Pricing strategies and firm performances under alliance brand

Abstract

PurposeThe purpose of this paper is to provide a framework to help competitive firms find optimal pricing and brand management strategies in order to maximize their respective profits.Design/methodology/approachA game‐theoretic model is developed to determine optimal pricing and brand management strategies for competitive firms.FindingsThe study demonstrates that optimal pricing and brand management strategies exist for firms in a competitive market. The optimum marketing strategy for competitive firms to employ is the cooperative alliance pricing and brand management strategy, particularly when market competition is very intense.Research limitations/implicationsThe present study assumes that all information is known to all parties. However, information could be incomplete. It is recommended that future research explore pricing and brand management strategies under incomplete and asymmetric information settings.Practical implicationsThe paper provides a very useful model framework and pricing and brand management strategy for business managers when they are doing business in a competitive market.Originality/valueThe paper fills a conceptual and practical gap for a structured analysis of the current state of knowledge about alliance brand. It provides practical and solid advice and examples demonstrating the application of cooperative alliance pricing and brand management strategies for business managers.