Service Pricing Strategies Research Articles

The Effect of Service Quality and Price Strategy on Customer Satisfaction through Purchasing Decisions as an Intervening variable In 212 Mart Gowa, South Sulawesi Province

Along with the development of increasingly modern times, this has caused a lot of competition in the business world, including retail business. Every businessman needs to pay attention to the factors that influence customer purchasing decisions. The research objective is to determine the effect of service quality and pricing strategies on purchasing decisions, determine the effect of service quality and pricing strategies on customer satisfaction, determine the effect of purchasing decisions on customer satisfaction, to determine the effect of service quality and price strategies on customer satisfaction through purchasing decisions at 212 Mart Gowa The population in this study were all consumers who shop at 212 Mart Gowa determined as many as 100 respondents. Data collection techniques through observation, interviews, and questionnaires. While the data analysis technique uses validity and reliability, path analysis, hypothesis testing, and coefficient of determination. The results of the study found that service quality has a positive but not significant effect on purchasing decisions, price strategy has a positive effect but is not significant on purchasing decisions, service quality has a positive and significant effect on customer satisfaction, price strategy has a positive and significant effect on customer satisfaction, purchasing decisions have a positive effect and significant on customer satisfaction, service quality has a positive but not significant effect on customer satisfaction through purchasing decisions, and the price strategy has a positive but not significant effect on customer satisfaction through purchasing decisions on 212 Mart Gowa.

Optimal pricing in on-demand-service-platform-operations with hired agents and risk-sensitive customers in the blockchain era

On-demand service platforms are popular nowadays. Many platforms hire agents to serve customers who are risk sensitive towards the waiting-time. In this paper, we apply the mean-risk theory to analytically explore how the risk attitude of customers affects the optimal service pricing decision of the on-demand platform, consumer surplus (CS) of customers, the expected profit (EP) and profit risk (PR) of the platform (and the hired service agents). In the basic model, assuming consumers are homogeneous, we find that if the customers are more risk averse (risk seeking), the optimal service price will drop (increase). Comparing among the three different risk attitudes of customers, we find that when the customers are risk seeking, the CS and the platform's EP are highest, even though the platform's PR is also highest. While the opposite happens when the customers are risk averse. In the extended model with a market including customers with different risk attitudes, the blockchain technology helps the platform assess the proportion of risk seeking, risk neutral and risk averse customers accurately. We explore the optimal service prices under both the common pricing policy and the customized pricing policy (with-respect-to customer's risk attitude), and derive the value of blockchain technology mediated customized service pricing strategy. We conclude by highlighting that the risk attitudes of customers play a critical role in determining the optimal on-demand service pricing, and the blockchain technology is a valuable technological tool to help.

Dynamic Pricing and Exchange Rate Pass-Through: Evidence from Transaction-Level Data

Dynamic pricing is a widely employed pricing strategy for goods and services in which firms flexibly set prices, taking into account current market conditions. This paper studies theoretically and empirically the role of this pricing strategy in explaining the heterogeneous response of consumer prices to exchange rate fluctuations. We provide a theoretical model that illustrates how foreign producers and domestic retailers adjust prices to exchange rate fluctuations for three forms of dynamic pricing. Our model predicts that pass-through increases for clearance sales and with the capacity costs of producers in periods of high demand, while it decreases for advance purchases. We find robust empirical evidence for the model predictions using a unique German transaction-level data set of package tours at the daily frequency between 2012 and 2018 featuring rich variation of prices over time.

Cloud Services and Pricing Strategies for Sustainable Business Models: Analytical and Numerical Approaches

Previous studies have introduced different potential pricing strategies for cloud services. However, not much research has been done comparing subscription pricing and pay-per-use pricing, which are commonly used pricing schemes. Also, there are very few studies which analyze a two-part tariff pricing scheme for cloud services, even though this option may increasingly attract service providers as the cloud market becomes more competitive and the profit margin grows narrower. Previous research has focused on firms’ profitability rather than social welfare due to the limitations of free services. This study uses theoretical and numerical analysis to compare the social welfare and profitability of three pricing schemes commonly used by firms: subscription pricing, pay-per-use pricing, and two-part tariff pricing. It shows that the pay-per-use pricing is the best solution from the perspective of social welfare, which contrasts with the conclusion of a previous study stating that social welfare is maximized under a two-part tariff. This paper also shows that the two-part tariff is the most profitable pricing scheme for firms.

