A Cognition-Based Approach to Analyze Customer Segment's Reservation Price

Knowledge of customer reservation price aids manager in implementing many marketing strategies such as dynamic pricing, bundling sales, and target promotion etc. This paper investigated how cognition factors affected different customer segment's reservation price distribution. Utility of information products usually can not be quantitatively measured like that of physical products, and contrarily, it can only be fuzzy perceived by customer's cognition. Hence, a cognition-based approach is proposed in this paper to reveal how a customer values information products. Two techniques are employed in this approach: (1) fuzzy cognitive map is used to represent the customer's cognitive process for a target information product; (2) the structural equation modeling (SEM) method is used to obtain parameters in cognitive map by questionnaires analyzing.