Advance selling in the presence of product diffusion effect

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• 作者：Xiaoyan Xu ; Xuemei Li ; Yiwen Bian…
• 关键词：Advance selling ; product diffusion ; strategic consumer behavior ; interface on marketing and operations management
• 刊名：Journal of Systems Science and Systems Engineering
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：26
• 期：1
• 页码：77-99
• 全文大小：
• 刊物类别：Engineering
• 刊物主题：Complexity; Economic Theory/Quantitative Economics/Mathematical Methods; Operation Research/Decision Theory;
• 出版者：Springer Berlin Heidelberg
• ISSN：1861-9576
• 卷排序：26

文摘

Product diffusion refers to the phenomenon that the later demand is dependent on the early sales. To investigate how a firm’s advance selling strategy is affected by the effect of product diffusion, we consider a monopolist seller who sells a fashionable product in a market that comprises of myopic and strategic consumers over two periods (i.e., the advance selling season and the regular selling season). For a linear product diffusion effect we find that, when the effect of product diffusion is positive, the seller may set an extremely high advance selling price to induce the strategic consumers to purchase in the regular selling season, which is counter-intuitive. Moreover, the optimal procurement quantity for the seller may increase in the negative effect of product diffusion and decrease in the amount of strategic consumers. When we extend our model to consider a concave quadratic product diffusion effect, however, the optimal procurement quantity is concave in the amount of strategic consumers. Numerical studies are further presented to discuss the managerial insights.