Premium Pricing Strategy Research Articles

Research on Changes in Travel Insurance Premiums Driven by Climate Change: A Case Study of Hong Kong Region

This research aims to study the impacts of climate change on worldwide general travel insurance in Hong Kong and to provide a scientific basis for premium pricing strategies in a climate-driven context. The study adopts both qualitative and quantitative research methods to reveal the relationship between climate change and travel insurance. The qualitative analysis part constructs a theoretical framework through literature review. Taking into account the current state of research, the impact of climate change on the demand for travel insurance as well as the challenges and opportunities of premium pricing strategies are discussed in depth. The quantitative analysis section collected data on flights at the Hong Kong International Airport (departures, delays, and cancellations) and travel insurance claim occurrence. The weather conditions were also checked through the weather website to analyze the correlation between climate factors and insurance claims. The findings indicated that climate change has a significant impact on the demand for travel insurance, especially during the prolonged rainy season in Hong Kong, when extreme weather events lead to an increased risk of cancellation or delay of travel plans. Meanwhile, the quantitative analysis results demonstrated a significant correlation between weather factors and flight status and insurance occurrence, which provided empirical evidence for risk assessment and premium pricing of worldwide travel insurance in Hong Kong.

Machine Learning Approaches for Insurance Pricing: A Case Study of Public Liability Coverage in Morocco

As data-driven technologies continue to advance, the importance of machine learning (ML) techniques in enhancing the accuracy of insurance premium calculations cannot be overstated. That is especially crucial because traditional actuarial methods often fail to incorporate individual risk factors fully. This limitation significantly impacts the insurance industry's capacity to accurately determine premium prices, which in turn affects financial stability and customer satisfaction. This research seeks to assess the efficiency insurance premium calculations through different regression models in ML, including polynomial, decision tree, random forest, and gradient boosting. The study employs rigorous analysis techniques using a comprehensive dataset from a Moroccan vehicle insurance company, including claim history and insurance categories. The dataset is split into training and testing sets to assess the accuracy of the ML models using metrics such as Mean Squared Error (MSE), Root Mean Squared Error (RMSE), and the coefficient of determination (R-squared). Initial findings suggest that ML models greatly surpass traditional actuarial methods, indicating the potential for machine learning to transform premium pricing strategies. That could result in more customized and financially sustainable outcomes within the insurance industry. The findings of this paper are likely to contribute to national insurance premium policy and expand the existing literature on this subject in Morocco.

The Competitive Challenges in China's Prepared Dishes Industry: A Focus on Anjoy Foods

This research investigated Anjoy Foods Co., Ltd.'s strategies in China's prepared dish market amidst the COVID-19 pandemic, focusing on the period 20202023. The pandemic led to a surge in demand for prepared dishes due to changing consumer behaviors, such as reduced outings and a scarcity of fresh food. Despite Anjoy Foods' revenue growth (from 673 million RMB in 2020 to over 3 billion RMB by 2022), its gross profit margin declined from 29.72% in 2018 to 11.42% in 2022. This paper employed the marketing mix theory (product, price, promotion, and place) to analyze Anjoy Foods' market strategies and identify key areas for improvement. The research highlighted that Anjoy Foods' product line fails to align with the growing consumer interest in health-focused and convenient food options. It also notes the company's premium pricing strategy as a disadvantage in a price-sensitive market. Additionally, the study pointed out a reduction in promotional activities, particularly in digital advertising, which affects engagement with key demographics. The paper suggested strategic innovations in product diversification, adopting tiered and value-based pricing models, and enhancing digital marketing efforts. These strategies aim to realign Anjoy Foods with evolving market demands and consumer preferences. The conclusion emphasized the importance of continuous adaptation and innovation for market competitiveness, recommending further research on practical strategy applications and broader market trends.

