Abstract: With the rapid development of scientific technology, manufacturers are motivated to launch innovative products frequently to seize market share. Thus, product pricing and rollover strategies have become an important factor in the success of production. In this paper, a duopoly firms three stages model of the optimal pricing and product rollover strategy is constructed, combined with the utility function and the game analysis method under the perspective of technical innovation in homogeneous and heterogeneous product market.The display solutions on the timing of new product coming into market and old product exiting market are found out. Also, the effect of product technology innovation level, consumer innovation knowledge on optimal pricing and product rollover strategy through simulation is investigated. The research indicates that levels of product technology innovation and consumer innovation knowledge have important influence on the pricing and product rollover strategy of the manufacturers. In the market of homogeneous products, the higher the potential demand of the market is, the higher the initial price of the product will be. When the manufacturers face the competition of internal and external products and the market potential demand is small, the price of two generation products is barely different. When the market potential demand is large, the new product pricing is determined by the level of technological innovation. When the technological innovation level of the manufacturer is at disadvantage, the greater the gap between the two manufacturers'technological innovation level is, the earlier the inferior manufacturers should exit the market.

Key words: technological innovation, optimal pricing, product rollover strategy, consumer innovation knowledge