publication . Article . Other literature type . 1999

Optimal Pricing Strategy for New Products

Krishnan, Trichy V.; Bass, Frank M.; Jain, Dipak C.;
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  • Published: 01 Dec 1999 Journal: Management Science, volume 45, pages 1,650-1,663 (issn: 0025-1909, eissn: 1526-5501, Copyright policy)
  • Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Abstract
Robinson and Lakhani (1975) initiated a long research stream in marketing when they used the Bass model (1969) to develop optimal pricing path for a new product. A careful analysis of the extant literature reveals that the research predominantly suggests that the optimal price path should be largely based on the sales growth pattern. However, in the real world we rarely find new products that have such pricing pattern. We observe either a monotonically declining pricing pattern or an increase-decrease pricing pattern that does not seem close to the sales path. In this paper, we use a variation of the generalized Bass model (called GBM) developed by Bass et al. (...
Subjects
free text keywords: generalized Bass model, pricing, optimal strategy, diffusion, Management Science and Operations Research, Strategy and Management, Monotonic function, Economics, Sales growth, New product development, business.industry, business, Microeconomics, Extant taxon, Research stream
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publication . Article . Other literature type . 1999

Optimal Pricing Strategy for New Products

Krishnan, Trichy V.; Bass, Frank M.; Jain, Dipak C.;