Review Study About Marketing Strategies Implemented During Covid -19 Pandemic in Both Global and Sri Lankan Context

Marketing strategies play a significant role in achieving an organization’s long-term goals and short-term objectives. In order to access and involve with target audience in a dynamic global environment, marketing strategies should be developed in modern competitive business world. Therefore, this research intends to clear the way to a review study about Marketing strategies implemented during COVID -19 pandemic in both global and Sri Lankan context. In fact, the importance of execution of proper marketing strategies as a driving force to gain competitive advantage during post COVID – 19 period in a dynamic business world primarily encouraged the researcher to conduct this study. As a result, investigation and critical review of previous and recent studies in line with the similar phenomena of research studies were conducted in order to absorb important details and findings. Through the review study, it was possible not only to have an understanding about marketing strategies implemented by different organizations under different industries in both Sri Lankan context and global context to combat COVID -19 pandemic to survive in the business but also it was possible to identify some challenges encountered by different organizations during COVID -19 pandemic. As a summary, it was evident through the derived conclusions of the review study that interaction of consumers with online shopping became frequent due to social distance and less movement with physical visit to shops and super markets during COVID -19 pandemic. Further to above, online shopping becomes a main preference by majority of consumers has created a challenging barrier for retailers to encourage people to visit their retail stores although unique elements of visual merchandising are a powerful marketing tool in attracting consumers in various industries. It can also be concluded through the study that consumers prefer to pay a higher price for luxury items or luxury goods associated with good brand reputation while previous studies also reveal that consumer ethnocentrism causes customers to overestimate locally produced items or goods compared to imported items or goods resulting in the rejection of foreign brands. When implementation of current marketing strategies of organizations under different industries both in Sri Lankan context and global context during post COVID – 19 period is considered, social media marketing strategy should be aligned by focusing on interacting more with customers by paying more attention to the aspects of creative content creation, correct targeting on influencers, localisation of brand based on location and proper data collection about consumer needs. Further visual merchandising strategy need to be integrated with online marketing and social media marketing of the organization by offering digitalized real time client experience on the website of the organization by utilising augmented reality concepts since consumers interact more with online shopping nowadays. When it comes to premium pricing strategy, it is vital for organizations to position the product or service in customers’ mind price as a quality indicator specially for products associated with an excellent brand reputation among customers to convey a message that high price indicates high quality. As per the derived conclusions, when consumer ethnocentrism is taken into consideration as a strategy, application of Indigenous Marketing is very useful to promote the requirement of manufacturing locally and buying locally to supplement ethnocentric ideals of citizens by making sure high-quality products and by reminding customers of the value of supporting domestic enterprises.

Analysis of Starbucks Marketing Strategy to Become a Luxury Brand

The goal of a marketing strategy is of course to create added value for customers and achieve superiority over competitors in the market. Starbucks is one of the largest and most successful coffee companies in the world. In this case study, an analysis of Starbucks' marketing strategy is carried out so that it can become a luxury brand. Starbucks has and established a very strong marketing strategy and focuses on changing their brand image to be more exclusive and luxurious. This case study was completed through research using the internet searching method where information was obtained from various references, journals and articles. So it has been found that the marketing strategy by Starbucks includes; (1) always innovating products, (2) adding various menu variants, (3) offering merchandise, (4) outlets spread across various cities, (5) word of mouth marketing strategy, (6) building a loyalty program, (7) premium pricing strategy, (8) supporting social movements, (9) providing various attractive promotions, (10) using gimmicks. By implementing this excellent strategy, Starbucks was able to rank first in the most popular coffee in the coffee sector. Starbucks is also able to become a luxury brand because Starbucks itself offers high quality coffee beans from all over the world.

The Effectiveness of Pricing Strategy on Purchasing Decisions for Bookkeeping and Chasiers Paccounting Applications by Panemu

This research was conducted to determine whether there is an effectiveness of pricing strategy on purchasing decisions for bookkeeping applications and cashier PAccounting by PT Panemu Solusi Industri. This study used a descriptive qualitative approach with direct observation methods and interviews by companies. The conclusion in this study is that companies apply several different Paccounting pricing strategies, including discount pricing strategies, freemium pricing strategies, premium pricing strategies, and psychological pricing strategies. Each strategy used has a different purpose, where the discount pricing strategy is expected to make consumers choose the highest price package, then the freemium pricing strategy focuses on attracting potential users with a trial period at no cost, while the premium pricing strategy offers consumers with a full-featured application, and the psychological pricing strategy aims to make potential customers think that the product is not expensive. The results showed that the four strategies had a positive impact on consumer interest seen from the increase in sales for 3 years.

