Pricing Strategies Research Articles

A Risk Management Strategy under Transfer Pricing for Multi-National Supply Chain along the Belt and Road Initiative

The “Belt and Road Initiative” (BRI) drives international trade more and more frequently, making exchange rates and taxes unavoidable issues for multi-national companies. Thus, exchange risk uncertainty and tax saving planning should be considered in the operational decisions of a multi-national supply chain. This paper constructs a Stackelberg game model with four composite modes to explore the risk-taking and hedging strategy of retailers with reference-dependent psychology. The results show that: (1) exchange rate risk is transmitted through all subjects under the cost-plus transfer pricing strategy, while it is transmitted only between headquarters and retailers under the resale-price transfer pricing strategy. (2) No matter which subject bears the exchange rate risk, the motivation is stronger under the resale-price transfer pricing strategy. (3) The effect of futures hedging exchange rate risk is influenced by retailer reference-dependent psychology. When the reference dependence coefficient is low, and the risk of positive exchange rate fluctuations is too high, the retailer chooses to hedge its exchange rate risk. At this time, the transfer pricing strategy should shift to cost-plus, and the exchange rate fluctuation range that each entity can afford is larger than before hedging.

Microcredit Pricing Model for Microfinance Institutions under Basel III Banking Regulations

Purpose. The purpose of this research is to propose a tool for designing a microcredit risk pricing strategy for borrowers of microfinance institutions (MFIs). Design/methodology/approach. Considering the specific characteristics of microcredit borrowers, we first estimate and measure microcredit risk through the default probability, applying a parametric technique such as logistic regression and a non-parametric technique based on an artificial neural network, looking for the model with the highest predictive power. Secondly, based on the Basel III internal ratings-based (IRB) approach, we use the credit risk measurement for each borrower to design a pricing model that sets microcredit interest rates according to default risk. Findings. The paper demonstrates that the probability of default for each borrower is more accurately adjusted using the artificial neural network. Furthermore, our results suggest that, given a profitability target for the MFI, the microcredit interest rate for clients with a lower level of credit risk should be lower than a standard, fixed rate to achieve the profitability target. Practical implications. This tool allows us, on the one hand, to measure and assess credit risk and minimize default losses in MFIs and, secondly, to promote their competitiveness by reducing interest rates, capital requirements, and credit losses, favoring the financial self-sustainability of these institutions. Social implications. Our findings have the potential to make microfinance institutions fairer and more equitable in their lending practices by providing microcredit with risk-adjusted pricing. Furthermore, our findings can contribute to the design of government policies aimed at promoting the financial and social inclusion of vulnerable people. Originality. The personal characteristics of microcredit clients, mainly reputation and moral solvency, are crucial to the default behavior of microfinance borrowers. These factors should have an impact on the pricing of microcredit.

The influence of service quality, price, and promotion on GO-FOOD user loyalty

This research aims to analyze the impact of service quality, price, and promotion on Go-Food users in Jakarta, Indonesia. A total of 150 respondents from Jakarta participated in this study, providing data through a distributed questionnaire. Utilizing IBM SPSS Ver. 25, the author conducted statistical tests on the collected data. Results revealed that service quality (X1) and price (X2) had no significant impact on customer loyalty. However, the promotion variable was found to significantly influence customer loyalty among Go-Food users in Jakarta. This suggests the need for Go-Food to reassess its service quality and pricing strategies. Additionally, this research provides valuable insights for GoTo investors in their decision-making processes. Future studies could explore other variables affecting Go-Food user loyalty in Jakarta, thereby contributing to the theoretical foundation of online food delivery services

Analisis Penetapan Harga Jual Produk dan Volume Penjualan: Studi Kasus pada Rumah Makan Raja Ayam Kota Gorontalo

