Study On Product Pricing Decision Model Of Company A

The State Council issued the <National Integrated Circuit Industry Development Promotion Program>,which clearly pointed out that "the integrated circuit industry is the core of the information technology industry,is the strategic,basic and pilot industries to support economic and social development and guarantee of national security",and with a series of industry support policies released and industrial funds established,integrated circuit industry ushered in an important strategic development period.Company A as an integrated circuit design enterprise,has developed rapid by taking advantage of the polices.With more and more competitors arise,the competition gets more and more intense on product and price.This makes company A's marketing strategy,especially the pricing strategy face a severe test.Company A's usual subjective and empirical cost-plus pricing method has been unable to adapt to the new competitive pattern.Company A mainly develops power ICs,high-tech products.The products include the following four categories: PSR power switch / controller,SSR power switch / controller,MOS synchronous rectifier power switch / controller,Buck constant voltage power switch for smart home application.Product life cycle of high-tech product is shorter than general merchandise.With the technology of integrated circuit continuously improved,Company A's products iterative update quickly;iterative products exist at the same time in the market.Combining the actual situation of Company A's products,this paper defines the ways of the products' update.One is plug-in update,that is,new product launches while the old product is in its maturity period.The second is parallel update,that is,new product launches while the old product in its growth period.This paper analyzes different pricing strategies for plug-in updates and parallel updates.By setting up different pricing objectives,the plug-in update aims to maximize the overall profit of the iterative products,parallel update to clean up the inventory of old product and promote the new product promotion,respectively,to establish different mathematical models,and finally obtain their own optimal solution.Comparing the optimal solution with Company A' former pricing strategy,the author gets conclusion that the new pricing strategy is feasible.The pricing strategy model based on the product lifecycle for series of products is a static model assuming that a same price throughout a certain period,subject to constant product costs and no inventory constraints existing.The actual operation of a company is a dynamic,multisectoral joint decision-making process.The sales price of each period,the production cost,the storage costs change randomly,and owing to the cost pressure,the inventory is also limited.Based on the above practical conditions,this paper establishes a dynamic decision model of inventory and product pricing under inventory constraints,establishes the goal of maximizing profit during a certain period,and obtains the optimal price and optimal replenishment quantity through planning.Comparing the optimal value of the model with the value of the previous pricing strategy,the author proves that the joint decision of the pricing and the replenishment can realize the maximizing accumulated profit in a certain period.The above-mentioned product pricing model: plug-in update pricing model,parallel product update pricing model and dynamic decision model of inventory and product pricing under inventory constraints are a microcosm of Company A's scientific pricing strategy.Other company A's products' pricing strategy can also be determined by establishing similar model.In the case of Company A,the implementation of the pricing strategy is only achieved by clarifying the pricing objectives,having a scientific method of calculation,strengthening interdepartmental coordination,and archiving and updating market data.