic durable products across successive generations. By constructing a two-stage model, we derived the optimal pricing strategy and production strategy for manufacturers. Specifically, we considered the impact of price reductions on older products and pre-launch activities for new products on consumer behavior, especially that of strategic consumers. An interesting finding is that traditional sales strategies of discounting older products do not increase revenue, but rather harm overall profits. Our results provide guidance for manufacturers of electronic durable goods in formulating strategies for product upgrades and new product sales strategies.
Disclosure statement
No potential conflict of interest was reported by the author(s).
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Notes on contributors
Lu Xiao
Lu Xiao, PhD in Management, is currently an associate professor at School of Management, Jiangsu University. She has been engaged in teaching management courses and conducting scientific research in management science and engineering for a long time. [email protected]
Yuehong Gong
Yuehong Gong, Master of Management, School of Management, Jiangsu University. Her research area is incremental innovation. [email protected]
Jun Wang
Jun Wang, Ph.D., is currently a professor at School of Mathematical Sciences, Jiangsu University. His research area is applied mathematics. [email protected]
Chaojie Wang
Chaojie Wang, PhD in Statistics, is currently an associate professor at School of Mathematical Science, Jiangsu University. His research area is applied statistics. [email protected]