Research On The Full-cut Promotion Strategy Of Enterprises Based On Psychological Reactance

The retail industry is experiencing increased competition as the degree of product homogenization increases.As a result,retailers are attempting to boost product sales and profits through various promotion methods.One promotional strategy that is preferred by retailers is full-cut promotion,because it can encourage customers to make a predetermined number of purchases in a short period of time.Full-cut promotion is a form of promotion for consumers to purchase the certain amount before enjoying the corresponding discounts.Empirical studies have proved that when consumers face such promotions with clear restrictions,they will feel that their shopping freedom is threatened,which will lead to psychological reactance,and may resent the promotion and even refuse to participate in it.This psychological characteristic of consumers may lead to promotional failure and thus affect retailer’s profit.Therefore,it is essential to take into account the psychological reactance of consumers when studying how retailers can design optimal strategies for full-cut promotion.In thesis,the psychological reactance is firstly portrayed.It is thought that when consumers increase their purchases by more than a certain percentage in order to comply with promotion requirements,psychological reactance will bring negative utility to consumers.On this basis,the consumer utility function is constructed and its purchase behavior is analyzed to obtain the consumer demand function,and then one threshold full-cut promotion model and two thresholds full-cut promotion model are constructed based on the retailer’s expected profit maximization,and the optimal strategy of one threshold full-cut promotion and two thresholds full-cut promotion are solved in turn,and the influence of market parameter changes on the optimal strategy and profit are analyzed by comparative static analysis and numerical analysis.Finally,the two types of full-cut promotion strategies are compared and analyzed,and the final optimal full-cut promotion strategy is obtained.This thesis concludes the following:First,retailers will implement full-cut promotion when the average profit margin of goods and the value coefficient of increasing purchased goods are relatively high;Second,when retailers implement full-cut promotion,only when the value coefficient of increasing purchased goods,the fixed proportion of psychological reactance and the intensity of psychological reactance are large,and the average profit margin of the goods is moderate,the retailer will implement two thresholds full-cut promotion,otherwise one threshold full-cut promotion will be implemented;Third,when the average profit margin of goods,the value coefficient of increasing purchased goods and the fixed proportion of psychological reactance,the smaller the intensity of psychological reactance,the higher profits will be achieved by implementing full-cut promotion,which shows that consumer’s psychological reactance will have a negative impact on retailer’s profit growth.