Abstract: The rapid upgrading of innovative products asks that pricing strategies for next-generation innovative products must take its impact of previous generation products into consideration. Based on multi-generation innovative product Bass model, known as GNB model, several key factors observed from practice e.g., production capaticy and consumer behavior, are introduced into the model. Therefore, the extended model offers a better representation of real-world decision problems. Furthermore, dynamic pricing strategies are explored to maximize the net profit of multi-generation products. Seeing that traditional mathematical modeling approaches struggle to model and solve this complicated pricing problem, system dynamics model of the problem is employed instead. Then, following simulation based optimization methodology, this challenging problem is solved by simulation data. The results not only validate the pricing practices of two smartphone giants- two innovative producers, but also provide management insights for dynamic pricing strategies from perspectives of production capacity, time to discount products, etc. Moreover, the positive impact of word-of-mouth spreading on sales and profit of multi-generation products are quantified from simulation results. Additionally, sales efforts for consumer behavior in word-of-mouth marketing campaigns are analyzed.