Value-Added Service Investment and Pricing Strategies of a Multilateral Distribution Platform Considering User-Homing in a Duopoly

In reality, there are many multilateral distribution platforms that compete with each other. There are differences in user-homing: some users belong to only one platform, while some belong to multiple platforms. In addition, to attract more consumers, these platforms often invest in value-added services (VASs). In this paper, combining utility theory and Hoteling model, we investigate the VAS investment and pricing strategies of a multilateral distribution platform with considerations of user-homing and cross-group network externalities in a duopoly. We compare two universal situations: situation ${S}$ (all consumers, advertisers and delivery staff are single-homing) and situation ${M}$ (the consumers are single-homing while the advertisers and the delivery staff are partial multi-homing). The main results are as follows: 1) the optimal transaction fee under situation ${M}$ is higher than that under situation ${S}$ ; 2) the optimal delivery fee and advertising fee under situation ${S}$ are higher than those under situation ${M}$ ; 3) there is a threshold of the marginal VAS investment cost in both two situations, below which no VAS investing is the optimal choice; and 4) the optimal profits under situation ${M}$ are higher than those under situation ${S}$ .

Dynamic pricing and time-to-market strategy in a service supply chain with online direct channels

Abstract Manufacturers’ operation strategies become considerably complicated due to more frequent product updating in the Internet economics. This paper deals with the multi-stage problem of pricing and time-to-market for multi-generation products sold through an online direct channel in a service supply chain with a manufacturer and a logistics service provider. The manufacturer introduces a new generation of products before the present one exits market. The old generation of product may or may not exit the market before the end of the sales period. The service provider is in charge of the logistics service from the manufacturer to the consumers. The manufacturer’s optimal pricing and introduction time strategies and the logistics service provider’s optimal service pricing strategy can be derived. When the substitution rate of a new product to an old one is closer to a threshold, the greater the competition between them, and therefore the lower their optimal prices and the sooner the old product exits market. Moreover, the optimal time-to-market for the new product is decreasing with the potential market share of two generations of products in the second stage. In addition, higher quality which leads to higher costs makes the product enter the market later. Finally, we use numerical examples to illustrate the strategies.

Pricing Strategies of Logistics Distribution Services for Perishable Commodities

The problem of pricing distribution services is challenging due to the loss in value of product during its distribution process. Four logistics service pricing strategies are constructed in this study, including fixed pricing model, fixed pricing model with time constraints, dynamic pricing model, and dynamic pricing model with time constraints in combination with factors, such as the distribution time, customer satisfaction, optimal pricing, etc. By analyzing the relationship between optimal pricing and key parameters (such as the value of the decay index, the satisfaction of consumers, dispatch time, and the storage cost of the commodity), it is found that the larger the value of the attenuation coefficient, the easier the perishable goods become spoilage, which leads to lower distribution prices and impacts consumer satisfaction. Moreover, the analysis of the average profit of the logistics service providers in these four pricing models shows that the average profit in the dynamic pricing model with time constraints is better. Finally, a numerical experiment is given to support the findings.

