Abstract: The entry timing decision and pricing strategies have become increasingly important for imitative enterprises due to competitive market environment. To address these problems, a system dynamics modeling approach was proposed. Using this method, demand and profit of the imitative enterprise under the duopoly market were calculated by simulations of the system dynamics model. Two objectives for the imitative enterprise were discussed. One is to maximize the sales, and the other is to maximize the profit. In the model, two kinds of consumer behaviors were considered: the hesitant behavior before purchasing the product, and the expectation for future price’s discount. The simulation results revealed that the optimal operation strategies for those targeting market share are to discount the product once entering the market. By contrast, if the imitative enterprises pursue maximizing their profits, the optimal strategies are not to discount the product. Moreover, if price discounted is a common knowledge, the imitative enterprises will benefit from delay price discount.

Key words: imitative enterprise, market entry timing, dynamic pricing, Bass model, system dynamics simulation