Pricing Strategy Of Online Group-buying With Group Time And Group Size

Online group-buying,a win-win way of three parties,has been popular with more and more retailers,consumers and group-buying websites.Online group-buying not only meets the needs of consumers,but also solves problems that retailers expand market and inventory backlog.At the same time,group buying website extracts commission to gain profit.As for group-buying,retailers can not blindly reduce prices to attract consumers,should be more rational in order to get more profits.With the development of online group-buying,the mode of online group-buying is also gradually enriched.This paper studies the pricing strategy of business group buying mode under two circumstance:traditional business group-buying mode and group-spelling mode.First,based on traditional business group-buying mode with consideration of group-buying time,the retailer and the group-buying website respectively build the two stage profit optimization pricing model with waiting cost caused by group-buying time and demand diffusion effect caused by network and public praise.A numerical variation is designed to discuss the influences of the change of website commission,group buying time and demand diffusion effect on optimal decisions of the retailer and the group-buying website.Then based on group-spelling mode with consideration of group size,the retailer and the group-buying website respectively build the two stage profit optimization pricing model with energy cost spent by initiator and demand diffusion effect caused by network and public praise when retailer take online group-buying and offline traditional sales strategy.A numerical variation is designed to discuss the influences of the change of demand diffusion effect,energy cost of initiators and success rate on optimal decisions of the retailer and the group-buying website.The results show that in the traditional business group-buying modes,group-buying price decreases with the extension of group buying time,because the hidden costs of consumers affect the consumer's decision and then affect the retailer's optimal decision.In group-spelling mode,retailers should select the appropriate group size to maximize theirprofits.With the increase of group size,energy cost of initiator consumers will increase,then consumers will reduce,the profit of retailers and group website will reduce.In addition,retailers should select group buying websites with large popularity,large number of consumers and high service quality,because the demand diffusion effect of such websites is great.Through comparative analysis,the profit is larger in group-spelling mode than another.