The optimization of pricing strategy for the wind power equipment aftermarket service

PurposeAlthough the wind power industry has been booming in China during the last decade, the development of wind turbine aftermarket service is still lagging behind, which seriously affects the operational efficiency of wind farms. If wind turbine manufacturers get involved in the aftermarket, the service pricing policy will impact the profits of both the manufacturer and the wind farm. Therefore, it is necessary to discuss an optimal service pricing strategy in the wind turbine aftermarket and design a method to improve electricity generation efficiency through service contract design. The paper aims to discuss these issues.Design/methodology/approachIn order to decide the maintenance quantity and channel effort level, the authors design a normal Stackelberg game and an efficiency value-added revenue-sharing contract and discuss two kinds of revenue increment sharing models under situations, in which the supply chain’s leaders are the wind farm and the wind turbine manufacturer, respectively.FindingsThe results show that in either case, there exist optimal power generation revenue-sharing ratios that can maximize profit. At the same time, the authors outline an optimal service pricing policy, maintenance demand policy and channel service effort-level policy. The results summarize the influences of wind aftermarket services on wind farms’ and wind turbine manufacturers’ profit, which provides managerial insights into the process of manufacturing servitization.Practical implicationsThe manufacturer’s channel effort level will influence the power generation increments very much, so the authors have developed a mechanism to stimulate the manufacturer improving the efficiency of aftermarket services.Originality/valueTaking the power generation increment revenue as the profit increment function, the authors discuss the influence of service price on the profit increment of the wind farm and the wind turbine manufacturer and also consider the influence of service price on the wind farms maintenance quantity and wind turbine manufacturers channel effort level.

Consumer decisions to repair mobile phones and manufacturer pricing policies: The concept of value leakage

Mobile phones have become ‘essential-to-have’ devices for information-gathering and social communication. They are being technologically advanced, while they are readily available at affordable prices. This motivates consumers to upgrade their mobile phones more frequently. Given these considerations and the lack of accessible repair services, mobile phones have a relatively short life span. The underuse of mobile phones, despite the fact that they are made durable, may result in losses or value leakage. In this study, a probabilistic approach is proposed to quantify the value leakage that may occur due to consumer’s decision to not repair broken mobile phones and simply replace them with new ones. A group of 208 mobile phone users has been surveyed to capture consumer’s time-dependent willingness-to-pay for repair services. Then, consumer’s repair behavior is combined with manufacturer’s repair service pricing strategies to calculate the probability of repair or replacement decisions over the life span of mobile phones. Finally, the total expected leakage risk is derived for both consumers and manufacturers. For illustrative purposes, it is shown that a manufacturer may lose up to 331 million dollars over a period of five years due to consumers’ decisions to not repair their cracked-screen mobile phones and switch to another brand.

Service operations to analyse cooperative and non-cooperative competition

This study addresses two kinds of competitive behaviour simultaneously: one from action – mobility barriers vs. the other, from reaction – mutual forbearance. We study service frequency and pricing strategy that the US domestic airlines have used against rivals. We attempt to show whether deliberately aggressive strategic action necessarily serves its purpose to deter rivals, or inadvertently stimulates retaliatory reaction. The Pearson correlation statistical method was employed to analyse the relationship between service frequency and price dispersion based on 79,080 observations of real time panel population data over the period of 1–30 September 2016, where the results were compared to the effects of mutual forbearance. The findings reveal that value contributed to coalitions by rivals from stronger leagues cannot overpower the effects of industry structure. On the other hand, collective security is a rational defence for weaker leagues to sustain their performance.

配送サービスにおける2人ゲーム混合戦略の構造解析 : 配送エリアの設定と価格戦略の視点から(理論・技術)

配送サービスにおける2人ゲーム混合戦略の構造解析 : 配送エリアの設定と価格戦略の視点から(理論・技術)

Model Strategi Pemasaran Jasa Konsultansi Kontraktor Di Kalimantan Selatan

Most of the general public of service users have not understood the value of construction consultancy services. This inhibits market opportunities in the private sector for construction consulting services particularly in South Kalimantan. The objective of the research is to create an appropriate marketing strategy for corporation construction consultancy services in South Kalimantan.Strategies can be identified by SWOT analysis, AHP analysis and Importance Performance Analysis. This research is done by giving questionnaire to the service users and construction consulting firms in South Kalimantan. The result of the research are, a model of the marketing strategy of the construction consulting service, Strength-Opportunity strategy, grow and build strategy, service pricing strategy, and a basic strategy. This is a collaboration between the marketing-mix and service quality.

