Effect Of Trade-ins And Pricing Strategies On The Durable-goods Design With Myopic Consumer

The paper research the problem that how the monopolist decides the product architecture,whether or no trade-ins and pricing strategies when the durable products upgrade.The durability of the durable product curbs the sales of new products.For increasing the sales of new products,the manufacturer uses the strategies to improve the quality of new product,introduces the trade-ins and changes the product architecture(from integrated architecture to modular architecture)to stimulate consumers to buy new products(or new module).The paper research the problem form two layers:the strategic level(product design,trade-ins and pricing strategies)and pricing level.The paper uses the optimal theory to build multi-constrains,pricing decision-making model,comprehensive considers the effect that the quality of the second version improving module,the discount factor of trade-ins,the discount factor and the factor of compatibility to influence the decision of the manufacturer.The first part(the third chapter),given the static pricing and no trade-ins,builds monopolist model.In the two periods,the part builds and analysis the modular architecture model.In the second period,the manufacturer has two choices:introduces the second version product and the second version improving module;only introduces the second version improving module.At last,the part builds and analysis the integrated architecture model.The research show,if the quality of the second version improving module isn't high,the price of integrated architecture is lower than the price of modular architecture.When the discount factor is intermediate amount,the manufacturer should choose the modular architecture and the compatibility can be poor.When the quality of the second version improving module is higher than threshold,whatever how much the discount factor,the manufacturer should choose the integrated architecture.The second part(the fourth chapter),puts the trade-ins into the previous chapter's model.The research show,when the rate of discount factor of the trade-ins is very low and discount factor is low,the manufacturer should choose the modular architecture and the compatibility can be no high.When the quality of the second version improving module is certain improvement,discount factor is high and the rate of discount factor of the trade-ins is high,the manufacturer can choose the modular architecture and the compatibility doesn't exceed the threshold,if the rate of discount factor of the trade-ins is low,the manufacturer can choose the integrated architecture.The third part(the fifth chapter),given dynamic pricing and no trade-ins,in the two period,builds and analysis the modular architecture model.In the second period,the manufacturer has two choices:introduces the second version product and the second version improving module;only introduces the second version improving module.At last,the part builds and analysis the integrated architecture model.It has two conditions:consumers who didn't buy the first version product can buy the second version product;consumers who didn't buy the first version product can't buy the second version product.The research show:the manufacturer only chooses the integrated architecture.The total profit can be increased through that the manufacturer decreases the price of the first version product(lower than the price of modular product)and set no lowly price(higher than the price of modular product).The fourth part(the sixth chapter),given dynamic pricing and trade-ins,in the two period,builds and analysis the model.The research show:the quality of the second version improving module,the discount factor of trade-ins,the discount factor and the factor of compatibility influence the product design.When the discount factor of trade-ins and the quality of the second version improving module isn't low,the manufacturer should choose the integrated architecture.The fifth part(the seventh chapter)combines the four previous models together:the manufacturer can decide the product design and whether or not trade-ins;the manufacturer can decide the product design and pricing strategy;the manufacturer can decide the product design,whether or not trade-ins and pricing strategy.At last,it concludes the results.The sixth part(the eighth chapter)concludes the whole paper's results,and points the future research's direction.To sum up,when consumer is myopic consumer,this paper research the problem that how dose the manufacturer decide the strategies of the product design and trade-ins and pricing.These results can instruct that the corporation make more profit and enhances the competitive of the corporation.Based on the practical background,the research has importance practical meaning.