A Stackelberg reinsurance-investment game under Heston's stochastic volatility model

<p style='text-indent:20px;'>This paper studies the optimal reinsurance-investment problem under Heston's stochastic volatility (SV) in the framework of Stackelberg stochastic differential game, in which an insurer and a reinsurer are the two players. The aim of the insurer as the follower in the game is to find the optimal reinsurance strategy and investment strategy such that its mean-variance cost functional is maximized, while the aim of the reinsurer as the leader is to maximize its mean-variance cost functional through finding its optimal premium pricing strategy and investment strategy. To overcome the time-inconsistency problem in the game, we derive the optimization problems of the two players as embedded games and obtain the corresponding extended Hamilton–Jacobi–Bellman (HJB) equations. Then we present the verification theorem and get the equilibrium reinsurance-investment strategies and the corresponding value functions of both the insurer and the reinsurer. Finally, we provide some numerical examples to draw the findings.</p>

How to advance regional circular bioeconomy systems? Identifying barriers, challenges, drivers, and opportunities

High rates of resource consumption and waste generation have put pressure on environmental systems and one of the solutions to this concerning behavior is a circular bioeconomy (CBE). However, for a CBE to succeed, new businesses and business models are needed, for which many drawbacks might be faced. Therefore, this article aimed (i) to identify the drivers, opportunities, challenges, and barriers for businesses in a CBE both from theoretical and practical perspectives, and (ii) to present the regional differences in those aspects for different continents. A mixed-method approach was adopted, comprising a systematic literature review and semi-structured interviews with 32 organizations from 18 countries in 4 continents (Africa, America, Australia, and Europe). Eight barriers and twenty challenges, as well as fifteen drivers and eight opportunities were identified. The main barrier and challenge pointed out by stakeholders were lack of financial resources/capital, and price competitiveness with traditional/linear product offers. The most prominent driver and opportunity were establishment of public policies/governmental support, and waste recovery. Regional aspects of CBEs (by continent) were also identified. Advancing CBEs requires setting strategies to overcome the lack of financial resources/capital, developing and/or making the adequate technology available locally, and enabling price competitiveness with traditional (linear and non-renewable-based) options. This study also unveils a series of managerial and business implications. There is the risk of rebound effects, such as waste becoming mainstream feedstock and bioproducts being introduced to the market on low-price strategies, thus triggering increased consumption. Premium pricing strategies need to be considered for bio-based products (compared with non-bio-based products). Moreover, technological development plays a role in driving innovation, and pioneers might lead the development of policies. For CBE systems to succeed there needs to be further technological development and greater connection among the actors in the value chain, converging in resilient circular business models for a CBE.

Carbon Offsetting with Eco-Conscious Consumers

In this paper, we model a firm that can reduce its carbon footprint in the presence of a segment of eco-conscious consumers, who consider the product’s carbon footprint when making purchasing decisions. The firm can reduce its controllable emissions at increased fixed and variable costs. The firm can also buy carbon offsets, at the price set by a nongovernmental organization (NGO), for both its controllable and uncontrollable emissions in the supply chain. We find that the firm should not use these two emission reduction methods as simple substitutes. In particular, as the offset price decreases, the firm may spend more efforts reducing its controllable emissions. Also, a firm’s decision to buy carbon offsets depends on the correlation between consumers’ preferences for the product function and for its environmental attributes, and this has implications for NGOs selling offsets. Specifically, although NGOs should price offsets as low as possible in most cases, we find some instances where a premium pricing strategy may be more effective in promoting lower-carbon footprint products, especially when eco-conscious consumers have a significantly higher valuation for the product than those who do not care about the environment, on average.This paper was accepted by Jayashankar Swaminathan, operations management.Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2021.4293 .