Capacity Allocation and Pricing Strategies for New Wireless Services

Indoor cell phone users often suffer poor connectivity. One promising solution to this issue, femtocell technology, has been rapidly developed and deployed over the past few years. One of the biggest challenges facing femtocell deployment is the lack of a clear business model. This study investigates the economic incentive for cellular operators (also called macrocell operators) to enable femtocell service by leasing spectrum resources to independent femtocell operators. We model the interactions between a macrocell operator, a femtocell operator, and end‐users as a three‐stage dynamic game, and derive the equilibrium pricing and capacity allocation decisions. We show that when spectrum resources are very limited, the macrocell operator has more incentive to lease spectrum to the femtocell operator, as femtocell services can help cover more users and improve the utilization efficiency of the limited spectrum resource. However, when the total spectrum resource is large, femtocell service offers significant competition to macrocell service and, as a result, the macrocell operator has less incentive to enable femtocell service. We also show the impact of the additional operational costs and limited coverage of femtocell service on equilibrium decisions, consumer surplus, and social welfare.

One-side value-added service investment and pricing strategies for a two-sided platform

To widen user participation and increase profit, two-sided platforms may invest on value-added services (VASs) for users. Due to the cross-market network externality, the investment for one side would affect the utility of users on two sides, thus affect the demand and profit of the platform. In this paper, we investigate one-side VAS investment and pricing strategies for a two-sided platform. It is revealed that it is optimal to invest at the maximum level for any marginal investing cost below a certain threshold, and to decrease the investment when the marginal investing cost increases above the threshold. We find that compared with the case of no investment, the invested user side will always be priced higher, while the uninvested user side may either be priced higher or lower, depending on the relative magnitude of mutual cross-market network externalities. If both sides are priced higher after the investment, the price increment for uninvested user side could be larger than that for invested user side.

Service level agreement based adaptive Grid superscheduling

Grid computing brings heterogeneity and decentralization to the world of science and technology. It leverages every bit of idle computing resources and provides a straightforward middleware for integrating cross-domain scientific devices and legacy systems. In a super big Grid, job scheduling is challenging specifically when it needs to have access to vast amount of resources. The process of mapping jobs onto Grid resources requires significant consideration in terms of Grid architecture design, consumer demands and provider revenues. In this paper, we simultaneously utilize the legacy architecture of superscheduling, forwarding strategy, service level, success rate, and service pricing strategies and finally propose a service level agreement based on adaptive superscheduling (SAS) algorithm. SAS algorithm presents unified connectivity via efficient diffusion of jobs through the Grid infrastructure that is fueled from the previous scheduling events across the Grid. Moreover, by enforcing the service level agreement terms from a rich set of ask and bid prices, system performance, and load statistics, SAS successfully boosts revenue and utilization statistics. We perform an extensive experimental analysis for different Grid scales. Based on our experimental result, the SAS algorithm maximizes revenue while guarantees quality of service. More specifically, the quality of service is achieved through a high ratio of completed jobs and remarkable utilization of resources.

Cost–benefit assessment and implications for service pricing of electric taxies in China

This paper presents a methodology to assess the cost–benefit and develop the service pricing strategy of electric taxies in Shanghai, China. There are 4 kinds of electric taxi models being structured. The total life cycle cost model for cost–benefit assessment is developed with consideration of purchase cost, usage cost, and other operation cost. Three scenarios are defined, including gasoline price increasing, electricity price increasing, and battery cost decreasing. Then the service pricing model is proposed. The results indicate that the profitability of battery-swapping model is higher than that of the charging model. The taxi models with longer driving range have greater profitability than those with shorter driving range. With annually increasing rate of 8% of gasoline price, the electric taxi will obtain the same profit with the gasoline taxi in 5years. With annually increasing rate of 20% of electricity price, the service price of electric taxies will rise by 1%. When the battery cost decreases by 49%, the service price of electric taxies will be 4% lower than that of gasoline taxies.

