The Research On Product Two-stage Pricing With Considering Word-of-mouth Effect

The rapid development of the Internet makes the market information more and more "transparent".Consumers can learn about all kinds of differentiated products anytime and anywhere and may also consider the utility of purchasing products in the future.So the decision-making behavior becomes more "rational".At the same time,compared with organized information sources,consumers are more inclined to obtain product reviews from experienced consumers.In other words,product word-of-mouth that breaks through the limitation of time and space has a great impact on consumers’ purchasing decisions.Therefore,how to make use of consumers’ strategic behavior and product word-of-mouth to make reasonable pricing,and how to seize word-of-mouth to optimize operation performance in the face of imitative competition threat especially.These are issue that enterprises can’t ignore.Based on this,the paper considers the impact of new product word-of-mouth,constructs a two-stage pricing model for new products of monopoly enterprises and a differentiated product pricing model for competitive enterprises.Based on the backward induction to obtain the optimal pricing strategy and income of products.Then,the paper analyzes the influence of consumers’ strategic behavior,product word-of-mouth and product similarity on the enterprise competition.The results show that the word-ofmouth effect makes enterprises have the motivation to reduce the pricing of new products in the first stage,while the price trend in the second stage is affected by the structure and strategic degree of consumers.The additional utility brought by word-ofmouth exceeds the negative effects brought by consumers’ strategic behavior,and the high word-of-mouth can weaken the competitive threat of followers’ imitations.What’s more,competition will help to improve the revenue of technology leading enterprises in the first stage when the word-of-mouth coefficient of new products and the proportion of strategic consumers are low.Relying on product reputation and first mover advantage,the market demand and profit of technology leading enterprises are much higher than those of the following enterprises in the competition stage.In addition,it isn’t that the higher the similarity of imitation products,the greater the profit.According to the research conclusions,the following suggestions can be provided for enterprises.1.According to the structure of consumers in the market,intelligent dynamic pricing——high price or low price strategy can be adopted when new products are launched;2.Whether there is competition or not,it is better to adopt penetration pricing strategy when new products are launched at a low price and word-of-mouth is expected to be high;3.When competing products are expected to exist,the enterprise needs to appropriately reduce the two-stage pricing of new products,and the adjustment extent depends on the consumer structure,product word-of-mouth and similarity of imitation products;4.Enterprises should strengthen the research and development of new products.The first to launch new products can effectively play a first-mover advantage.Compared with innovative products,the following enterprises should choose imitation products with medium quality level;5.Enterprises can emphasize the scarcity of products or release the signal of price increase in the later stage to slow down the delayed purchase behavior of strategic consumers;6.Enterprises should pay attention to word-of-mouth communication of products,strengthen product publicity,and strengthen word-of-mouth effect of products through good customer relationship management,so as to improve consumers’ recognition and perceived utility of new products.