Investment And Pricing Strategies Of Production Supplementary Service In Manufacturing Firm

Economic globalization has further intensified the competition of homogeneous products around the world, which results in firm's profit in product decreasing rapidly. Product supplementary service(PSS) is as a new resource of increasing firm's profit and keeping in the sustainable competition advantage of the firm, which is in excess of the complementary role on product. It is explained as"The Servitization of Manufacturing"phenomenon in these domestic and foreign literatures, on which has deeply studied from the view of industrial economics. These studies on the phenomenon have showed why some firms implement the PSS strategy. All this research is focus on description of the phenomenon, shallow analysis of mechanism and sketched model based on macro or medium level, which is lack of system analysis on firm's behaviors from the view of micro level and lack of quantitative methods on research. In view of this, based on the perspective of the enterprise decisionmaker, in the thesis it is analysed the investment and pricing strategy in the marketing process of PSS by adopting theories and methods of Game Theory, principle-agent theory, contract theory, consumer behavior theory and Marketing Science. The purpose of this study is to tell how and what the firm should do in the implementation processing of PSS.Firstly, it is studied in two steps that the investment policy in the marketing of PSS. PSS is conducted and developed by dominant firm and then provided to consumer under the cooperative effect with service channel. In the market with single service channel, there not exists competitor in the marketing process of PSS, in which the decision on investment and its impact on cooperative pattern of relational firms is the main problem. By adopting contract theory, in chapter 2 we develop separately mathematic model in vertical integrated pattern, Nash bargain pattern and principle- agent pattern and find the optimal effect levels and optimal allocation factor of the two firms. The optimal cooperative pattern is revealed through comparative analysis of the optimal profit in different pattern, of which the optimal prestage investment level is found also. On this basis, the research has extend to the condition of multiple service channels that direct service channel controlled by dominant firm and indirect service channels owned by other firm. Competition is the fundamental characterization of multiple service channels market. In chapter 3 it is studied that the prestage investment level of dominant firm and its impact on authorization in multiple service channels market. Through the game model it is revealed that the mechanism and constraint condition of authorization, in which the mechanism of royal fee combined with the fixed complementary fee is effective. It provides scientific basis for the dominant firm to make decision on authorization. It is proved that the more prestage investment level of dominant firm is the less the authorization level is.Secondly, we analyze the pricing policy of PSS in different market structure. In monopoly market, there always exists bundle price and unbundle price policy whether in product and PSS market monopolized by one firm or product and PSS market monopolized by two firms separately. Based on the bundle price theory, In chapter 4 we find the equilibrium prices of product and PSS in monopoly market under different price policy: bundle price policy and unbundle price policy. By numerical analysis of the relationship between optimal profits and exogenous factors under the two different price policies, we find the optimal price policy and its constrained condition. In this basis, we analyze the duopoly pricing strategy choice of manufacturer under considering two periods of sale of the product and Product-supplementary services in chapter 5. It is proofed that there exists only one Subgame Perfect Nash-equilibrium in the two periods Bertrand-Nash game as the duality of switch cost, and then comparative static analysis of the result with the Bertrand-Stackelberg game of product-supplementary services. It shows any increasing of switch cost will reallocate the share of service market and result in the decreasing of consumers'utility.The dualistic switch cost must be set up according to the precondition himself.It is the first quantity research about product-supplementary services as a direction of enhancing-profit. Based on this, in chapter 6 we take information asymmetry of market into consideration. In order to reduce the information asymmetry, commitment to PSS level becomes a decision variable in the Bertrand game. We investigate the impacts of commitment on the market structure and Bertrand competition in the PSS market with information asymmetry. A game theoretic model is employed to look for the Bertrand-Nash equilibrium in three kinds of market structure that is non-commitment PSS market,unilateral commitment PSS market and bilateral commitment PSS market. With the equilibrium on firm's pricing, profit and market share, it is analyzed that the characterization and condition of firm'behavior and its relationship with the market structure.