Optimal Pricing Strategy for New Products

Trichy V. Krishnan, Frank M. Bass and Dipak C. Jain
Additional contact information
Trichy V. Krishnan: Jesse H. Jones Graduate School of Management, Rice University, Houston, Texas 77005
Frank M. Bass: School of Management, University of Texas at Dallas, Richardson, Texas 75083
Dipak C. Jain: J. L. Kellogg Graduate School of Management, Northwestern University, Evanston, Illinois 60208

Management Science, 1999, vol. 45, issue 12, 1650-1663

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. (1994) that yields optimal pricing policies that are consistent with empirical data.

Keywords: generalized Bass model; pricing; optimal strategy; diffusion (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (75)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.45.12.1650 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:45:y:1999:i:12:p:1650-1663

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().