| Title | Pricing and quality decisions of new energy vehicles considering consumption power under the differentiated market positioning mechanism |
| Author | ZHANG Cuihua; LI Zhitang; LYU Ruxia; MA Shijie |
| Abstract | Given the unique characteristics of the target consumer groups within the new energy vehicle market, it is significant to examine the pricing and quality decisions of new energy vehicles, taking into account consumer consumption power under the differentiated market positioning mechanism. This paper focuses on the market for new energy vehicles and identifies two distinct consumer groups: core consumers and follow-up consumers. It establishes a model that encompasses different market positioning mechanisms within both the direct sales and wholesale modes and subsequently analyses the equilibrium outcomes. Our research is primarily grounded in game theory, where we construct a game model that takes into account various factors, such as pricing, quality, consumer consumption power, wholesale prices, and agency fees for new energy vehicles, under different sales models and differentiated market positioning mechanisms. The objective is to investigate the decision-making process for the pricing and quality of new energy vehicles. In the first section of our study, we primarily concentrate on market positioning for core consumers and delve into the decision-making processes for pricing and quality of new energy vehicles within both the direct sales and wholesale models. The second section of our research explores pricing and quality decision-making challenges for new energy vehicles within the direct sales and wholesale models when the market targets both core and follow-up consumers. Ultimately, by employing subgame analysis and numerical examples, we derive corresponding market positioning and sales model strategies.Our research shows that 1) under two different market positioning strategies and two sales models, the optimal product quality, price, and revenue for each stakeholder decrease as the price sensitivity coefficient increases. Additionally, the gap between them gradually narrows. 2) When the market is positioned as the core consumer, the optimal product quality, price, market demand and revenue of each member will increase with increase with an increase in the proportion of core consumers. In addition, the optimal product quality, demand, income of each member and total profit of the supply chain are all higher than the equilibrium results obtained in the wholesale mode. 3) When the market is positioned as core consumers and follow-on consumers, the optimal product quality and price under the two sales models are independent of the proportion of core consumers because the pricing decision here primarily concerns the consumption power of follow-on consumers. An increase in consumption power leads to an increase in the product quality, price, market demand and revenue of each member. 4) When the market is positioned as the core consumer or the following consumer, the demand of the core consumer and the revenue of each member increase with an increase in the proportion of the core consumers. The demand for follow-on consumers and the benefits of each member decrease with an increase in the proportion of core consumers. The proportion of core consumers will determine when the follow-on consumers exit the market. Before the follow-on consumers exit the market, the total demand and the income of each member remain relatively stable. After the follow-on consumers exit the market, total demand is equal to core demand. In addition, the market demand of the direct selling model is greater than that of the wholesale model, but the total profit of the supply chain of the wholesale model is higher. 5) Under the two sales models, when the market is positioned for core consumers, the retail price increases as the proportion of core consumers rises and is significantly higher than when the market is positioned for both core and follow-up consumers. However, total market demand is slightly lower. When the proportion of core consumers is low and the market is positioned for both core and follow-up consumers, it is more profitable for the supplier. Conversely, when the market is positioned for core consumers, it is more advantageous. In summary, this study, based on game theory, constructs pricing and quality decision models for new energy vehicles under different market positioning and sales models, highlighting the crucial influence of consumer purchasing power on product strategies. The research reveals that as the proportion of core consumers increases, product quality, pricing, market demand, and revenue all exhibit upward trends. Variations exist between different sales models, with direct sales models demonstrating higher market demand, while wholesale models yield greater supply chain returns. This research provides valuable managerial insights into differentiated market positioning and sales strategies for the new energy vehicle market. |
| Keywords | New energy vehicles; Market positioning; Core consumer; Follow-on consumers; Consumption power |
| Issue | Vol. 39, No. 5, 2025 |
Title
Pricing and quality decisions of new energy vehicles considering consumption power under the differentiated market positioning mechanism
Author
ZHANG Cuihua; LI Zhitang; LYU Ruxia; MA Shijie
Abstract
Given the unique characteristics of the target consumer groups within the new energy vehicle market, it is significant to examine the pricing and quality decisions of new energy vehicles, taking into account consumer consumption power under the differentiated market positioning mechanism. This paper focuses on the market for new energy vehicles and identifies two distinct consumer groups: core consumers and follow-up consumers. It establishes a model that encompasses different market positioning mechanisms within both the direct sales and wholesale modes and subsequently analyses the equilibrium outcomes. Our research is primarily grounded in game theory, where we construct a game model that takes into account various factors, such as pricing, quality, consumer consumption power, wholesale prices, and agency fees for new energy vehicles, under different sales models and differentiated market positioning mechanisms. The objective is to investigate the decision-making process for the pricing and quality of new energy vehicles. In the first section of our study, we primarily concentrate on market positioning for core consumers and delve into the decision-making processes for pricing and quality of new energy vehicles within both the direct sales and wholesale models. The second section of our research explores pricing and quality decision-making challenges for new energy vehicles within the direct sales and wholesale models when the market targets both core and follow-up consumers. Ultimately, by employing subgame analysis and numerical examples, we derive corresponding market positioning and sales model strategies.Our research shows that 1) under two different market positioning strategies and two sales models, the optimal product quality, price, and revenue for each stakeholder decrease as the price sensitivity coefficient increases. Additionally, the gap between them gradually narrows. 2) When the market is positioned as the core consumer, the optimal product quality, price, market demand and revenue of each member will increase with increase with an increase in the proportion of core consumers. In addition, the optimal product quality, demand, income of each member and total profit of the supply chain are all higher than the equilibrium results obtained in the wholesale mode. 3) When the market is positioned as core consumers and follow-on consumers, the optimal product quality and price under the two sales models are independent of the proportion of core consumers because the pricing decision here primarily concerns the consumption power of follow-on consumers. An increase in consumption power leads to an increase in the product quality, price, market demand and revenue of each member. 4) When the market is positioned as the core consumer or the following consumer, the demand of the core consumer and the revenue of each member increase with an increase in the proportion of the core consumers. The demand for follow-on consumers and the benefits of each member decrease with an increase in the proportion of core consumers. The proportion of core consumers will determine when the follow-on consumers exit the market. Before the follow-on consumers exit the market, the total demand and the income of each member remain relatively stable. After the follow-on consumers exit the market, total demand is equal to core demand. In addition, the market demand of the direct selling model is greater than that of the wholesale model, but the total profit of the supply chain of the wholesale model is higher. 5) Under the two sales models, when the market is positioned for core consumers, the retail price increases as the proportion of core consumers rises and is significantly higher than when the market is positioned for both core and follow-up consumers. However, total market demand is slightly lower. When the proportion of core consumers is low and the market is positioned for both core and follow-up consumers, it is more profitable for the supplier. Conversely, when the market is positioned for core consumers, it is more advantageous. In summary, this study, based on game theory, constructs pricing and quality decision models for new energy vehicles under different market positioning and sales models, highlighting the crucial influence of consumer purchasing power on product strategies. The research reveals that as the proportion of core consumers increases, product quality, pricing, market demand, and revenue all exhibit upward trends. Variations exist between different sales models, with direct sales models demonstrating higher market demand, while wholesale models yield greater supply chain returns. This research provides valuable managerial insights into differentiated market positioning and sales strategies for the new energy vehicle market.
Keywords
New energy vehicles; Market positioning; Core consumer; Follow-on consumers; Consumption power
Issue
Vol. 39, No. 5, 2025
References