Pricing Of Product Lines And Value-added Services Considering Network Effects

With the increasingly fierce market competition and the diversification of customer needs,the design and development of products and value-added services is an important strategic issue affecting the development of enterprises in order to meet the consumer needs of heterogeneous customer groups and gain a larger market share.Nowadays,value-added services in consumption,finance and other areas of product homogenization,has become the pillar of all businesses to obtain customers.Because it can greatly affect customers’ consumption decisions,and value-added services and the main business can often penetrate each other,thereby deriving innovative businesses and promoting business turnover.In the era of sharing economy,customers pay more and more attention to products and services,and the network effect of value-added services will have an important impact on product revenue management.In the traditional pricing problem of product line and value-added service,the utility of customers’ purchase of products and services only depends on their personal characteristics,while considering the characteristics of network effects of products and services,customers’ purchase behavior will be influenced by other customers.In daily life,many products show strong negative network effect,such as high-end brand clothing and travel tools.Therefore,according to the market characteristics of products,the research on pricing strategies of product lines and various services considering network effects will have important theoretical value and practical guiding significance.In the process of product line and service design,customer choice model is an important tool to optimize product line and service.Multinominal Logit(MNL)model is applied to investigate multinominal logit(MNL)customer choice behavior and is applied to pricing optimization of product lines and valueadded services.The relationship between optimal decision and influencing factors is studied to provide decision support for product and value-added service pricing.Firstly,from the perspective of negative network effects,this paper considers the influence of sales changes at different sales stages on customer choice behavior,and studies the dynamic pricing of product lines.Based on MNL model with good applicability,the network effect characteristics of products are analyzed,the dynamic pricing model of product lines is established,and the optimal decision of dynamic pricing,market share and enterprise profit of product lines is studied.Secondly,the optimal pricing,market share and revenue of product line and service under pure bundling strategy and mixed bundling strategy are studied under the condition that both products and services have network effects.The optimal solution and profit difference between pure strategy bundling and mixed strategy bundling are analyzed.Then,in view of the negative network effect of both products and services,based on MNL model,the optimal pricing,optimal market share and maximum revenue of products and services of different quality under pure bundling strategy and mixed bundling strategy are studied,and the optimal solution and profit difference of quality difference under different bundling strategy are theoretically analyzed.Finally,considering the freemium business model,there is a single free basic product,a variety of services optimal pricing problem.The optimal pricing of a single service and the bundled pricing strategy of all services are studied.In each research stage,in order to better analyze the factors affecting pricing,the paper establishes a simulation system based on MATLAB platform to quantitatively express the influence of initial conditions and related parameter changes on pricing and profit results,and gives the corresponding management strategy.By analyzing the influence trend of various factors on optimal pricing,the research results can provide theoretical basis and decision-making reference for enterprises with network effect products in terms of product line and service pricing.The above research results can not only enrich the theoretical system of product line pricing,but also have important practical significance for the development and design of various services,product pricing and enterprise development strategy,and provide important decision-making basis for enterprises to formulate product line and value-added service competition strategy.