The Ordering Decisions Selling To Discount Sensitive Consumers

In recent years, with the improvement of people’s life, consumers purchase not only functional products but also fashion products. They purchase goods that are ―hard to find‖ to conspicuously display their exclusivity and social status. Therefore, in the fashion industry, affordable luxury products become more and more popular. At the beginning, Company CH pays more attention to the strategic consumer behavior, with frequent discounts to attract customers, but ignores that customers are sensitive to discount. So when it opened many outlets and launched promotions, the brand also declined.This article is based on the strategic consumer behavior model, consider customer’s sensitivity to discount and set up a model that addresses pricing and ordering decisions for a firm. In this article, it first discusses two parameters which are the customers’ sensitivity to discount and the possibility of firm’s promotion. And it finds that if the firm reduces the possibility of discount, it can allow the firm to offer higher availability of goods.Then, this article also discusses in a heterogeneous market, how the pricing and ordering decisions change with the fraction of the customer population. And it concludes that it’s profitable to the firm if the percentage of discount sensitive customers in the market reduces.Finally, according to the research conclusion, rational suggestions to the Company CH are put forward.