A Two-Stage Pricing Study of Product Line Considering Value-Added Services

Abstract

With the advancement of society and technology, consumers are becoming more personalized and more willing to buy new products. To meet the diverse needs of consumers, the design and development of product lines have become an important strategic issue of enterprises. Based on the consumer choice model, this paper aims at the design and development of product lines and the purchase behavior of consumers. A two-stage pricing model is constructed under the condition of bundled sales of products and services. This paper analyzes the impact that enterprises should consider products with value-added services and consumers’ purchasing behavior on product line two-stage pricing. Research shows that the level of product value-added services and the degree of enterprise strategy will have an impact on the price of the product line and the enterprise’s profit. When the service level is higher, the enterprise’s product line price and profit will increase, and when the enterprise discount higher, the enterprise’s total profit and product line price will decrease.