Pricing Model Of Luxury Manufacture Under The Influence Of Counterfeiting

Brand counterfeiting is a common problem,and also an important theoretical research subject.With the deepening of globalization,counterfeiting of all categories has become a common phenomenon all over the world.With the entry of luxury brands into the Chinese market,more and more researchers are paying attention to luxury goods.On the one hand,counterfeit brings irreparable losses to luxury manufactures through damaging the brand image of luxury goods,reducing the brand's value and brand loyalty in the research.On the other hand,the number of counterfeits of a luxury brand is also an indication of the high popularity of this brand.counterfeit is not all negative for luxury.There are network externalities in luxury and counterfeit market because of the mutual influence of purchasing decisions now.Under the influence,it is worth to discuss how should luxury manufacturers respond to the prevalence of counterfeit and whether they can obtain greater benefits from it.Based on the above research background,this paper first builds four types of manufacturers' decision models in different situations,namely,the benchmark model of a luxury manufacturer's monopoly market,the influence of network externalities,and the competition between luxury manufacturers and counterfeit manufacturers.Decision model for single-channel sales and dual-channel sales of product manufacturers.After the model is established,the equilibrium solutions in different situations are obtained.The comparative static analysis and numerical analysis are used to explore the retail price,market demand,and profit of each case.Finally,the retail price,market demand and profit of commodities in different situations are compared respectively,the impact of counterfeit goods on luxury goods manufacturers and the dual-channel sales strategy of luxury goods from the perspective of network externality are analyzed,and corresponding decision-making suggestions are put forward.The research results show that when there are no network externalities,that is,consumers' decisions will not affect each other,counterfeit goods appear in the market,and competition with luxury goods will indeed damage the interests of luxury manufacturers and cause profits to decrease.When consumers' purchase decisions affect each other,that is,consumers are affected by network externalities of social networks,then negative network externalities of luxury goods and positive network externalities of counterfeit goods have different effects on luxury goods manufacturers.The negative network externalities of luxury goods reduce the profits of luxury goods manufacturers,so manufacturers should take measures to appropriately reduce the number of consumers.Positive network externalities of counterfeit goods are more favorable to luxury goods manufacturers,because the division of consumer groups is accelerated.Enabling luxury goods manufacturers to provide goods at higher prices without adopting price reduction strategies to attract consumers,that is,when the counterfeit goods market presents positive network externalities,it is beneficial for luxury goods manufacturers to exist in the market.Finally,after comparing the balanced results of single-channel sales and dual-channel sales of luxury goods manufacturers,it is found that the most advantageous for luxury goods manufacturers is that luxury goods are sold only in offline specialty stores or flagship stores,but online shopping is rapidly developing and counterfeit goods.Under the impact of this,luxury goods manufacturers also need to reasonably develop online sales channels.From the perspective of network externalities,through the research on the pricing of luxury goods manufacturers and their decision-making in the context of counterfeit products,it is concluded that counterfeit goods are beneficial to luxury goods manufacturers under the influence of certain network externalities.It can provide a certain basis for further research on luxury pricing and counterfeit countermeasures in the future.At the same time,it explores the issue of luxury sales channels under the influence of network externalities and provides corresponding decision support for the management practices of luxury manufacturers.