Cause-Related Product Pricing with Regular Product Reference

Xin Li (), Minghui Xu () and Dongsheng Yang
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Xin Li: School of Economics and Management, Wuhan University, Wuhan 430072, P. R. China
Minghui Xu: School of Economics and Management, Wuhan University, Wuhan 430072, P. R. China
Dongsheng Yang: School of Economics and Management, Hubei University of Arts and Science, Xiangyang 441000, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2021, vol. 38, issue 04, 1-21

Abstract: Inspired by the universal application of cause marketing (CM) campaign, this paper develops a game theoretical model to investigate cause-related product pricing problem. By considering the customer’s prosociality level and reference behavior, where the overall utility of regular product as a reference point, we separately study the cause-related product pricing strategies for competitor with and without response. Analytical results show that consumers’ purchase behaviors (i.e., differential levels of prosociality and reference recognition) significantly influence the cause-related product pricing decisions. When faced with consumers who have different purchase behaviors, the cause-related product pricing strategies should be adjusted accordingly.

Keywords: Cause-related product; pricing; reference; game theory (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0217595921500020

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