Research On Price Discrimination Policy For Remanufactured Products Considered On Consumers’ Income Level

With the gradual increase awareness of environmental protection, waste products for recycling and remanufacturing caused more and more countries and enterprises’attention. Remanufacturing activity can reduce the environmental pollution and waste of resources, at the same time creates a huge profit value for companies and improves the competitiveness of enterprises. However, remanufacturing activity changes the original product cost structure, in order to obtain more profits; companies must re-coordinate and determine the price relationship between remanufactured products and new products. Currently, the role of price discrimination is gradually be concerned by enterprises in the research about remanufactured products’pricing strategy. Through the price discrimination, companies can get more consumer surplus than a single pricing, so the price discrimination strategy becomes an important strategic means for companies to earn profits.This paper is against this background, on the base of summarize of the achievements in the past, I research the price discrimination for remanufactured products that when the manufactures consider the consumers’income levels in a monopoly market environment. According to the different income level, manufacturers divide the consumers into two types and segment the market, introduce the value discount ratio, and analyze the different demand of the two types of consumer for new products and remanufactured products, take two different pricing strategies for different market needs, market with a higher proportion of high-income consumers implements the low-price strategy, on the contrary, market with a higher proportion of low-income consumers implements the high-price strategy. In this paper I choose the manufacture as the research main body, and the optimal prices for new products and remanufactured products in different markets as the decision variable, built two kinds of revenue maximization model for manufacturers. The first model adopts the single pricing strategy for remanufactured products, and the second model adopts the price discrimination strategy for remanufactured products that considering consumers’income level on the basis of the first model. By solving the models, I get the optimal pricing decisions for both products to manufacture in different markets. Then, I verify that the price discrimination strategy which considers the income level can enable manufactures to obtain more profits than the single pricing strategy by a numerical example. And I analyze the influence of the related parameters on the two pricing strategies and manufacturers’ profits, and verify the correctness of the relevant conclusions in this paper, show the practical significance of this study intuitively.The conclusion of this study will help to provide some more effective pricing methods for enterprises, and gain some valuable policies to the enterprise operation management to enable the enterprises get the optimal profits, and provide some guidance significance to the subsequent research.