Abstract
Pricing is an important decision for sustaining an enterprise’s competence. In monopolistic competition and oligopoly market, prices of individual firms are mutual interdependent, and further influence the sales volumes, profits and the industry price trend. Most systematic pricing studies in the past are qualitative, which provide the decision maker strategic guidelines. It is difficult for the decision maker to set a management-meaningful price digit based on the qualitative pricing strategies. In regard to quantitative research on pricing, game theory and dynamic pricing are the general methodologies. However, most of the studies are scattered and incomparable. They can only be applied to specific issues or industries. Empirical studies on the quantitative pricing models are also few. This research aims to develop a systematic decision framework, in which integrated quantitative pricing models can be constructed in accordance with the pricing strategies. The proposed framework incorporates market-skimming pricing, market-penetration pricing, leader pricing, parity pricing, low-price supplier, and harvesting strategy. This research also conducts an empirical study in the dynamic random access memory (DRAM) industry. This research compares the performances of the model prices with the industry average selling prices of four DRAM products, including DDR 256Mb, DDR 512Mb, DDR2 512Mb, and DDR2 1Gb. The results of the empirical study provide the viability of the proposed framework.