Hassan Shavandi - Industrial Engineering Deot., Sharif University of Technology, tehran, iran
Hossein Abouee-Mehrizi - Joseph L. Rothman School of Management, University of Toronto

This article presents a new model for pricing a new product considering skimming pricing strategy in the presence of the competition. The problem is selecting marketplaces over marketplaces and deciding on a skimming price as well as an economy price for each marketplace in order to maximize the total profit. The derived model is a mixed integer non-linear programming model and we introduce an algorithm based on Taylor expansion to solve the model. After transforming the model, we solve iteratively a quadratic programming model for each marketplace to determine the best prices. An illustrative sample problem is presented and solved by proposed solution method. Finally some future research is proposed.

Spatial pricing; Skimming pricing; quadratic programming; mixed integer non- linear programming