COMPARATIVE ANALYSIS OF STRATEGIES OF PRICING AND PROMOTION OF PRODUCTS AND SERVICES ON NETWORK VALUES MARKET
https://doi.org/10.21686/2413-2829-2019-3-152-166
Abstract
The article studies conditions of dynamic pricing and marketing policy efficiency on network values market in circumstances of temporary supplier’s monopoly. The research method is economic-mathematic modeling of value cost dependence on the number of its consumers and demand for the value on price. By computer tests possibilities to use dynamic pricing for resolving three objectives are analyzed, they are maximization of net integral discounted profit of network value supplier; minimization of time necessary to reach the project repayment and minimization of time necessary to reach the maximum integral profit. The authors come to the conclusion about the importance of taking into account the peculiarities of network values markets for developing business marketing policy. They substantiate the expediency of using policy of network values differentiation (free provision of simple version of values and sale of extended version) in order to motivate net shaping and to speed up the achievement of project repayment. The economic-mathematic model of shaping network values market was put forward, which differs from existing analogues by more accurate reflection of specific rise in customer cost and shaping demand for these values. The model was used to get answers to two questions: which strategies of pricing can provide better indicators of project quality and whether it is reasonable to motivate demand by providing a free simplified version of value.
About the Authors
Viktor E. Dementiev
Central Economics and Mathematics Institute of RAS
Russian Federation
Russian Federation
Viktor E. Dementiev Corresponding member of RAS, Doctor of Economics, Professor, Head of scientific direction "Macroeconomics and Institutional theory" CEMI RAS.
47 Nakhimovsky Avenue, Moscow, 117418
Sergey G. Evsukov
Central Economics and Mathematics Institute of RAS
Russian Federation
Russian Federation
Sergey G. Evsukov PhD, Senior Researcher of the CEMI RAS.
47 Nakhimovsky Avenue, Moscow, 117418
Elena V. Ustyuzhanina
Plekhanov Russian University of Economics
Russian Federation
Elena V. Ustyuzhanina Doctor of Economics, Assistant Professor, the Head of the Department for Economic Theory of the PRUE.
36 Stremyanny Lane, Moscow, 117997
Russian Federation
Elena V. Ustyuzhanina Doctor of Economics, Assistant Professor, the Head of the Department for Economic Theory of the PRUE.
36 Stremyanny Lane, Moscow, 117997
References
1. Antipina O. N. Setevye otrasli informatsionnoy ekonomiki: kharakternye osobennosti, otrazhenie v teorii i podkhody k tsenoobrazovaniyu [Network Branches of Information Economy: Characteristics, Reflection in Theories and Approaches to Pricing]. Zhurnal ekonomicheskoy teorii [Russian Journal of Economic Theory], 2009, No. 1, pp. 88–104. (In Russ.).
2. Dementev V. Е. Strategiya operezheniya v usloviyakh oligopolnoy konkurentsii na rynkakh novoy produktsii [Strategy of Advance in the Conditions of the Oligopoly Competition in the Markets of New Production]. Teoriya i praktika institutsionalnykh preobrazovaniy v Rossii [Theory and Practice of Institutional Transformations in Russia], 2008, No. 10, pp. 5–14. (In Russ.).
3. Dementev V. Е., Еvsyukov S. G., Ustyuzhanina Е. V. Model tsenoobrazovaniya na rynke setevykh blag v usloviyakh duopolisticheskoy konkurentsii [A Pricing Model in the Market for Network Goods in Terms of Duopolistic Competition]. Ekonomika i matematicheskie metody [Economics and Mathematical Methods], 2018, Vol. 54, No. 1, pp. 26–42. (In Russ.).
4. Еvsyukov S. G., Sigarev A. S., Ustyuzhanina Е. V. Model dinamicheskogo tsenoobrazovaniya na rynke setevykh blag v usloviyakh monopolii postavshchika [Model of Dynamic Pricing of Network Goods in a Monopoly Provider]. Finansovaya analitika: problemy i resheniya [Financial Analytics: Problems and Solutions], 2016, No. 30 (312), pp. 2–18. (In Russ.).
