• KSII Transactions on Internet and Information Systems (TIIS)
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• v.15 no.8
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• pp.3068-3085
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• 2021

The economics of big data knowledge, especially cloud computing and statistical data of consumer preferences, has attracted increasing academic and industry practitioners' attention. Firms nowadays require purchasing not only external private patent knowledge from other firms, but also proprietary big data knowledge to support their new product development. Extant research investigates pricing strategies of external private patent knowledge and proprietary big data knowledge separately. Yet, a comprehensive investigation of pricing strategies of these two types of knowledge is in pressing need. This research constructs an overarching pricing model of external private patent knowledge and proprietary big data knowledge through the lens of firm profitability as a knowledge transaction recipient. The proposed model can help those firms who purchase external knowledge choose the optimal knowledge structure and pricing strategies of two types of knowledge, and provide theoretical and methodological guidance for knowledge transaction recipient firms to negotiate with knowledge providers.

• Management & Information Systems Review
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• v.9
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• pp.65-80
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• 2002

As the growth of Internet business, many web sites have been developed their own Internet business strategies. Yet, many web sites have difficulties to make profit. In this paper, an economic model is developed to analyze web sites' quality and pricing strategies when they initiate their services as free services and develop advertising services and other charged services. By analyzing the economic model, optimal quality and prices was found. And by analyzing the optimal strategy, I found that web sites should properly decide their market share on initial customer. Finally, the importance of web sites' productivity to make profit is emphasized.

• Management Science and Financial Engineering
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• v.11 no.3
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• pp.95-107
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• 2005

As online shopping malls have emerged as a substantial shopping channel, they have used various sales promotion strategies to acquire new customers. Most of these strategies have been applied by offline malls for years. One, loss-leader pricing, is a type of promotional pricing in which stores sell well known products below their marginal cost, in order to attract customers and induce them to purchase more goods through impulse buying. This strategy is based on the expectation that customers will factor transaction costs into their purchasing decisions. However, its application to online malls fails to recognize that transaction costs are lower online, and that customers will behave differently as a result. Our study predicts that loss-leader pricing will not work online because online malls entail lower searching and moving costs than offline malls The study examines the effectiveness of loss-leader pricing with empirical data from a survey as well as log data from a Korean online shopping mall. The results show that while loss-leader pricing does attract customers to online shopping malls, it encourages cherry-picking rather than impulse purchases of regular-price goods.

• Journal of Distribution Science
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• v.16 no.12
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• pp.13-21
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• 2018

Purpose - Because it is not possible to assess the quality of service products before experiencing them, one feature of a service product is quality uncertainty; hence consumers may react sensitively to pricing. It is necessary to investigate how different pricing strategies affect consumer purchase intention depending on the level of service quality uncertainty. Research design, data, and methodology - The authors have investigated the potential impact of the level of service quality uncertainty, price discount rate and presentation method on consumer purchase intention. A play was selected as an experimental stimulus, and Vietnamese consumers were surveyed to verify the hypotheses. Results - When uncertainty regarding service quality is low, consumer purchase intention is higher when the price discount rate is high or when the price is low. When uncertainty regarding service quality is high, if the normal price, discount rate, and discounted price are presented simultaneously, consumer purchase intention is higher when the price discount rate is low, but when only the discounted price is presented, purchase intention is higher when the price discount rate is high. Conclusions - The results of this study can provide valuable practical implications for pricing for service products with quality uncertainty.

• Korean Management Science Review
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• v.32 no.3
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• pp.55-70
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• 2015

The main objective of this study is to investigate the moderating roles of the competitor's pricing strategy and the degree of consumer's risk-aversion on perceived risk and perceived benefit in responding to price increases and package downsizing. Based on Prospect Theory, several prior researches find that consumers perceive increased price as more loss than package downsizing and perceive package downsizing as more benefit than increased price. We extend these behavioral economics approach using the reference effect of competitor's pricing strategy. We focus on consumer heterogeneity on risk-aversion, measure the degree of consumer's risk-aversion, and divide the consumers into two groups of high levels of risk-aversion vs. low levels of risk-aversion. We find that the firm's pricing strategies of both price increases and package downsizing do not significantly influence the perceived benefit for relatively low risk-aversion consumers. We find that when the firm reduce the package size, relatively high risk-aversion consumers perceived more benefit and had higher purchase intention compared to price increases. We also find that the competitor's pricing strategies do not significantly influence the consumer's response for relatively low risk-aversion consumers. For relatively high risk-aversion consumers, they perceived more loss when the firm has different pricing strategy from the competitor's.

