Value-informed pricing for virtual digital products: Evidence from Chinese MMORPG industry

Abstract

Value-informed pricing strategy, which focuses on determining the price level of products based on consumer value perception, is especially suitable to be applied in digital products rather than industrial ones. By carrying out 65 in-depth interviews with people involved in the Chinese Massively Multiplayer Online Role-Playing Game (MMORPG) industry, this article explores the process through which a value-informed pricing strategy is applied to determine the price level of virtual in-game accessories—exploring pricing preference through interacting with game players, swaying pricing alternatives through managing the competitive environment, and manipulating value perception through shaping the virtual marketplace. Furthermore, this article constructs a theoretical framework of value-informed pricing, including the above process, and deciphers the linkage mechanism between different segments. The findings not only enrich the theory of value-informed pricing under the application context of virtual digital products but also have implications for the practitioners in the MMORPG industry.

Value co-creation and new service performance: mediated by value-informed pricing

“…Prices may therefore be set as a function of value. According to scholars, understanding customer value perception in value-informed pricing practices enable firms to determine the price level of new services/products (Ingenbleek et al, 2010;Ren et al, 2020).…”

“…Companies usually gather customer value information from market research and manager's customer/market related knowledge (Ingenbleek et al, 2010;Rahman et al, 2015;Ren et al, 2020). However, the other emerging source of gathering the information is via direct interaction with the customers which can be posited under B2B relationships.…”

“…One of the capabilities that can be generated via the direct interaction with the business customer is by understanding customer value-informed pricing practices that are implemented by the firms. Scholars in the marketing field believe that value-informed pricing is an excellent means of achieving profitable pricing (Hinterhuber, 2004;Liozu, 2017;Nagle et al, 2010) and empirically proved that valueinformed pricing links better to new product performance and firm performance (Ingenbleek et al, 2013;Liozu and Hinterhuber, 2013;Ren et al, 2020). Many authors suggest that value-informed pricing depends on several factors such as relationships, market research, internal information sources, cognitive biases and market orientation (Hinterhuber, 2008;Ingenbleek, 2007;Ingenbleek et al, 2010;Rahman et al, 2015).…”

Mediated Model of Digitalized Corporations in the Context of Price Fairness and Customer Perceived Quality

“…There is a high obligation to formulate a pricing approach in the service sector, keeping in sight the perception of digitalized corporations, suggesting an energetic affiliation between pricing and satisfaction (Kaura et al, 2014). In the case of a digital marketplace, prices form the basis of digitalized corporation's expectations and are elementary because there is high competition among online portals, and price serves as a convincing aspect to gain customer satisfaction (Ren et al, 2018). Based on the above discussion, the following hypothesis is generated: H4: There is a significant relationship between price fairness and customer satisfaction.…”

“…Previous research interpreted that in an online environment, customers face numerous choices; thus, online portals following fair price technique as a counter-strategy against superior quality competitor services are often successful in creating positive perception (Ren et al, 2018;Chou, 2019). Both digitalized corporations and online portals appraise that the resources put in for offering the service are examined by the customers, emphasizing being equal on price and other facilities (Busalim et al, 2019).…”