Abstract: The primary issue faced in product update process is how to design a new product quality level. Although the high quality level can expand user markets, its high price factor will reduce customers' willingness to buy, reduce sales, and compete with low-priced old products. Different quality levels of product update correspond to different profits. Excessive quality levels of products can lead to lower profits. The studied problem in this paper is how to determine the optimal value of the quality level in the stage of product update in order to maximize the sales profit.

Key words: product update; quality level; customer quality preference; quality utility