Advance Selling Of New Product Based On Network Externality And Return

With the advancement of technology,the speed of product upgrading has been accelerating,the life cycle of products has been shortened,and the production of enterprises has been transformed into a refined and customized direction.More and more merchants choose to implement advance selling when releasing new products.Implementing advance selling can not only better understand consumer demand,develop more rational production plans,achieve better supply and demand matching,but also help companies solve the problem of shortage of funds.However,is it suitable for each merchant to implement advance selling?What conditions do merchants need to meet for advance selling?For consumers,with the continuous enrichment of material life,consumers are no longer limited to the basic functional attributes of products themselves when choosing products.Trends has become another important factor for consumers to choose products,especially new products.For consumers who are eager to lead the trend,pre-purchase can ensure that they are the first to get the new products,but it also means waiting.The length of waiting time will affect the consumer's effectiveness and influence consumer decision-making.Therefore,once the merchant chooses to implement advance selling,it is not only the price but also the cycle.Then,when the seller implements advance selling,the decision of price and cycle becomes very important.In addition,with the rapid development of the Internet and offline logistics networks,network externalities and return services have a crucial impact on consumer decision-making,which affects merchants' pre-sale decisions.So,what changes will happen to the merchant's pre-sale decision?All of these questions need to be answered through theoretical research,The research in this paper is based on these issues.First of all,without the influence of network externality and return service,this paper obtains the basic market conditions for the pre-sale of the merchant and the optimal pre-sale by comparing the optimal profit of the merchant under the pre-sale and non-pre-sale methods.Secondly,this paper studies the optimal advance selling strategy of merchants when launching new products when there is network externality in the market.Network externality refers to the greater the number of consumers participating in pre-sales,the higher the additional utility of consumers who do not participate in pre-sales from the consumer network.Consumers who do not participate in pre-sales tend to be conservative followers,and the more people lead the consumer,the more consumers will be optimistic about the product,thus perceiving more additional utility.Finally,the paper further studies the optimal pricing and cycle strategy for merchants to provide return service after pre-sale.Emphasis is placed on the return service to reduce the risk of pre-sale consumers,thereby affecting consumer utility and decision-making,which in turn affects business decisions.The study found that the merchant's pre-sale strategy is related to four factors:consumer urgency,pre-sale additional utility,capital time value,and product cost,regardless of network externality and return behavior.When considering network externalities and return behavior,the four factors of consumer composition,network externality strength,product valuation uncertainty,and consumer return ratio will also affect the merchant's pre-sale decision.Network externalities generate more sales by increasing consumer utility,which is positively affecting merchant profits.On the basis of considering the time value of funds,the proportion of consumer returns continues to increase,and the pre-sale profits of merchants may not continue to decrease.Merchants should fully consider the impact of network externalities and returns when making pre-sale decisions.With the advancement of technology,the speed of goods renewal has been accelerating,the life cycle of goods has been shortened,and the production method of enterprises has been transformed into a refined and customized direction.In order to maximize profits,merchants need to spend a lot of manpower and resources to conduct market research on consumers and understand the market demand of products before they make production plans.As it turns out,the demand data obtained during market research is far from the actual sales.As a result,more and more businesses are beginning to implement pre-sales.Implementing pre-sales can not only better understand consumer demand,achieve better supply and demand matching,develop more rational production plans,but also help companies solve the problem of shortage of funds.