Decision Analysis On Online Channel Based On Consumer Utility

With the rapid development of Internet and Information Technology,shopping online has become a life style which is favoured by consumers more and more.Increasing number of firms are building online channel for themselves or taking part into a famous online selling platform in order to improve the force and demand of their product or service,for example,Amazon,because they are experiencing the huge improvement space for online sale and they want to cater the consumer's demand which is changing fast.Based on these,researchers who are working with related areas have paied much attention to online selling and make a number of studies.However,most of these studies about online selling are focused on dual channel which is the combination of online channel and traditional offline channel.It has some difference with the mere study of online channel.Comparing to the mere study of traditional offline and the combination study of online channel and traditional offline channel,the mere study of online channel gives prominence to horizontal competition and cross competition and cooperation.Thus,it will make research become necessarily and complicated.Starting with the Consumer's Utility Theory and combining with Game Theory,Optimal Theory and Numerical Analysis,this dissertation studied the decision problems of online platform and franchiser under online selling circumstance which has some kind of competition characteristics.The main and important contents of study are given by:The decision problems about price and service were analyzed under a scenario which the products possessed by online retailer and franchiser are substituted each other in some degree.Firstly,the decision problem which there is only price competition between two participants' substituted products was analyzed in online selling circumstance.Subsequently,a typical characteristic which the online retailer provided indistinctive service to two substituted products and franchiser provide franchise fee to online retailer was introduced into the former problem to study the decisions of prices and service.There is comparison between the former situation which is compete with price only and the later situation which is compete with price and service.The results show that the substitute degree has an important impact on the optimal decisions.The introduction of indistinctive service will instructive to the online retailer but maybe harmful to the franchiser,only in the case that the substituted degree of two products is small and consumers are attach importance to service the franchiser will benefit from indistinctive service.In addition,the whole online channel under centralized decision scenarios will obtain more profit than decentralized decision scenarios if the substituted degree is samll and large when the indistinctive service is introduced into the model.This dissertation uses the amount of participants as the benchmark of the competition intensity in online channel.Furthermore,it studied the decisions problem under different competition intensities.The results show that pieces and service decision of two participants in online channel will decrease with the increase of competition intensity.The profit will decrease with the competition intensity,but the decisions of two participants under moderate intensity have little difference with the decisions under high intensity in most of the cases.Although the service level of the whole market will decrease with the competition intensity,but the whole demand of the channel will increase with the competition intensity.In addition,the online channel will obtain maximal profit under low competition intensity if there is only the online retailer's product de sold when the competition intensity is low.But,the online channel will obtain maximal profit under moderate competition intensity if there is only franchiser's product be sold when the competition intensity is low and consumers have a comparative low preference on franchiser's producs when the competition intensity is moderate.Considering synthetically the impacts of participants' power structure and consumers' preference on decisions of the online channel.This dissertation introduced the difference of consumers' preference on the online retailer and franchiser under different participants' power structures and used the Game Theory to analyze the decision problem with power structures' and consumers' influence.Results show that no matter what the participants' power structure and the consumers' preference are,the optimal decisions of two participants will increase with the consumers' preference on service.The online retailer' optimal decisions will not affected by any other factors if the online retailer will not dominates the online channel and consumers are prefer to the products of franchiser,but the franchiser will always obtain her optimal decisions except she is the leader of the whole online channel.Comparing the online retailer's and franchiser's profoits under different scenarios,the results show that the online retailer's profit will increase with her power in the online channel and this increasing tendency will not be influenced by the consumers' preferences difference to the online retailer's and franchiser's products.However,the profit of franchiser will increases with her power in online channel or not will change with with the consumers' preferences difference to the online retailer's and franchiser's products.