This research aims to determine the selling price of products at the Raja Ayam Restaurant in Gorontalo City and to determine the sales volume of products at the Raja Ayam Restaurant in Gorontalo City. The research method uses a survey method. The primary data source in this research is the owner of Raja Ayam Restaurant, Gorontalo City. The data obtained will be presented in tabular form and analyzed descriptively. The results of the research show that the product selling price at the Raja Ayam Restaurant in Gorontalo City is determined by calculating all costs which consist of fixed costs and variable costs. Raja Ayam Restaurant in Gorontalo City uses a selling price method that involves a mark-up of 30% of the total production costs. Thus, the selling price of the product is calculated by adding 30% of the total production costs. This strategy provides clarity in determining prices and includes the desired profit elements. In the main menu of Rumah Makan Raja Ayam, the price of each package or size of chicken is determined by applying a certain mark-up above the purchase price. By using the Mark-Up Pricing Method, these prices cover the profits desired by business actors and provide an overview of the pricing strategy used in the Raja Ayam business in Gorontalo City. The average sales volume of Rumah Makan Raja Ayam reaches around 1,229 packages of chicken every month, with sales of around 40 packages per day. The net income earned every month reaches Rp. Rp. 29,388,093.18, and daily net income is Rp. 979,603.11. Stable sales volume and good income reflect the positive performance and operational success of Rumah Makan Raja Ayam in Gorontalo City.

Uncharted depths: Navigating the energy security potential of deep-sea mining

In the context of a global shift towards low-carbon energy systems, this paper provides an in-depth analysis of deep-sea mining's (DSM) potential role in enhancing global energy security. Addressing the growing demand for critical minerals essential for clean energy technologies, electric vehicles (EVs), and energy storage systems, the paper examines how DSM can diversify the global mineral supply and reduce reliance on geopolitically sensitive sources. It explores DSM's capacity to recalibrate energy prices, influence the competitive landscape of clean energy technologies, and shift geopolitical dynamics. The paper delves into the multi-faceted impacts of DSM on energy security, including geopolitical shifts, supply chain diversification, and environmental trade-offs. By providing a holistic view that links mineral supply security to sustainable energy transitions, this study extends beyond prior research focused mainly on the technical and environmental aspects of DSM. The findings illustrate DSM's intersection with international politics, its effect on energy pricing strategies, and the balance between resource exploitation and environmental stewardship. Strategic policy recommendations are offered to optimize DSM's benefits while minimizing its ecological impacts, aligning the emerging DSM industry with global sustainability goals. In addition to identifying challenges, the paper proposes actionable solutions, contributing a unique perspective to the discourse on DSM and energy security.

Pricing strategy and its impact on the effort of community leader and platform: Uniform or differentiated pricing?

This paper is motivated by the rapid development of community group buying (CGB), where the CGB platform dramatically relies on the community leader to provide last-mile services and fulfill consumers’ orders. Considering two types of community leaders, the friend role and seller role, this work adopts a game-theoretical model and investigates how the pricing strategy, uniform pricing strategy (N) or differentiated pricing strategy (Y), affects players’ performance and decisions on effort level. This study shows that the commission rate is an essential factor in stimulating the role transformation of community leaders. A significantly large commission rate results in the friend role community leader with lower trust value changing into the seller role. Generally, the community leader works harder under the uniform pricing scenario except in situations with a significant commission rate and moderate sensitivity coefficient of trust value. However, the effort level of the platform is jointly influenced by the pricing strategy, commission rate, and the role of a community leader. Moreover, regardless of the commission rate, when the community leader is a friend role and the trust value is high, both the platform and community leader can gain higher profits under the uniform pricing scenario than the differentiated pricing case. It indicates that a win–win situation can be achieved.

Measuring the brand and category effects of marketing activities on customers

Brands play an important role in shaping the impact of a company’s marketing activities on its customers. The key concept of customer-based brand equity in brand research suggests that the effects of different brands differ, even for identical marketing activities. However, empirical analyses that have confirmed the differences in marketing effectiveness across brands are scarce and even fewer studies have compared the effectiveness of multiple marketing activities simultaneously. As a comparison of marketing effectiveness relative to competing brands is important for brand management, this paper presents a method for measuring the differences in marketing effectiveness across brands. The paper employs a hierarchical Bayesian model to compare the effects of pricing and promotional strategies across six makeup cosmetics brands on customers’ responses in Japan. The results reveal that: (a) there are differences in marketing effectiveness between brands for both pricing and promotional strategies, (b) the extent of marketing effectiveness differs between brands for each marketing activity and (c) the effects of pricing and promotional strategies on customers’ responses differ between brands. These results indicate that the hierarchical Bayesian model-based measure for assessing marketing effectiveness proposed in this paper is effective for comparing brands, which highlights the need for different brands to adopt distinct marketing strategies. As the dominant strategy varies by brand, marketers should consider this aspect carefully. Future studies should examine whether purchase intention is directly linked to actual purchases as well as consider alternative independent variables (eg comparisons between promotional strategies) and dependent variables (eg willingness to pay and brand choice).