5. Zhelobodko Е. V., Sidorov A. V., Tiss Zh.-F. Monopolisticheskaya konkurentsiya i oligopoliya v «bolshoy ekonomike»: velika li raznitsa? [Monopolistic Competition vs Oligopoly in the “Large Economy”: How Much is Difference?]. Zhurnal novoy ekonomicheskoy assotsiatsii [Journal of the New Economic Association], 2013, No. 3 (19), pp. 10–26. (In Russ.).
6. Litvin N. D. Modelirovanie protsessov tsenovoy diskriminatsii v elektronnoy kommertsii [Modeling of Price Discrimination in e-Commerce]. Trudy Dalnevostochnogo gosudarstvennogo tekhnicheskogo universiteta, DFU [Proceedings of the Far Eastern State Technical University, DFU], 2003, No. 135, pp. 89–98. (In Russ.).
7. Lyashchenko I. Yu., Pilyugina K. E. Otsenka effektivnosti differentsiatsii produkta na primere «bolshoy troyki» sotovykh operatorov Rossii [Evaluation of the Effectiveness of Product Differentiation on the Example of the "Big Three" of Russian Mobile Operators]. Sovremennaya ekonomika: problemy i resheniya [Modern Economy: Problems and Solutions], 2014, No. 7 (55), pp. 112–122. (In Russ.).
8. Matveev A. A. Marketingovaya differentsiatsiya kak instrument upravleniya prodazhami [Marketing Differentiation as a Sales Management Tool]. Upravlenie prodazhami [Sales Management], 2010, No. 6, pp. 364–370. (In Russ.).
9. Pleshchinskiy A. S. Analiz konkurentsii i sotrudnichestva pri razrabotke tekhnologicheskikh innovatsiy v otraslyakh promyshlennosti [Analysis of Competition and Cooperation in the Development of Technological Innovation in Manufacturing Industries]. Ekonomika i matematicheskie metody [Economics and Mathematical Methods], 2017, No. 3, pp. 38–58. (In Russ.).
10. Pleshchinskiy A. S., Zhiltsova Е. S. Analiz rezultatov modernizatsii proizvodstva v usloviyakh oligopolnoy konkurentsii innovatora i ego presledovatelya [Analysis of the Results of Modernization of Production in Conditions of Oligopoly Competition the Innovator and His Pursuer]. Ekonomika i matematicheskie metody [Economics and Mathematical Methods], 2013, No. 1, pp. 88–105. (In Russ.).
11. Rozanova N. M., Bulichenko D. A. Konkurentsiya v telekommunikatsionnoy otrasli: setevoy rynok v usloviyakh produktovoy differentsiatsii [Competition in the Telecommunication Industry: Network Market under Conditions of Product Differentiation]. Terra Economicus, 2011, Vol. 9, No. 1, pp. 17–32. (In Russ.).
12. Sigarev A. V., Pshenitsyna Е. I. Osobennosti rynka mobilnykh prilozheniy: modeli monetizatsii [Features of the Mobile app Market: Monetization Models]. Finansovaya zhizn [Financial Life], 2018, No. 2, pp. 49–55. (In Russ.).
13. Solntsev M. A. Osobennosti pozitsionirovaniya aviakompanii v usloviyakh uglubleniya differentsiatsii produktovogo predlozheniya [Features of Positioning of the Airline in the Conditions of Deepening Differentiation of the Product Offer]. Marketing i marketingovye issledovaniya [Marketing and Marketing Research], 2014, No. 6, pp. 450–459. (In Russ.).
14. Strelets I. A. Multiplikatsionnye effekty v setyakh [Multiplier Effects in Networks. Animated Effects in Networks]. Mirovaya ekonomika i mezhdunarodnye otnosheniya [World Economy and International Relations], 2017, Vol. 61, No. 6, pp. 77–83. (In Russ.).
15. Strelets I. A. Ekonomika setevykh blag [Economics of Network Goods]. Mirovaya ekonomika i mezhdunarodnye otnosheniya [World Economy and International Relations], 2008, No. 10, pp. 77–83. (In Russ.).