Netflix in India: expanding to success

Learning outcomes After completing the case, students should be able to understand: the importance and uniqueness of the individual market and developing a suitable marketing strategy. The concept of value creation and learn the importance of developing the right value proposition to compete and succeed in a market. The target audience and how to create the right marketing mix. Competition in a digital landscape and the importance of developing an appropriate strategy to counter its rivals and position the brand effectively. Case overview/synopsis During his visit to India in December 2019, Netflix’s founder and chief executive officer Reed Hastings talked about a series of steps the company had taken in the recent past to successfully face stiff competition and move towards achieving its stated target of 100 million viewers. These steps involved significant changes in their marketing mix such as reworking their pricing, developing a rich portfolio of Indian content and building various partnerships. Since Netflix’s launch in India (December 2016), it faced fierce competition from players such as Hotstar and Amazon Prime, both of whom had developed a rich portfolio of Indian content and adopted a very aggressive pricing strategy thus, making these changes essential. At the time of their launch, Netflix had set a very ambitious target of gaining 100 million viewers within five years (by 2021) while adopting a premium pricing strategy and positioning themselves uniquely based on their international content. They quickly learned that they would have to reevaluate their approach if they wanted to achieve their target on time. The changes announced by Hastings were an effort in that direction. The moot question was whether these steps would help Netflix India reach its goal. This challenge was further compounded by an almost 40% hike in data tariffs by three major wireless carriers considering most Indians watched over-the-top media content on their mobile phones. Complexity academic level The case is designed for undergraduates, as well as for fundamental marketing courses in the Master of Business Administration and other graduate level programmes. It can be taught in the Principles of Marketing, Marketing Strategy and International Marketing courses. It is ideal for topics such as understanding the operation of a digital business in a new market, customer value creation and value drivers, brand and brand positioning, product promotion, strategies for business growth and expansion, fighting competition in a digital landscape. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 8: Marketing.

Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Used by Various Industrial Sectors in Sri Lanka: Comprehensive Literature Review

Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Used by Various Industrial Sectors in Sri Lanka: Comprehensive Literature Review

Visual Merchandising, Premium Pricing and Consumer Ethnocentrism Marketing Strategies Adopting by Different Industries

Visual Merchandising, Premium Pricing and Consumer Ethnocentrism Marketing Strategies Adopting by Different Industries

A Comprehensive Review of the Literature on Visual Merchandising, Premium Pricing, and Ethnocentrism Strategies

A Comprehensive Review of the Literature on Visual Merchandising, Premium Pricing, and Ethnocentrism Strategies

Impact of Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Towards Consumer Behavior in Different Industries: Special Reference to Apparel Industry and Luxury Brands

Impact of Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Towards Consumer Behavior in Different Industries: Special Reference to Apparel Industry and Luxury Brands

Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Adopting by Various Industrial Sectors in Sri Lanka: Comprehensive Literature Review

At present, competition within market place is in a higher level than previously. Therefore, industries need to find for effective ways to survive within the market. As an effective way, they can come up with suitable marketing strategies by persuading customers to engage with them. The objective of this literature review is to identify previous scholars’ investigations on how marketing strategies; Visual Merchandising (VM), Premium Pricing (PP) and Ethnocentrism, used by various industries in an effective way in Sri Lankan context. This paper has been divided into three sections. First, outline an introduction including definitions of VM, PP and Ethnocentrism. Then, a methodology of literature review has developed based on previous scholars’ work for strategies; VM in apparel and supermarket industries, PP in tea, tourism and organic food industries and ethnocentrism in Fast Moving Consumer Goods (FMCG), handloom and milk powder industries. Finally, the conclusion outlines comparison of strategies to the marketing effort and discussion on future directions.

A Critical Summary of Literature Review Including Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Adopted by Industrial Sectors in Sri Lanka

A Critical Summary of Literature Review Including Visual Merchandising, Premium Pricing and Ethnocentrism Marketing Strategies Adopted by Industrial Sectors in Sri Lanka

BRANDING AS AN EFFECTIVE MARKETING STRATEGY FOR THE COMPETITIVENESS OF THE DAIRY INDUSTRY

The purpose of the paper is to justify the theoretical concept, to identify the main trends and develop practical recommendations for the use of branding by dairy companies to increase their competitiveness. Methodology. To achieve results, it is necessary to develop the theoretical foundations of branding; to consider the current state and trends of the dairy market in Ukraine; to analyze the experience of other countries using branding; determine the role of branding in the marketing strategy of the dairy industry. Results. The article proves the growing role of branding in ensuring the competitiveness of enterprises. The content of the concept of brand and branding as a component of marketing activities is revealed. The expediency of forming a premium pricing strategy is justfied. Peculiarities of branding on the market of dairy products of Ukraine are highlighted. The main trends in the development of the range of dairy products are studied: healthy nutrition, growth of the “vegetable milk” sector and lactose-free products. The target segment of consumers and its features, the main stages of the advertising campaign in promoting dairy products on the market are determined. Practical implications. Creating new brands of dairy products and distributing them to the market through branding is an effective method of ensuring the competitiveness of dairy products, but Ukrainian producers do not know how to use it successfully. This is due to the fact that competition in the field of dairy products is very high, and therefore the use of various measures to improve product quality and price measures of competition are quite limited. Therefore, non-price factors of dairy product competitiveness and non-price factors of competition come to the fore. Branding helps to reduce the cost of services to promote dairy products on the market and increase the commercial effect. The subject of research is a set of theoretical, methodological aspects of the organization and application of branding dairy companies in order to increase their competitiveness. Branding as an effective tool of communication policy of enterprises will ensure and then increase the competitiveness of poultry products through its personalized positioning and promotion.