Sell on, sell to, or sell through: The sales performance implications of brand-platform selling arrangements

Despite the growing prevalence of online retail platforms, scant research has focused on how different selling arrangements affect brand sales performance on the platform. This study explores the sales performance implications of three brand–platform selling arrangements: 1P (a brand manufacturer sells to the platform for resale), 3P (a brand manufacturer sells on the platform), and 2P (a brand manufacturer sells through the platform using a hybrid model in which the platform handles all fulfillment). Utilizing a comprehensive dataset from a major U.S. brand-aggregator platform, encompassing 21,555 brand–category observations across 17 product categories, we examine the impact of these selling arrangements on brand sales performance on the platform. The findings reveal that 2P operations are generally associated with higher sales performance than 1P operations. We find no significant difference between 2P and 3P operations. The study also shows that the effectiveness of these arrangements is contingent on brand characteristics such as operational capabilities, innovativeness, and pricing strategies. This research contributes to understanding the nuanced interplay between platform selling arrangements and brand attributes, providing strategic insights for brand managers in the evolving online retail landscape.

Pricing policies for a competitive dual-channel supply chain with green investment and sales effort under revenue-sharing contract

In view of the mushroom development of web-based business and green production, a few organizations have moved to produce ecological friendly items and utilized the online channel to build up the competition. This paper deals with a two-echelon sustainable dual-channel supply chain containing two manufacturers and a single retailer. One manufacturer of the investigated supply chain produces a traditional non-green item, and another one releases a substitutable green item. The demand of both the item at the online and offline channel is a function of the sales price, greenness level, sales effort of the retailer. Furthermore, we have discussed the criteria for optimal pricing and greening strategy of supply chain members and the sales effort level of the retailer under a centralized and decentralized model. To enhance the supply chain performance, a revenue-sharing contract has been proposed, subject to the pareto improvement of each channel member. The numerical result demonstrates that the proposed revenue-sharing contract can enhance the manufacturer’s profit as well as system profit compared to the centralized and decentralized model and ensure higher profit for all the members than the decentralized model. Moreover, the item in the centralized model enjoys the highest green level than all other scenarios. Sensitivity analysis exhibits that a higher value of greening cost reduces the manufacturer’s green level, decreasing the sales price.

Sustainable inventory, pricing, and marketing strategies for imperfect quality perishable items with inspection errors and advertisement-, expiration date- and price-dependent demand under carbon emissions policies

The demand for perishable products is affected by freshness levels, advertising efforts and selling prices, among other factors. By virtue of being consumed mostly by humans, quality control is also an important factor in perishable production systems. Moreover, inventory management related operations in such production systems release sizeable quantities of carbon emissions that are often regulated by carbon policies. To study the interactions of all these attributes in the context of a perishable inventory system, this paper proposes four sustainable inventory models for a perishable product with imperfect quality, inspection errors and whose demand depends on the advertising frequency, expiration date and selling price. The emissions released are assumed to be governed by carbon tax and carbon cap policies. Two of the models are developed under the assumption that the quality inspection process is 100% effective while the other two models consider the possibility of committing inspection errors, and additionally, for each pair of models, one is developed under a carbon tax policy and the other under a carbon cap policy. All the models are aimed at jointly optimising the perishable product’s lot-size, advertising frequency and selling price. The numerical results show that the presence of inspection errors leads to 28% and 23% lower profits under carbon tax and cap policies, respectively. Moreover, profit can be maximised by either stocking perishable products with longer shelf lives or targeting customers that engage with advertising mediums and those that are not price-conscious, while emissions can be minimised via the enforcement of carbon policies.

