| Digital technology has resulted in the continuous improvement of new business models and provided opportunities for e-commerce platforms to grow.However,the lack of consumer knowledge of real product information during online shopping stymies further e-commerce model optimization.Online reviews,as an effective way for consumers to learn more about products,have a direct influence on consumer purchase decisions and seller operation decisions.Therefore,in order to improve product competitiveness in the context of growing market competition,on the one hand,this study considers the impact of online reviews on consumers’ product quality valuation to assist companies in rationalizing operational decisions such as product quality improvement and pricing;while on the other hand,it considers the increasing number of companies adopting reviews optimization measures and investigates companies’ decisions under reviews optimization strategies in terms of the number and content of online reviews.The findings of this study serve as a theoretical foundation and reference point for the exploration of operational strategies for online retailers and e-commerce platforms.The study focused on the following four areas:(1)We first investigated a two-period pricing strategy for competing sellers considering product improvement and consumer segmentation based on online product reviews.Consider the change in the expected utility of heterogeneous consumers from different products in the second period after being influenced by the first period of online reviews.We construct a two-period decision model for sellers in scenarios where a single seller improves the product and both sellers improve the product.Combined with the numerical analysis,we found that increased consumer attention to positive reviews increases market competition,and that the impact of online reviews on product improvement and pricing does not fully offset the advantages of a larger initial informed consumer.Only if the quality of its own product is significantly greater than the quality of the competing product,will the seller invest in a higher level of quality improvement in the scenario where both parties improve the product than in the scenario where it improves the product alone.It is necessary for the seller to control the quality improvement cost coefficient of production in order to benefit from improving product quality in the second period ahead.It also provides corresponding management suggestions for sellers’ online reviews management and product improvement strategies.(2)Then,the interactive effects of sellers’ marketing strategies and online reviews are further considered.Based on the first part of the study,we add consideration of new consumer offers implemented by sellers to attract consumers from competing sellers.Solve for the optimal decision and profit in the scenarios where neither seller implements price discounts,where only one seller implements price discounts,and where both sellers implement price discounts.Combining the numerical analysis,we find that the proportion of informed consumers of the product determines the level of quality improvement and how the demand for the product in the second period changes in response to positive consumer reviews of the concern.Combining the numerical analysis,we found that the proportion of product-informed consumers determines the level of quality improvement and how product demand in the second period changes with consumer attention to positive reviews.When a seller implements a price promotion for a new consumer alone,the price paid by the consumer who continues to purchase its products increases compared to the scenario where the price promotion is not implemented for any new consumer.When both sellers implement price promotions for new consumers,the product improvement efficiency of the seller who improves the product determines whether it raises or lowers prices with its competitor.The impact of sellers’ price offers to new consumers on consumer surplus is also considered with a view to informing promotions on e-commerce platforms and sellers who plan to offer price promotions to new consumers.(3)Based on the analysis of online reviews on sellers’ decisions and profits,we study the effectiveness of sellers’ reviews optimization behavior,and investigate the two-period pricing problem of two competing products based on online reviews and sellers’ negative review response strategies.A two-period pricing model for competitive sellers is constructed for scenarios where none of the sellers respond to negative reviews,a single seller responds to negative reviews,and both sellers respond to negative reviews.By comparing the decision results and numerical analysis,it was found that the level of seller response effort was higher in the scenario of a single seller responding to a negative review compared to the scenario of both sellers responding to a negative review when the product quality was lower than that of the competing product.When a single seller responds to negative reviews or both sellers respond to negative reviews,the pricing of the product in the first period depends on the quality difference with the competing product,and the pricing in the second period is also influenced by the consumer’s attention to the negative reviews.The difference in quality between the seller’s own products and those of the competition is controlled to the extent that negative review responses can improve his total revenue.It also suggests that sellers of high-quality products need to invest in negative response efforts and should help platforms control the cost of negative responses.(4)Finally,the study is extended to the context of allowing defect-free product returns to further analyze the effectiveness of seller reviews optimization strategies in the presence of product returns.Considering the different behavioral decisions of consumers after receiving the product,the probability of purchase,the probability of positive reviews(negative reviews,no reviews)and the probability of return of the product in the two periods are represented analytically.We use the newsboy model to construct the seller’s revenue model under different reviews optimization strategies to solve the seller’s optimal pricing and inventory in the two periods.Combined with the numerical analysis to study the impact of review optimization strategy on seller’s decision and revenue,we find that the positive review invitation strategy increases both the purchase and return probability of products in the second period,and when the positive review cashback amount is controlled within a certain range,the purchase and return probability of products in the second period under the positive review cashback strategy increase.The revenue of sellers under the positive review invitation strategy is delayed,while the increase in positive review cashback is not always beneficial to sellers’ revenue.Therefore,we propose reviews optimization strategy that is more favorable to the seller in the scenario of different changes in market size over the two periods.The research results of this paper provide a scientific reference and theoretical basis for the operational decision of online sellers and the review system management of e-commerce platforms. |
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