Price forecasting model of the FPD market with existing technological variance - Case: Global FPD TV market

Beginning the 21st century, the FPD (Flat Panel Display) market has been growing massively. It is difficult for the market to establish pricing strategies according to the development of technology and the change of market due to technological variances and diverse sizes of products such as the LCD, PDP, Braun tube, and projection television (TV) in the FPD market. The preexisting methods for pricing, used to forecast the future price of products, take into consideration the prime cost, value of brand, and functions of products applied by the same technology. In the market, however, the rapidly changing technology becomes an obstacle to the establishment of pricing strategies considering market competition. In order to overcome the preceding limitations, we propose a new method for forecasting the appropriate gap between the prices of products based on different technology and size. The purpose of this PBS (Pricing Based on Simulation) method is to contribute to setting up an effective pricing strategy in the FPD market. This method consists of surveys, estimated price response function, analysis of the appropriate gap between product prices, prediction of future market competition, and establishment of strategies. By implying the PBS method to the global FPD market in year 2005, we deduced the price response function and the appropriate gap between product prices for the future. According to the real FPD market from 2005 to 2006, the statistical marketing data shows significant similarity in movement to the forecasting result by the method. Therefore, the PBS method can be utilized effectively when products using newly developed technology is introduced to the market in the future. 2010 Elsevier Ltd. All rights reserved.