An exact method for the two-echelon split-delivery vehicle routing problem for liquefied natural gas delivery with the boil-off phenomenon

In this paper we investigate a two-echelon vehicle routing problem for liquefied natural gas (LNG) delivery to determine how to transport LNG from an overseas production terminal to a set of import terminals by vessels, and transport the LNG from the import terminals to a set of filling stations either by tanker trucks or bunker barges. Some important features of this problem are that part of LNG will be evaporated during delivery and split deliveries are allowed at both import terminals and filling stations, which render the problem more intractable than those considered in most of the existing two-echelon vehicle routing studies. The objective is to find the optimal first-echelon and second-echelon delivery schemes to minimize the sum of the routing cost and boil-off cost. To solve the problem, we develop a customized branch-and-price-and-cut (BPC) algorithm incorporating a specialized labeling algorithm tailored to address the issues of LNG evaporation and split deliveries in solving the challenging pricing subproblems. To speed up the solution algorithm, we introduce some heuristic pricing strategies to quickly solve the pricing subproblems, and explore the (strong) k-path inequalities and subset-row inequalities to tighten the lower bound obtained by column generation. We conduct extensive numerical studies on simulation instances and a case study of LNG delivery in region along the Yangtze river, China to verify the effectiveness of the model and proposed algorithm. The numerical results demonstrate that our algorithm significantly outperforms CPLEX and the existing BPC algorithm on related topic, confirm the superiority of our integrated two-echelon solution method over its sequential solution counterpart, and illustrate that the locations of the production terminal and import terminals are highly related to the solution performance.

Real-time pricing considering carbon constraints for smart grid with multiple energy sources

With the escalation of fossil fuel pollution and the challenges of climate change, the smart grid is forced to address the carbon emissions associated with fossil fuel use. Real-time pricing of smart grid is an effective means to regulate the balance of supply and demand in the grid as well as to achieve energy conservation and environmental protection. This paper takes traditional fossil energy and clean energy power supply as the background, takes social welfare maximization as the goal, combines carbon emission cost with traditional power generation cost, and constructs a real-time pricing model that takes into account carbon emission cost, so that thermal power enterprises participate in the power market and carbon market at the same time. By using duality methods, we transformed the original optimization problem into an equivalent one. Furthermore, a distributed iterative algorithm based on the subgradient projection method is employed to solve the dual problem. The simulation results verify the feasibility and effectiveness of the proposed real-time pricing strategy.

Marketing Strategy of Tape Producers in Pematang Panjang Village

he aim of this research is to 1) Describe product strategies for marketing Tape. 2) Describe the pricing strategy for marketing Tape. 3) Describe the marketing strategy for Tape. 4) Describe promotional strategies for marketing Tape. This research was conducted using a qualitative approach with descriptive methods used in this research to describe the marketing strategy of Tape producers in Pematang Panjang Village. The subjects in this research were Tape craftsmen. The data collection technique was carried out by observing the location of the peat Tape craftsmen in Pematang Panjang, interviews and documentation in the form of recordings and pictures. Data analysis uses data reduction based on research objectives, presenting data based on descriptions and drawing conclusions. Test data validity and triangulation. As a result of the research, the concept used in the marketing mix for Tape is the 4P model because it is good enough so that the effectiveness of the four models can increase and continue to grow in marketing, especially the number of consumers. The marketing mix concept is used as a concept that develops a strategy which will later become a benchmark for the company in marketing so that it will get the desired target.

From code to coin: Unravelling the practical business impact of algorithmic pricing

This paper examines the impact of algorithmic pricing on company value and presents the results of 31 expert interviews in various industries. The focus is on nine hypotheses, including the efficiency of automation, segmentation and value-based pricing, efficient resource allocation, perception of fairness, price transparency and uncertainty, the use of personal data and price competition. The surveys show that algorithmic pricing has considerable potential for efficiency gains through automation, particularly in terms of revenue growth. The potential for cost savings, however, varies from sector to sector. Segmentation and value-based pricing are proving to be feasible, but their implementation requires clear justification and economic rationale. Efficient resource allocation through dynamic pricing shows potential, especially in industry-specific scenarios. The perception of unfairness can have a negative impact, however, and personalised pricing risks alienating customers and reducing business value. Price transparency and uncertainty have a mixed effect, as customers often place more value on the transparency of alternative offers than on the company’s pricing process. The use of personal data poses a low risk to company value if it is transparent and mutually beneficial. The potential intensification of competition through algorithmic pricing depends on the market structure and the company’s objectives; however, algorithmic pricing can be used as an instrument to reduce price competition and increase company value. Overall, the results make it clear that the integration of algorithmic pricing strategies must be carefully and ethically designed in order to sustainably increase company value.

