Research On Differential Pricing Strategy Considering Consumer Choice Behavio

The wide application of big data technology and artificial intelligence makes it possible for retailers to identify consumers according to consumers’ information.By using the information of consumers’ purchase history,the retailers maybe set different prices for different types of consumers so as to maximize their profits.Such a phenomenon is widely called behavior-based price discrimination.Indeed,consumer’s behavior has become a main factor that can be taken into account in decision-making because it can affect the firms’ strategic adjustment.In addition,in order to improve the operation efficiency,the firms are taking a variety of measures to ensure their positive interaction with consumers.Moreover,upgrading product policy is an important way for manufacturers to maintain their competitive positions in the market.Similarly,advertising policy is useful for retailers to attract new consumer groups.Strengthening the ability to understand consumer behavior,maintaining competitive vitality in the fierce competitive environment and accelerating the expansion of potential markets are of great significance for the members of the supply chain,which is also the main problem of this thesis.By referring to game theory,this thesis studies some questions as follows.(i)The necessity of differentiated pricing strategy and the influence of consumers’ product habits on firms’ pricing strategy.(ii)Will the new product policy of the manufacturer certainly bring more profits?(iii)Is the differentiated pricing necessary for the retailer to improve its profits?(iv)Will the market expansion(e.g.,advertising)definitely bring more profits to retailers?(v)Will the mixed strategy of launching new generation products and advertising lead to a win-win condition for both the manufacturer and retailer?In this thesis,several models are proposed for specific scenes,and by analyzing these models,we obtain the following results.(i)In the competition between the two duopoly firms,when considering consumers’ behavior and switching costs,they will adopt differentiated pricing strategies and offer a lower price to new customers while charging a higher price to loyal customers.The extra utility obtained by consumers affects the degree of price discrimination,while the switching cost deepens the degree of price discrimination.The degree of consumers’ habituation and the discriminatory pricing caused by the switching costs will affect firm’s profits.(ii)Upgrading products by manufacturers does not necessarily bring an increase in revenue,which depends on the quality level,cost input and market’s response to the upgraded products.Similarly,retailers’ expansion does not certainly bring them more profits,which depends on the cost of expansion.(iii)Updating products policy and advertising policy do not always enable the firms to obtain more total profits,and manufacturers and retailers can only achieve a win-win result under certain conditions.Updating products policy and advertising policy will influence firms’ pricing strategies.We can conclude that the level of new products quality and consumers’ sensitivity to advertising efforts are useful tools for retailers to adopt differentiated pricing strategies.(iv)Differentiated pricing strategy is not always optimal,whether a retailer implements a differentiated pricing strategy or not lies on the specific situation.