Brand user imagery clarity (BUIC): conceptualization, measurement, and consequences

Brand user imagery is an important aspect of brand association and, consequently, brand equity. Extant conceptualizations emphasize content features of brand user imagery (e.g., convergence and favorability) but neglect the structural element of the concept, namely the clarity of the imagery. The purpose of this paper is to present the concept of brand user imagery clarity (BUIC) as a distinct and salient aspect of brand user imagery. Drawing on the associate network theory of memory, we offer a conceptualization of BUIC and then proceed to empirically validate a BUIC scale using data from 1172 consumers across four surveys and multiple industries. Results demonstrate the reliability of our 5-item BUIC scale. The scale consistently demonstrates convergent validity and discriminant validity (in relation to brand user imagery favorability, brand prestige, brand quality, and brand personality). Assessment of nomological validity identifies premium pricing strategy as a key determinant of BUIC and self-brand connection as an important outcome. This study contributes to branding literature by proposing BUIC as an important structural feature of brand user imagery and developing a reliable BUIC scale. It also contributes to the consumer–brand relationship literature by indicating the significant effect of BUIC on self-brand connection.

A Stackelberg reinsurance–investment game with asymmetric information and delay

ABSTRACT This paper investigates a Stackelberg stochastic differential reinsurance–investment game problem, in which the reinsurer is the leader and the insurer is the follower. The unequal status of the reinsurer and the insurer in the financial market is characterized by the asymmetric information model. We consider their wealth processes with delay to characterize bounded memory. The objective of the reinsurer is to find the optimal premium pricing strategy and investment strategy such that its constant absolute risk aversion (CARA) utility of the combination of terminal wealth and average performance wealth is maximized. The objective of the insurer is to find the optimal reinsurance strategy and investment strategy such that its CARA utility of the relative performance is maximized. We derive the equilibrium strategy explicitly for the game by solving corresponding Hamilton–Jacobi–Bellman equations sequentially. Then, we establish the verification theorem. The equilibrium investment strategy indicates that the insurer with less information completely imitates the investment strategy of the reinsurer who has more information on the financial market. Further, we find that the effect of the delay weight on the equilibrium strategy is related to the length of delay time. Finally, we present some numerical examples to demonstrate the findings.

Factors explaining a cost-based pricing essence

PurposeEmpirical studies have found that cost-based pricing remains dominant in pricing practice and suggest that practice conflicts with marketing theory, which recommends value-based prices. However, empirical studies have yet to examine whether cost-plus formulas represent the pricing approach or essence.Design/methodology/approachThis study aims to address the factors that explain price setting whereby the cost-plus formula is not just the pricing approach but also the pricing essence. This examination is grounded in a survey conducted on 380 Brazilian industrial companies.FindingsThe results show that, for price-makers, the cost-based pricing essence is positively associated with four factors (two obstacles to deploying value-based pricing, company size and differentiation), but it is negatively related to one factor (premium pricing strategy). For price-takers, the cost-based pricing essence is positively associated with four factors (two obstacles to deploying value-based pricing, coercive isomorphism and use of full costs), but it is negatively related to five factors (one obstacle to deploying value-based pricing, company size, competitors’ ability to copy, normative isomorphism and experience).Originality/valueThe key contribution of this paper is demonstrating that cost-plus formulas do not go against the incorporation of competitors and value information. This study reveals that it is possible to set prices based on either value or competitors’ prices while simultaneously preserving the simplicity of the cost-plus formulas. Via the margin, firms may connect costs to information about competition and value. The authors also demonstrate the drawbacks of not segregating companies into price-makers and price-takers and an excessive focus on the pricing approach at the expense of pricing essence.