Aftermarket refers to a market in which a company sells complementary goods, replacements of parts, and upgrade or maintenance services to consumers after selling them main durable goods. Intuitively, consumers who purchase main durable goods become major potential customers in subsequent aftermarket. Thus the existence of the aftermarket has a significant impact on pricing of the main durable goods as well as the aftermarket products. In this study, we analyze the effect of aftermarket on the pricing strategy for a company selling both main durable goods and aftermarket products. To do this we first divided the market into markets where the aftermarket products are indispensable and optional. Based on the proposed market types, the profit maximizing solutions are derived using two-period model, and the impacts of consumers’ undervaluation of aftermarket product prices on pricing strategy are analyzed. The results can be summarized as follows : (1) Regardless of the market type, the total profits were found to be inversely proportional to the consumer’s awareness accuracy of product prices in the aftermarket. This is in line with marketing efforts that sales companies have made intuitively to make consumers underestimate the cost of the aftermarket. (2) If aftermarket product is indispensable, only revenue from the aftermarket is sought. On the other hand, if aftermarket product is optional, revenue from the main durable good as well as the aftermarket product will be sought simultaneously. (3) Moreover, when aftermarket product is optional, the lower the awareness accuracy of consumers, the higher the price and profit of the main durable goods, while the lower the price and profit of the aftermarket products. This is contrary to the intuition that the lower the consumer's valuation of the costs of aftermarket, the more advantageous it would be to rely on aftermarket products rather than on main durable goods.

People face various situations that they have to decide whether to buy or not, before uncertainty is resolved. Under the uncertain conditions, it is most crucial part for consumers that they should consider the expected valuation derived from purchasing tickets or services. Thus, it is important to contemplate buyer uncertainty about future valuation. Xie and Shugan presented the relationship between spot price and advance price in a situation that involves uncertainty. Their findings provide the explicit advance pricing strategies that can create profit improvements (Xie & Shugan, 2001). Their findings lay a foundation of this problem, because buyers are almost always not sure about their future valuations for most services (Xie & Shugan, 2001). In addition to these findings, the researchers found that profits under option pricing strategy outperform those from advance pricing strategy (Preethika Sainam, 2010). They introduce the concept of consumer options and analytically prove that consumer options can make more profits and also can protect consumers from the pitfall derived from unwanted outcomes (Preethika Sainam, 2010). In this paper, we want to consider this problem under more complex and real circumstances. We include one more pricing strategy, discounted advance pricing, which is often called early bird pricing. Furthermore, we divide consumers in two types, risk-neutral consumers and risk-averse consumers. We present a simple analytical model in what conditions each pricing strategies can out-perform others based on consumer types and capacity types.

This paper investigates how pricing actions of base and multiple add-on products sequentially offered in the marketplace affect their sales with a consideration of the interactive price relationships between base and add-on products and among multiple add-on products, as well as a moderating role of product characteristics.

The purpose of this paper is to suggest a supplier and buyer’s pricing decision strategy model with discount-policy over a long-term replenishment contract in a supply chain environment by small and medium size manufacturing company. We assume that the bu

본 논문은 공급 사슬 환경에서 중간 부품을 제조하여 기업을 대상으로 판매하는 중소 제조 기업의 가격 결정 전략에 대하여 연구하였다. 특히 국내에서 자동차 부품을 제조하는 중소 기업들이 고객사에게 중간 부품을 생산하여 납품하면, 고객사가 다시 이 부품을 활용하여 그 다음 단계의 부품을 생산하여 완성차 제조업체에 납품하는 공급 사슬 환경을 고려하였다. 중소 제조 기업이 생산한 부품의 완성차 탑재 여부는 완성차를 생산하는 대기업과 협상하고, 납품 가격은 해당 부품을 구매하는 고객사와의 협상에 의해 결정된다. 본 논문은 이와 같은 환경에서 중소 제조 기업이 최적의 가격 결정을 위하여 취할 수 있는 전략 수립을 연구하였다.

This study aims to investigate the effects of market commonality and resource similarity on price competition and the recursive consequences in the Korean lodging market. Price comparison among hotels in the same geographic market has been facilitated through the development of information technology, rendering little search cost of consumers. While the literature implies the heterogeneous price attack and response among hotels, a limited number of empirical researches focus on the asymmetric and recursive pattern in the competitive dynamics. This study empirically examines the price interactions in the Korean lodging market based on the theoretical framework of competitive price interactions and countervailing power. Demonstrating superiority to the spatial lag model and the ordinary least squares in the estimation, the results from spatial error model suggest that the hotels with longer operational history pose an asymmetric impact on the price of the newer hotels. The asymmetry is also found in chain hotels over the independent, further implying the possibility of predatory pricing. The findings of this study provide the evidence of a hierarchical structure in the price competition, with different countervailing power by the resources of the hotels. Theoretical and managerial implications are discussed, with suggestions for future study.