Research on Dynamic Pricing and Long-Term Profit of Companies under Influence of Word of Mouth

IF 5.1 3区 管理学 Q1 BUSINESS
Feiyan Han, Yunchao Guo, Haofei Yu, Bo Li
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引用次数: 0

Abstract

Word of mouth (WOM) is crucial in customers’ purchasing decisions and affects companies’ long-term profits. This study examines the long-term trends in companies’ dynamic pricing and profits by using the Hamiltonian function method and dynamic simulation to construct a dynamic equation. It takes into account the intensity of word of mouth faced by companies and analyzes the level of publicity and consumers’ predictions of product quality. In this paper, we also discuss the interactive processes between WOM and advertising levels, the two most prominent market factors, and their ultimate impact on companies. The experimental results show that elevated levels of external advertising can potentially prompt companies to establish higher product pricing strategies, particularly in scenarios where the intensity of word of mouth is pronounced. In the initial phases of market development, the saturation level of consumers within the market exerts a negligible influence on companies’ long-term profit margins. Conversely, the rate of natural attrition from consumers’ upper threshold of product quality expectations distinctly impacts companies’ profitability.
口碑影响下的动态定价与企业长期利润研究
口碑(WOM)对客户的购买决策至关重要,并影响公司的长期利润。本研究采用哈密尔顿函数法和动态模拟法构建动态方程,研究企业动态定价和利润的长期趋势。它考虑了企业面临的口碑强度,分析了企业的宣传水平和消费者对产品质量的预测。在本文中,我们还讨论了 WOM 和广告水平这两个最突出的市场因素之间的互动过程,以及它们对企业的最终影响。实验结果表明,外部广告水平的提升有可能促使企业制定更高的产品定价策略,尤其是在口碑强度明显的情况下。在市场开发的初期阶段,市场内消费者的饱和度对企业长期利润率的影响微乎其微。相反,消费者对产品质量期望值上限的自然损耗率会明显影响企业的利润率。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
9.50
自引率
3.60%
发文量
67
期刊介绍: The Journal of Theoretical and Applied Electronic Commerce Research (JTAER) has been created to allow researchers, academicians and other professionals an agile and flexible channel of communication in which to share and debate new ideas and emerging technologies concerned with this rapidly evolving field. Business practices, social, cultural and legal concerns, personal privacy and security, communications technologies, mobile connectivity are among the important elements of electronic commerce and are becoming ever more relevant in everyday life. JTAER will assist in extending and improving the use of electronic commerce for the benefit of our society.
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