16. Torbenko A. M. Modeli lineynogo goroda: obzor i tipologiya [Linear City Models: Overview and Typology]. Zhurnal novoy ekonomicheskoy assotsiatsii [Journal of the New Economic Association], 2015, No. 1 (25), pp. 12–38. (In Russ.).
17. Akhlaghpour H., Ghodsi M., Haghpanah N., Mahini H., Mirrokni V. S., Nikzad A. Optimal Iterative Pricing over Social Networks. Saberi A. (ed.) WINE: Workshop on Internet and Network Economics, 2010, Vol. 6484, pp. 415-423.
18. Arthur W. Competing Technologies, Increasing Returns, and Lock-in by Historical Events. Economic Journal, 1989, Vol. 99, No. 394, pp. 116–131.
19. Besen S. M., Farrell J. Choosing how to Compete: Strategies and Tactics in Standardization. Journal of Economic Perspectives, 1994, Vol. 8, No. 2, pp. 117–131.
20. Brynjolfsson E., Kemerer C. F. Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market. Management Science, 1996, Vol. 42, No. 12, pp. 1627–1647.
21. Cabral L., Salant D., Woroch G. Monopoly Pricing with Network Externalities. International Journal of Industrial Organization, 1999, Vol. 17, No. 2, pp. 199–214.
22. Chen J. How Do Switching Costs Affect Market Concentration and Prices in Network Industries? The Journal of Industrial Economics, 2016, Vol. 64, No. 2, pp. 226–254.
23. Economides N. The Economics of Networks. International Journal of Industrial Organization, 1996, Vol. 14, No. 2, pp. 673–699.
24. Elmaghraby W., Keskinocak P. Dynamic Pricing: Research Overview, Current Practices and Future Directions. Management Science, 2003, Vol. 49, No. 10, pp. 1287–1309.
25. Farrell J., Saloner G. Standardization, Compatibility, and Innovation. Rand Journal of Economics, 1985, Vol. 16, pp. 70–83.
26. Fudenberg D., Tirole J. Customer Poaching and Brand Switching. The RAND Journal of Economics, 2000, Vol. 31, No. 4, pp. 634–657.
27. Hartline J., Mirrokni V. S., Sundararajan M. Optimal Marketing Strategies over Social Networks. In Proceeding of the 17th International Conference on World Wide Web 2008. Available at: http://wwwconference.org/www2008/papers/pdf/p189-hartline.pdf
28. Katz M. L., Shapiro C. Network Externalities, Competition, and Compatibility. American Economic Review, 1985, Vol. 75 (June), pp. 424–440.
29. Katz M. L., Shapiro C. Technology Adoption in the Presence of Network Externalities. The Journal of Political Economy, 1986, Vol. 94, No. 4, pp. 822–841.
30. Liu C., Kemerer C., Slaughter S., Smith M. Standards Competition in the Presence of Digital Conversion Technology: an Empirical Analysis of the Flash Memory Card Market. MIS Quarterly, 2012, Vol. 36, No. 3, pp. 921–942.
31. MacKie-Mason J. K., Varian H. R. Pricing Congestible Network Resources. IEEE Journal on Selected Areas in Communications, 1995, Vol. 13, No. 7, pp. 1141–1149.
32. Rohlfs J. A Theory of Interdependent Demand for a Telecommunications Service. Bell Journal of Economics and Management Science, 1974, Vol. 5, No. 1, pp. 16–37.
33. Saaskilahti P. Buying Decision Coordination and Monopoly Pricing of Network Goods. Journal of Economics & Management Strategy, 2016, Vol. 25, No. 2, pp. 313–333.
Review
For citations:
Dementiev V.E., Evsukov S.G., Ustyuzhanina E.V. COMPARATIVE ANALYSIS OF STRATEGIES OF PRICING AND PROMOTION OF PRODUCTS AND SERVICES ON NETWORK VALUES MARKET. Vestnik of the Plekhanov Russian University of Economics. 2019;(3):152-166. (In Russ.) https://doi.org/10.21686/2413-2829-2019-3-152-166
Views:
619
Email this article 