The Pricing Research Of Bit Products Based On Experiential Value

Own to the computer and Moore’s Law, there are more and more new products in people’s daily life. These products are composed of 0 and 1, so we called them "bit products". As the bit products with new features, some of the traditional economic laws obsolete. Performance in the field of pricing:the marginal cost pricing method becomes invalid. We can find an interesting phenomenon:the price of some software products is much higher than its cost.To explain that interesting phenomenon and solve the pricing practices of bit products, the paper introduces the concept "experiential value", hoping to get the pricing laws of bit products from the Starbucks coffee experience and its high price.Firstly, this paper systematically analyzes the theoretical foundation of pricing bit products:the price formation mechanism includes three stages, five types of factors, and "consumer-oriented pricing decision" which will explain why the marginal cost pricing method failures. A general method of pricing bit products is proposed too.Secondly, the paper discusses the experiential value of bit products. It finds that bit products are also experience products, and the value of the bit product is experiential value. It is meaningful to pricing bit product based on its experiential value.Finally, the paper applies the principal agent theory and the theory of consumer choice to constructs the concept model and the mathematical model of pricing bit product based on its experiential value and the enterprise profit maximization as the goal. Through the model simulation, this paper demonstrates how to use the experiential value pricing method, and then explores the optimal price level and pricing strategy advice in different situations.There are few researches on the pricing theory, model and method based on experiential value before, which obviously is the innovation of this paper. All the results will be a part of the bits economy theory, and also provide guidance and reference to the actual practices of pricing the bit products.