Pricing a Product Line

Article Abstract:

A problem of establishing price for a product line wherein the products are partial substitutes for each other and the prices of successively higher quality products can be sequentially fixed is considered. One model class has definite computational methods and market data resulting from current strategy can be input to find improvements through price arrays. The model permits quantity discounts, allows for customers' diversity, and assesses competition effects. The model treats product differentiation as a single quality dimension, treats customer characteristics as a single one dimensional continuum and treats competitive lines and products as fixed rather than considering the various responses. Tables and graphs of mathematical formulation concepts are featured in this model analysis. Tables of data on conditions for optimal price policy are also featured. Machine operating cost is treated as a variable portion of the payment schedule to function as a surrogate for a quality attribute. Pricing policy is found to be a tool of product differentiation.

Models, Economic policy, Pricing

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Firm Specific Differentiation and Competition among Multiproduct Firms

Article Abstract:

A multifirm market of firms producing many variants of one good where customers select single variants to buy is considered. When interfirm competition decreases the price of a single variant, the prices for other variants may also be forced down. Competition in a single variant submarket can impact the level of competition in other submarkets. There may be some motivation not to produce full product lines because of this profit position of firm specific differentiation in variant submarkets. In the problem's general formulation firms, consumers, and equilibrium are specified mathematically. A basic model of monopoly is then promulgated to illustrate a firm's use of customer variant choices. Several aspects of the monopolistic findings are applicable to multifirm cases. Multiproduct competition is explained in light of firm specific differentiation, symmetric equilibria treatments and asymmetric equilibria treatments.

Marketing, Equilibrium (Economics)

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Monopolistic competition and multiproduct brand names

Article Abstract:

The excess-capacity theorem pertaining to the tradeoff between variety and cost and monopolistic competition does not hold for firms in monopolistic competition that market more than one product under a single brand name. This argument is valid under certain conditions including marketing efforts must not be prejudged on grounds of redundancy, and they must spill over from one product to another. A counter-example to the excess-capacity theorem is developed.

Analysis, Marketing research, Market research, Brand name products, Brand names, Monopolistic competition

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