Earth Orbiting Support Systems for commercial low Earth orbit data relay: Assessing architectures through tradespace exploration

As small satellites and Sun Synchronous Earth Observation systems are assuming an increased role in nowadays space activities, including commercial investments, it is of interest to assess how infrastructures could be developed to support the development of such systems and other spacecraft that could benefit from having a data relay service in Low Earth Orbit (LEO), as opposed to traditional Geostationary relays. This paper presents a tradespace exploration study of the architecture of such LEO commercial satellite data relay systems, here defined as Earth Orbiting Support Systems (EOSS). The paper proposes a methodology to formulate architectural decisions for EOSS constellations, and enumerate the corresponding tradespace of feasible architectures. Evaluation metrics are proposed to measure benefits and costs of architectures; lastly, a multicriteria Pareto criterion is used to downselect optimal architectures for subsequent analysis. The methodology is applied to two case studies for a set of 30 and 100 customer-spacecraft respectively, representing potential markets for LEO services in Exploration, Earth Observation, Science, and CubeSats. Pareto analysis shows how increased performance of the constellation is always achieved by an increased node size, as measured by the gain of the communications antenna mounted on EOSS spacecraft. On the other hand, nonlinear trends in optimal orbital altitude, number of satellites per plane, and number of orbital planes, are found in both cases. An upward trend in individual node memory capacity is found, although never exceeding 256Gbits of onboard memory for both cases that have been considered, assuming the availability of a polar ground station for EOSS data downlink. System architects can use the proposed methodology to identify optimal EOSS constellations for a given service pricing strategy and customer target, thus identifying alternatives for selection by decision makers.

Research on TPL Service Level and Pricing Models in Supply Chain Coordination and Benefits Allocation

Research on the method to strengthen the cooperation among members to achieve win-win result is an important subject in SCM. Nevertheless, most studies to date on supply chain pricing have only assumed that the market demand is only influenced by retail price but not by logistics service level. That is why our work is concerned with logistics service and product pricing strategies in supply chain consisting of the manufacturer, the retailer and the TPL provider. For three-echelon supply chain system with TPL service level, use game theory to analyze its pricing, production, service levels and profit allocation. Three different models are discussed which are based on Stackelberg games and cooperative game. We find that the whole supply chain profit brought by collaborative decision-making is much higher than it independent decision-making brings based on the research. And it can increase the whole profit through reasonable setting of allocation proportion of profit. The study proposes multiple effective distribution methods of supply chain profit and takes an example to perform empirical analysis on the results to proof effectiveness.

Pricing policies for services by facilities with Weibull lifetimes

To make good profits, pricing is a competitive weapon of service firms. This paper is concerned with pricing strategies for services with substantial facility maintenance costs. To address the problem, a mathematical framework that incorporates service demand and facility deterioration is proposed. The facility and customers constitute a service system driven by Poisson arrivals and exponential service times. The most common log-linear customer demand and Weibull-distributed facility lifetime are also adopted. By examining the linkage between customer demand and facility deterioration in profit model, pricing policies of the service are investigated. Then analytical conditions of customer demand and facility lifetime are derived to achieve a unique optimal pricing policy. Finally, numerical examples are presented to illustrate the effects of parameter variations on the optimal pricing policy.

Pricing for Mobile Data Services Considering Service Evolution and Change of User Heterogeneity

The recent increase in mobile data traffic has resulted in service quality problems. Although an economic approach to control congestion can be achieved by pricing, the current pricing schedule of mobile data services instead causes smartphone users to create more traffic. We establish a pricing model based on the distribution of demand types among heterogeneous users to improve the current tariff structure; our method mixes usage-based and fixed-fee pricing schemes. The results derived from the application of this model to survey data on willingness-to-pay for mobile data service demonstrate that the provider can decrease the amount of data traffic and increase the expected revenue by lowering the price for a unit of data and raising the fixed-fee level for unlimited service. The model also explains the changing weight of usage-based and fixed-fee pricing schemes by considering shifts in the type distribution through service evolution and proposes pricing strategies for future communications services.