Product Pricing And Advertising Strategy In Platform Business Ecology

In recent years,business ecology has gradually become a popular business model,increasingly playing an important role in the process of global economic development.Platform firms provide platforms for small maker firms to promote the R&D and sales of products and content of these firms.By establishing platform business ecology,more partners will enter into the platform for the development of products and services.Due to the complementary effect and platform effect in the platform business ecological model,the increase of products and services augments the flow of consumers and user demand.More and more firms choose to enter the platform to expand the sales market of products in order to improve the level of competition.The game theory and optimization theory are used to analyze the competition and cooperation behavior of firms in the platform business ecology,and the problems of product pricing and advertising strategy of firms are studied in this paper.First,the demand function under the benchmark model is obtained through the utility function,and the product pricing decision under the duopoly competition of the benchmark model is analyzed.Second,the demand function under the platform business ecology is obtained by expanding the utility function model.This paper obtains the impact of the platform business ecology model on the firms,consumer surplus and social welfare by comparing and analyzing the product pricing under this model and the benchmark model.Finally,considering the problems of product pricing and advertising strategy selection in the presence of platform effect,complementary effect and competition effect,the optimal advertising strategy conducive to the development of platform business ecological model is studied.Some conclusions of theoretical and practical significance are obtained in this paper.First of all,the platform business ecological model is beneficial to both the platform firms and the partners.Meanwhile,social welfare will also improve with the formation of the platform business ecological model.However,consumers may not benefit from the platform business ecological model,only when the product complementarity is low,consumers can benefit from the platform business ecological model.Second,platform firms should choose advertising strategies conducive to the development of firms according to the level of product complementarity and platform effect.When the platform effect is greater than a certain threshold,platform firms’ advertising on the platform is more conducive to the development of platform business ecological model.Finally,when the complementarity and competitiveness of products meet certain conditions,the advertisement of partners on their products is conducive to the development of all firms in the market,that is,firms achieve win-win-win situation.