Study On Pricing And Revenue Allocating Decisions In Group Buying With Static Pricing Mechanism

As a new consumption way, group buying is the combination of e-commerce, web2.0, Internet advertisement and social networking. It holds a large market share and a major advantage in catering and healthy industry. As the improvement of Groupon website, group buying market in China gets vigorous development. However, many companies bankrupt quickly because of the price war. Although the price influences consumers’ online shopping behavior, depressing price without restraint is not the real way to survive.In the cooperation of merchant and group buying website, the spending time in group buying will influence their success. Long cycle means merchant will take much time to recycle the funds and earn less profit on each product sold. On the contrary, short cycle is not enough to attract more consumers. Besides, the merchant needs to pay a percentage of commission to the group buying website, which means a reasonable distribution rate is the key to motivate both sides when they work together. In short, the research of pricing, buying cycle and income distribution proportion is necessary.The thesis applies pricing theory into group buying industry, combing the qualitative analysis and quantitative analysis methods to study pricing and revenue allocating strategies between merchant and group buying website. The main contents of this paper are as follows:The first chapter introduces the research background and summarizes the overseas and domestic research status of group buying, dual channel pricing and consumer heterogeneity. The second chapter summarizes different group buying operation model and factors that influence consumers’ behavior, analyzes the development status of group buying in China.The third chapter uses Stackelberg game to study pricing and revenue allocating strategies between merchant and group buying website, two parts are included:1) the optimal pricing and revenue allocating strategy when group buying plays as the only sales channel,2) the optimal pricing and revenue allocating strategy when group buying plays as advertisement way.The fourth chapter uses Stackelberg game to study pricing and revenue allocating strategies between merchant and group buying website, two parts are included:1) the optimal decision in a hybrid channel composed of a traditional sales channel and a group buying sales channel with market segmenting, and2) the optimal decision in a hybrid channel with market segmenting when group buying plays as advertisement way.Within the scope study, the author has found the following results.1) as a rational agent, a merchant will participate group buying,2) the merchant needs to consider the time and advertisement effect to decide using group buying as a marketing channel or a advertisement way,3) the website should make strategy that be profitable for both sides instead of maximizing its own profit,4) the consumer heterogeneity will influence the optimal strategy.In the end, the author summarizes the main conclusion, points out the problem of current situation and prospects the further study in the future.