Research On Dynamic Pricing Of An Online Retailing Supply Chain Based On Consumer Behavior

The rapid development of internet and e-commerce has made online retailing gradually become the mainstream sales model of products.In online shopping environment,the relationship between supply and demand of products or services has changed from enterprise-led to consumer-led.Through the internet,consumers can easily search various product information such as online reviews,historical sales prices,return policies,sales channels,etc.,making consumer purchasing behavior more diversified.Meanwhile,consumer behavior directly leads to changes in product demand,which has a huge impact on the pricing strategy and revenue of the online retail industry.Therefore,understanding consumer behavior and characterizing its response to marketing strategies is conducive to improve the profitability of online retail companies.According to the background,this paper starts from the analysis of the relationship between consumer behavior,business operation decision-making and marketing strategy,and uses dynamic programming,expected utility and game theory to expand from myopic consumers to strategic consumers,and from single channel to dual channels.The chain is extended to two perspectives of the dual-channel supply chain,and the issues of operation decision-making,supply chain coordination and revenue management in the online retail environment are studied.The main results and conclusions are presented below:First,under myopic consumers,dynamic pricing and coordination of online retail supply chains are studied from the perspectives of online reviews and reference price effects.In the framework of a two-level supply chain consisted of a manufacturer and an online retailer,this paper first constructs a two-period dynamic pricing model under centralized decision-making and decentralized decision-making,and finds that when the reference price effect is greater than the online review effect,the online retailer should follow lower retail prices over time;otherwise,it should set lower retail prices first to increase product sales and enhance online review effects.Secondly,based on the dynamic revenue sharing contract,the research shows that when the two-period revenue sharing ratio is in a certain range,the contract can achieve a win-win situation for both the manufacturer and the retailer and perfect coordination of the entire supply chain.Finally,the study finds that online reviews can be beneficial to the manufacturer’s and retailer’s profits,and whether the reference price increases their profits depends on the interaction between the online review effect factor and the reference price effect factor.Second,under myopic consumers,dynamic pricing and coordination of online retail dual-channel supply chains are studied from the perspective of online reviews and reference price effects.Under the framework of the dual-channel supply chain composed of a direct channel and an online retail channel,this paper first distinguishes the impact of online reviews from two channels on consumers’ purchase decisions in a direct channel and an online retail channel.The research shows that when the effect of online reviews on the online retail channel is weak,the effect of online reviews on the direct channel is weak,or the reference price effect is strong,the manufacturer and retailer adopt skimming pricing strategy;When the effect of online reviews is strong or reference price effect is weak,the manufacturer and the retailer adopt penetration pricing strategy.Second,dynamic revenue sharing contract can ensure a win-win situation for both the manufacturer and the retailer,and the supply chain can coordination perfectly.Under the contract,the manufacturer may charge the retailer a wholesale price below production cost,and may even subsidize the retailer per unit of product.Third,based on the purchase regret behavior of strategic consumers,the twoperiod return policy of an online retailer is studied.By constructing a dynamic pricing model under the conditions of no returns allowed in two periods,returns allowed only in the normal sales period,and returns allowed in both periods,the optimal pricing decision and profit of each model are analyzed respectively to obtain the optimal twoperiod return policy.First,the research shows that return policy can alleviate consumer strategic behavior,and allowing return policy only in the normal sales period can even eliminate consumer strategic behavior.Second,the impact of consumer strategic behavior on the optimal return policy depends on the combined effects of consumer satisfaction and the net residual value of returned products.In the end,ignoring consumer’s regret behavior will result in profit or loss for the retailer.On this issue,purchase regret behavior and waiting regret behavior play an important role.Specifically,when the purchase regret behavior dominates,the retailer’s profit loss due to consumer’s regret behavior is the smallest under the return policy allowed only in the normal sales period;when the waiting regret behavior dominates,the retailer will get more profit due to the consumer’s regret behavior,and the retailer will make the most profit under the policy of allowing returns in both periods.Fourth,based on strategic consumers,this work research the markdown pricing strategies of a manufacturer and a retailer in a dual-channel supply chain environment.Due to price promotions,consumers will form strategic waiting behaviors.This behavior,in turn,negatively affects the choice of markdown pricing strategies of the manufacturer and the retailer.Therefore,based on the two-period dynamic Stackelberg game theory,this study discusses the dynamic pricing strategies under four situations of markdown pricing strategies,that is,no markdown in both channel,markdown in the direct channel only,markdown in the retail channel only,markdown in both channels.The study found that,for the manufacturer,the case with markdowns in both channels can maximize his profits.For retailers,only when consumers’ acceptance of the direct sales channel is high enough,the retailer will make the most profit under the case with markdowns in both channels;otherwise,it will make the most profits under the case with markdown only in the retail channel.In addition,the research also shows that consumer’s strategic behavior has a positive effect on the retailer’s profit,but a negative effect on the manufacturer’s profit.