• Journal of the Korean Operations Research and Management Science Society
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• v.31 no.3
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• pp.53-62
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• 2006

Many information providers in the electronic market struggle to attain revenue from their information goods including contents or other services and they tend to charge for their contents or services since they are confronted with difficulties in attaining revenue from online advertising. This study examines why they begin to charge for their contents or services and explores Pricing strategies for their contents. Also, this paper explores business strategies when conventional offline contents firms enter the online contents market and draws some implications for the condition of entry of offline contents providers into the online market.

• Asia pacific journal of information systems
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• v.23 no.1
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• pp.1-19
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• 2013

The market for commercial open source software (OSS) has been rapidly growing with the proliferation of OSS. One way to commercialize OSS is the support model, which has been adopted by leading OSS firms such as Red Hat and JBoss. Despite the growing interest in OSS commercialization, little research has provided OSS support providers with a pricing guideline. In this paper, we examine the optimal pricing strategies for OSS support providers. Our benchmark is a monopoly case in which we investigate a startup software vendor's incentive to choose the OSS support regime over the proprietary one. Then we extend the model to a duopoly case in which OSS under the support regime competes against proprietary software. We characterize the conditions under which the OSS support model is viable under competition. We believe that our results offer insights to the OSS vendors who consider commercializing their OSS with a support model.

• The Journal of the Korea Contents Association
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• v.16 no.7
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• pp.146-153
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• 2016

This work studies the equilibrium behavior of customers and optimal pricing strategies of the sever in a continuous-time M/M/1 queueing system. In this work, we consider two pricing models. The first one is called the ex-ante payment scheme where the server charges a flat price for all services, and the second one is called the ex-post payment scheme where the server charges a price that is proportional to the time a customer spends in the system. In each pricing model, the departing customer receives the reward that is inversely proportional to his/her sojourn time. The server should make the optimal pricing decisions in order to maximize its expected profit per unit time in each payment scheme. This work also investigates customer's equilibrium joining or balking behaviors under server's optimal pricing strategies. Numerical experiments are conducted to help the server best select one between two pricing models.

• Journal of Korean Institute of Industrial Engineers
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• v.28 no.3
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• pp.291-301
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• 2002

In this paper, we introduce a mathematical model to analyze pricing/quality and service mix strategies for Internet Portal site. This model includes utilities and costs of each participants, i.e., user, third party provider, and portal sites. Especially, we consider portal sites that initiate their businesses by providing free services like free e-mail service or search service and providing several charged services. As the results, we can find that Portal sites should make the target of customers and focus them to maximize their profit. Portal sites should pay their marketing effort not for all customers but pertinent portions of customers. And Portal sites should make more efforts to efficiently develop and provision their services.

• Korean Management Science Review
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• v.31 no.1
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• pp.27-40
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• 2014

Tour products have been recognized as a perishable asset. For tour operation companies (TOCs), improving profitability is a core decision problem for their business. Since package tour products, typical products of TOCs, are perishable after the tour was departed, TOCs have been tried to increase their sales before the departure date with various marketing strategies including price discounts. The pricing problem for perishable assets have been studied in Revenue Management for a long time. However, it is hard to find a research on pricing decisions for tour products. In this paper, we focus on a pricing problem for tour products. In particular, we will consider the pricing scheme with customer preference values on purchasing conditions. With conjoint analysis, we can use the part-worth value as a preference value for each level of purchasing conditions. To construct various discount prices, we use an enumeration method and suggest a mathematical optimization model. With experimental analysis for a sample tour package, we will show that our pricing process is very helpful for designing customer-oriented pricing decision.