Investment Value Analysis of BYD: An Integrated PEST and Financial Approach

This paper presents a detailed investigation into BYD Company Limited's investment value, incorporating a comprehensive Political, Economic, Social, and Technological (PEST) analysis with an in-depth financial evaluation. Findings from the PEST analysis underscore BYD's adept navigation of supportive government policies and its proactive stance against international trade challenges, affirming its strong domestic market position and readiness for global expansion. Economically, BYD has shown resilience through effective pricing strategies and market diversification, maintaining profitability amidst global financial fluctuations. Socially, the company's alignment with environmental sustainability trends has strengthened its brand and customer loyalty. Technologically, BYD’s advancements in battery technology and electric drivetrains position it as an industry leader. Financial findings highlight a robust year-over-year revenue increase of 42.04%, an impressive gross profit rise by 42.42%, and a significant leap in operating profit by 360.53%. Despite slight contractions in net profit margins, the company’s financial health remains strong with promising prospects for future profitability. Together, these analyses depict BYD as a compelling investment, poised for sustained growth within the NEV sector.

THE INFLUENCE OF DEBT COVENANT, PROFITABILITY, BONUS PLAN, AND EXCHANGE RATE ON TAX AVOIDANCE WITH TRANSFER PRICING AS AN INTERVENING VARIABLE IN RAW GOODS SECTOR COMPANIES ON THE INDONESIAN STOCK EXCHANGE

In companies operating in the Raw Goods Sector that are publicly traded on the Indonesian Stock Exchange, the objective of this research is to determine how debt covenants, profitability, bonus plans, and exchange rates influence transfer pricing. Furthermore, the study seeks to ascertain the impact of transfer pricing, equity markets, debt covenants, profitability, and compensation schemes on tax evasion within the Raw Materials Sector of Indonesian Stock Exchange-listed companies. The research methodology employed in this study is associative research. The subject of investigation is the raw materials industry on the Indonesia Stock Exchange throughout the period from 2018 to 2022. The population for this study consists of 96 companies registered on the Indonesia Stock Exchange in the primary consumer products industry, spanning from 2018 to 2022. The research employed a purposive sampling strategy. This research consisted of a sample size of 23 firms. The data analysis technique is facilitated by the utilization of a specific tool, namely Statistical Product and Service Solution (SPSS) version 26. The research findings indicate that the variables of debt covenant, bonus plan, exchange rate, and transfer pricing do not have any impact on tax avoidance. However, profitability is found to have a negative influence on tax avoidance. Debt covenant, profitability, bonus plan, and exchange rate do not impact transfer price. In addition, transfer pricing is unable to reconcile debt covenants, profitability, compensation schemes, and the impact of exchange rates on tax evasion.. Indonesia as a country that has many companies that have been successful at the national and international levels can increase sources of state revenue. As the company's profit rises, the corresponding tax payment also grows. This forms the basis for companies to employ tax evasion tactics in order to reduce their tax obligations. This study investigates the factors that influence tax evasion

Механізми тактичного управління торговельних підприємств на основі використання їх потенціалу в умовах розвитку е-бізнесу

