Research On Advance Selling Strategy With The Effect Of Social Network

The rise of internet and social network accelerate the development of advance selling strategy.With the help of social network,the communication distance and transaction costs between retailer and consumer are reducing gradually.On the social network platform consumers not only can get their favorite products,but also recommend products so as to influence their friends' purchase intention.it's normal for people searching for products information and make purchase decisions on the social network platform.So,considering the effect of social network on marketing strategy is the key point for retailers to increase profits.We consider the effect of social network to build the optimal advance selling model base on the former study and newsvendor model used in advance selling strategy to provide more reasonable sale strategy for retailers.Taking in to the effect of social network,we bring the experience sale period before implement advance selling period so as to increase the size of consumers and promote their purchase intentions.There are three strategies for retailers: no advance selling strategy,normal advance selling strategy and experience advance selling strategy.Through the comparative analysis of three strategies,we found that experience advance selling strategy is optimal for retailers when marginal profit is large.However,when marginal profit is small,there are two conditions,one is that with the much smaller of social network effect normal advance selling is the best choice,the other is that with the larger social network effect experience advance selling strategy is optimal for retailers.So,it's important for retailer to choose the optimal strategy on the condition of consumers' valuation and effect of social network.In the extension part,we build a model of advance selling with seeding consumers.In advance selling period,retailer can choice seeding consumers randomly to provide free products for them.As the payoff for the free products,seeding consumes should recommend to their friends on social network platform.Through the comparative analysis of normal advance selling strategy and advance selling with seeding consumer strategy,we found it's profitable for retailer to control the effect of social network and the number of seeding consumer.