Pricing Strategy In Duopoly Of Perishable Products Under Advanced Booking Discount Model

With the development of technique and scientific accelerating ,the competition in market more fierce, product life cycle shortening and the updating of product more quicker , there are more and more perishable products.Recently, revenue management has becom new management technique. At the same time, as one of the three important major braches, the pricing has being paid more and more attention.This article studies pricing strategy under Advanced Booking Discount (ABD) mode by using revenue management under the background of market practice in a competitive environment.First, the literature on revenue management is organized in a simple - to - cimplex manner. In order to form the theoretical background of the rest of the article, the article provides the relevant theories.Then, this article assumes a duopoly market of perishable products. The sales period of perishable products is divided into booking period and regular selling period. The price in regular selling period is closely related to the discount rate in booking period. Four scenarios are discussed in this paper when two oligarches decide to dopt ABD mode or not: neither adopt ABD, only retailer A adopts ABD, only retailer adopts ABD, both retailers adopt ABD. This article pays much attention on the profitability difference and how to set the discount rate under these four scenarios. Based on the analysis of the four scenarios, the Nash– equilibrium in different situations is discussed. Then the profitability difference and the optional discount rate is given when there is a contract between the two oligarches. At the last , the relation between the optional discount rate and its parameters is discussed by one specific example.Based on above model, the scenario that there are one sulppier and two retailers is studied in the last. This article gives the best booking time of retailers and the best discount factor of supplier.Both the method of analysis and the conclusions in this ariticle can guide other studies on pricing under advanced payments. At the time, the conclusion in this article can help decision– makers make better decisions.