Analysing a segmentation pricing strategy for ERP systems under diffusion patterns

Abstract

In this paper, we evaluate the options of developing a price discrimination policy for Enterprise Resource Planning (ERP) systems in a business sector governed by a diffusion pattern influenced by the network position of each firm. Based on a real data from the automotive industry, the proposed strategy is operationalized through discounts and optimized through a simulation-based model coupled with design of experiment and response surface techniques. Our results suggest that a segmentation pricing strategy is likely to increase total revenues in network with low initial adoption rates and that price discounts should be adapted according to adoption rates in order to maximize total revenues. © 2010 Springer-Verlag.