Channel Operation And Pricing Decisions Considering Consumer Perceived Uncertainty

As the world has entered an era of mass consumption with a market-oriented econ-omy,the consumer is central to the market competition and is the strategic resource that the retail and service industry pursue.Consequently,consumer demand becomes the de-termining factor affecting the channel's decision,revenue,and profit.Thus,the key to attract customer demand and realize performance improvement for the company is to en-hance the understanding of consumer behavior.This dissertation focuses on consumer perception of uncertainty and expounds the nature,antecedents and the embodiment of consumer perceived uncertainty in product quality,product fit,product availability and service level in three-channel operations scenarios,including the single-channel re-tailing as well as consumer return,Omnichannel retailing and online-to-offline service platform operations,and examines the effect of the consumer perceived uncertainty on the consumer choice mode and the channel operations and pricing decisions.Recalling the development of the channel operations modes from the perspective of consumer perceived uncertainty,it can be easily found that,the primary function of a return option for an online retailer is to alleviate the demand suppression caused by consumer perception of the product uncertainty;however,when the tremendous return cost becomes the impediment for the company,some online retailers have responded to the information challenge by creating the offline channels where the consumer can inspect the product.Thus,the concept of the omnichannel retailing wipes through the retailing world;followed by the seamless purchase experience under the multichannel integration,the sophisticated consumer tends to require the service industry to comply with the same standards,then the Online-to-Offline platforms are emerging.According to the three different channel operations scenarios,the research can be classified into three studies to explore consumer perception of the uncertainty in product or service.For the retailer selling through a single channel allowing consumer return,the study examines the effect of consumer perceived product uncertainty on the return time le-niency and product price adjustment.In this study,consumer perceived uncertainty is defined as the consumer perception of the uncertainty in product quality and fit before purchasing the product.and this uncertainty will determine consumer post-purchase re-turn decisions.First,the study empirically verifies that the consumer perceived product uncertainty is related to consumer post-purchase experience time,i.e.,consumer needs longer time to make return decision for the product with higher uncertainty.Then.based on the hypothesis,the study incorporates the perceived product uncertainty into consumer valuation about the product before purchasing,analyzes the consumer ex-pected utility,and finds that:when the retailer extends the return time window,the maximum willingness-to-pay of the customer will surge,and the consumer is willing to pay a higher price for the product with higher uncertainty.Finally,the study empiri-cally testifies the findings by econometric analysis.Thus,the retailer should adjust the return time window and product price contingent on the consumer perceived product uncertainty to extract more consumer surplus and increase revenue.For the Omnichannel retailer selling through the online and offline seamlessly,the study proposes that the consumer disappointment aversion behavior triggered by the consumer perceived product uncertainty will influence the consumer channel choice and determine the threshold under which the retailer makes differential pricing deci-sions for the two channels.The consumer may become sensitive to the bias between the actual outcome and the ex-ante expectation when his or her perception of uncer-tainty arise,then consumer may feel disappointed about the bias.Once the consumer is aware to avoid the occurrence of the disappointment emotion,he or she may inhibit the intention to take action,showing disappointment aversion behavior.Thus,the study considers the consumer disappointment aversion behavior caused by the consumer per-ceived uncertainty.This behavior performs differently in the online and offline chan-nel:in the online channel,because consumer cannot touch and feel the product,the consumer perceive uncertainty in product quality and product fit may raise,prompting consumer low-value disappointment aversion;in the offline channel,because the con-sumer cannot be informed of whether the product is on-stock before visiting the store,the consumer perceive uncertainty in product availability may occur,causing consumer low-value disappointment aversion.The study incorporates consumer disappointment aversion behavior into the consumer utility and examines the effect of this behavior on Omnichannel retailer pricing decisions by game modeling.The study finds that consumer disappointment aversion behavior will restrain the demand and decrease the profit.However,if the Omnichannel retailer implements the physical showroom mech-anism,the mechanism will not only mitigate the negative effect driven by the consumer perceived uncertainty but also transform the disappointment aversion behavior into a favorable position.For the online-to-offline platform providing on-demand service,the study con-cerns consumer perceived uncertainty in the service level,which will affect the con-sumer choice between the two different service classes with high or low levels of ser-vice quality and then affect the firm pricing decision and capacity scheduling.As the 020 on-demand service platform may convene the self-scheduled service providers to offer various levels of service,the consumer may perceive higher uncertainty in service level.The study incorporates the consumer perceived uncertainty in service level into the consumer utility and explores the platform's optimal service price premium and capacity allocation decisions by game modeling.The research also observes that the platform may offer two kinds of service hailing modes:the one is called separate ser-vice hailing model in which the customer chooses the service class initially;the another is shared service hailing mode in which the customer hails the two class of services simultaneously,and the platform will allocate one service class to the customer.The study reminds the profit-maximization seeking platform of the necessity to consider the stage of corporate life,the preposition perceived by the consumer,and the distribution of the service uncertainty perception.This dissertation attempts to strengthen the comprehension of the manifestation and cause of the consumer perceived uncertainty in product or service and relate the theoretical analysis to the practical operations scenarios of the different channels in different circumstances and stages,discuss how the consumer performs under the per-ception of uncertainty.Based on the behavior characteristics,the study employs the consumer expected utility theory to capture consumer behavior,integrating with game modeling or econometric analysis,explores the impact of consumer perceived uncer-tainty in product or service on channel pricing and operation decisions.This dissertation reveals practical and theoretical significance for future research related to consumer per-ceived uncertainty and channel optimization.