A membership pricing policy to facilitate service scale-expansion

Hui-Chih Hung, Chung Yu Chung, Muh-Cherng Wu*, Wan Ling Shen


研究成果: Article同行評審

2 引文 斯高帕斯(Scopus)


This paper proposes a multi-year membership pricing policy for a service business like a gym chain. In the pricing policy, the equivalent membership price per year is relatively low to attract customers, and the multi-year membership fees must be prepaid in full. The prepaid cash provides resources for scale-expansion by opening new stores. We develop a nonlinear mixed integer programming model to formulate the pricing decisions. Numerical experiments reveal that the multi-year membership pricing policy, from a long-term perspective, is substantially better than the business-as-usual pricing policy (1-year membership) in cash balance, profit, and market share. Yet, the performances of the two pricing policies do not differ much from a short-term perspective. These findings indicate that the multi-year pricing policy may be a good strategy, because it initially attracts less attention of competitors; suddenly it emerges and substantially outperforms its competitors in cash balance, profit, and market share.

頁(從 - 到)167-189
期刊Service Industries Journal
出版狀態Published - 12 3月 2017


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