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Cause-Related Product Pricing with Regular Product Reference

Author

Listed:
  • 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)

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.

Suggested Citation

  • Xin Li & Minghui Xu & Dongsheng Yang, 2021. "Cause-Related Product Pricing with Regular Product Reference," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 38(04), pages 1-21, August.
    • Handle: RePEc:wsi:apjorx:v:38:y:2021:i:04:n:s0217595921500020
    DOI: 10.1142/S0217595921500020
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    Cited by:

    1. Huang, Guoxuan & Zheng, Benrong & Zou, Bipan & Cheng, T.C.E., 2022. "Strategic role of charitable donation in supply chain coordination with consumer prosocial preference," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).

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