The article is devoted to determining the essence and features of tactical management mechanisms of trading enterprises based on the use of their potential in the context of e-business development. It has been investigated that the electronic business market is currently developing, as evidenced by the increasing number of enterprises in the online sales market, the growth in sales volumes, and their share in the total trade volume. The advantages and disadvantages of trading enterprises transitioning to digital platforms are identified, along with the main threats that hinder effective development in this field, including war and logistics disruptions, the introduction of legislative restrictions, currency exchange rate instability, globalization of competition, etc. These threats necessitate optimizing strategies and appropriate tactical management mechanisms for trading and other business processes. It has been determined that the tactical mechanisms of trade activity in the electronic commerce market, based on the utilization of enterprise potential, are a set of measures and tools aimed at achieving the long-term development goals of the enterprise, as outlined in the strategy for market penetration and development in the e-business market, which involves the effective use of enterprise potential. These mechanisms ensure flexibility and efficiency in implementing strategic plans, contributing to adaptation to changes in the market environment and maintaining competitive advantages. It is noted that managing a trading company in the context of entering the e-commerce market requires an integrated approach that encompasses comprehensive marketing, operational, and financial mechanisms. The marketing mechanism includes brand promotion, assortment management, pricing, CRM, multichannel sales, and market analysis. Operational mechanisms involve optimizing the website, managing online advertising, implementing order management systems and efficient logistics, and using CRM tools to maintain customer relationships. Financial mechanisms focus on managing cash flows, optimizing costs, evaluating pricing strategies, and managing financial risks, ensuring the company’s stable growth and competitiveness. Keywords: trade enterprises, e-business, tactical management mechanisms, e-commerce, digital tools, trade enterprise strategy, enterprise potential, transfer potential, competitiveness.

Leveraging Vendavo for Strategic Pricing Management and Profit Analysis

In today's competitive market landscape, effective pricing strategies are paramount for maximizing profitability and sustaining a competitive edge. This paper explores the utilization of Vendavo, a leading pricing and profit optimization software, as a strategic tool for pricing management and profit analysis. Vendavo provides businesses with advanced analytics, allowing for data-driven decision-making that enhances pricing accuracy and responsiveness to market fluctuations. By leveraging its capabilities, organizations can identify pricing opportunities, evaluate customer profitability, and implement strategic pricing models tailored to their unique market segments. The integration of Vendavo into pricing processes facilitates real-time insights and fosters a culture of continuous improvement in pricing practices. This paper examines case studies highlighting the impact of Vendavo on organizations' bottom lines, demonstrating how strategic pricing management can lead to increased revenue, improved customer satisfaction, and enhanced market positioning. Additionally, the study addresses the challenges companies face when adopting sophisticated pricing solutions and offers best practices for successful implementation. Ultimately, this research underscores the importance of leveraging advanced pricing technologies like Vendavo in a dynamic business environment. By adopting a strategic approach to pricing management and profit analysis, organizations can navigate market complexities more effectively, ultimately driving sustainable growth and profitability. The findings advocate for a holistic view of pricing as a critical element of overall business strategy, reinforcing the need for organizations to invest in robust pricing tools to remain competitive.

A carbon integrated energy pricing strategy based on non-cooperative game for energy hub in seaport energy system

Seaports are significant energy consumers and sources of carbon emissions within the maritime industry. To address this problem, an energy hub (EH) can be established as an intensive energy interconnection center. This paper proposes a carbon emission flow (CEF) model based on the energy hub in seaport, which monitors the carbon emissions generated by the internal energy conversion unit operating within the hub. Additionally, a carbon integrated energy pricing strategy based on non-cooperative game theory is proposed. Based on duality theory and gradient descent method, an iterative algorithm is designed to seek the global optimal solution satisfying the Nash equilibrium point. The aim of the strategy is to encourage seaport energy consumers to adjust their energy consumption strategy according to the optimal benefits and reduce carbon emissions. A comparative study of three different strategy cases are conducted to evaluate the effectiveness of the proposed strategy. Numerical simulation results show the reduction of the total energy consumption and carbon emissions of the system, which is conducive to realizing the low-carbon operation of the seaport energy system.

Research on Tesla's Pricing Strategy in Chinese Market

As a leading global electric vehicle manufacturer, Tesla's performance in the Chinese market has a significant impact on the entire industry and market. The paper aims to analyze and evaluate Tesla's market pricing strategy in the Chinese market through SWOT analysis. Based on the analysis of pricing strategies, the paper also explores the impact of Tesla on the Chinese automotive economy market. Finally, the paper proposes some suggestions to address the challenges of future development and market expansion in the Chinese automotive market.