Study On Product Price Strategies With Consumer Anticipated Regret

With the change of market supply and demand,the era of customer-orientation comes.Advances of technologies further promotes adoption of the new marketing modes,both of sellers,and customers,are changing quickly.From the standpoint of operations management,this dissertation builds mathematical models in order to describe and solve phenomena and problems of enterprises in dynamic pricing,innovation and marketing management practice.The problems includes the two-period markdown management problem under the condition of deterministic and uncertain demand,the interaction between product rollover strategies and strategic customer purchasing behavior and how should the firm use behavior-based pricing(BBP)to discriminate between its own and competitors'customers in a competitive market and how to most profitably manage the consumer's anticipated regret,in order to help managers make decisions to utilize resources and grab business opportunities.On the other hand,due to the convenience of information access channels,consumers gradually have capability to make more reasonable judgments over future business plans and other information of the enterprises,and take future purchase options into consideration,that is,strategic behavior.In addition,consumers often need to make purchase options before knowing the true values from new products or services.Once the true values are determined,consumers will regret that they could have made a better option,so they will consciously anticipate the possible regrets before decision making,i.e.,anticipated regret.The existence of consumer strategic behavior and anticipation regret will greatly affect the decision-making of enterprises and make them evolve new characteristics and laws.This thesis establishes a framework of studying the behavioral decisions in a dynamic game model between the consumer and both firms games,proposes and establishes an effective behavioral decision model,which provides foundation for further optimization and the mechanism design in future.Theoretically,this study puts forward a decision-making method based on the regret theory,which is an enrichment and exploration of risk decision-making model under uncertain conditions.Practically,the proposed method is more relevant to the reality,and it offers a planned strategy against the prevalent consumer regret and currency-holding wait-and-see policy behaviors.Main contents of this dissertation are as follows:First,We consider the effect of anticipated regret on the two-period markdown management problem which have not been considered in the traditional research.We develop a model of consumer decisions that accounts for anticipated regret and then analyze the optimal decision strategy on pricing and inventory for the retailer.Furthermore,this paper extends the traditional newsvendor model.A new model of consumer decisions that accounts for anticipated regret is developed,and then the optimal decision on inventory for the retailer is solved.Third,the continuous innovation serves as the engine of an enterprises'sustainable development.Therefore,the frequent new product introductions have become normal.This chapter extends the two-stage basic pricing model,explores how consumers with complex behavior characteristics make purchase options between two generations of products from enterprises which are oriented to continuous innovation,and thus analyzes the upgrading strategies,new product pricing and discount level over old products for enterprises.Fourth,firms in many industries(including telecommunications,financialservices,newspaperandmagazinesubscriptions,and Internet-based commerce)can recognize their previous customers and can thus price discriminate on the basis of purchase history.Advances of information technologies ease collection of customer data,and data-driven marketing further promotes adoption of BPD.Not surprisingly,such behavior-based price discrimination(BPD)has drawn growing research interests over the past decade or so.We introduces consumers'valuation uncertainty,and assume that consumers do not observe their values of each product before purchase when the firms practice BPD.Once the true values are determined,their purchase decisions made under such uncertainty may lead to post-purchase regret.So they will consciously anticipate the possible regrets before decision making,i.e.,anticipated regret.To investigate the effects of customer anticipated regret on dynamic price competition,we consider behavior-based price discrimination(BPD)in a two-period experience good duopoly with a discrete value distribution.First,we establish a dynamic game model between the consumer and both firms.Furthermore,the equilibrium configuration when the firms practice BPD is summarized in two types of regret aversion:(a)r_S(29)r_R(28)0and(b)r_R(29)r_S(28)0,which can provide firms with guidelines about how should the firm use behavior-based pricing(BBP)to discriminate between its own and competitors'customers in a competitive market and how to most profitably manage the consumer's anticipated regret.Finally,the dissertation concludes the research and proposes future research topics.