Research On Differential Pricing Considering Consumer Environmental Preference

There are more and more products with same or similar functions in the market because of consumers’different preferences. The fierce competition market forces retailers to price the product in consideration of consumers, rather than the traditional approach oriented product costs. Based on this background, this paper considers from the perspective of consumers and takes the consumer utility maximization as basis of consumers choices. This paper considers the retailer and the two manufacturers’ pricing strategy when the common product and the environmentally friendly product are sold at the same time. In this paper, the common product and the environmentally friendly product are functionally the same, one kind of products will be affected by its price and the other product’s price. Specific studies of this paper include:Considering a supply chain system composed of two manufacturers and one retailer. The retailer sells the common product and the environmental friendly product at the same time, and one manufacturer produces the common product and the other manufacturer produces the environmental friendly product. First the decision model is built on not considering the consumer environmental preferences. The decentralized decision model and the centralized decision model are used for analysis. In this case, the consumer’s utility is based on the product value and the actual price, and the consumer chooses the product whose utility is more.Then the consumer environmental preferences is included in the retailer’s pricing decision model. So the consumer’s utility also includes the environmental preference. The decentralized decision model and the centralized decision model are used for analysis. After that, the same decision models with different situations are compared.Finally, example analysis is used to analyze the environmental friendly product’s price and the ordinary product’s price, the wholesale prices, profit and environmental protection of the variable. The example analysis explains the correctness and rationality of this paper’s research conclusions.