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Dynamic Pricing and Markdown Timing Policies for Fashion Goods with Strategic Behaviour of Consumers


Affiliations
1 Department of Logistics Management and Engineering, Zhuhai College of Jilin University, Zhuhai, China
2 School of Business, Macao University of Science and Technology, Macao, China
 

In this article, we discuss the optimal pricing strategy and best markdown timing in two sale periods for a monopoly seller, when faced with strategic consumers. Based on the Stackelberg game theory, a mathematical model is constructed to maximize the seller’s revenue when the markdown timing is certain or uncertain. Consumers are heterogeneous with different valuations for the same product. Moreover, after retailer decision-making, consumers would determine their purchase policies about the time and price, by comparing the prices and individual valuations in the two sale periods. Finally, a numerical example is considered to illustrate the optimal pricing strategy and best purchase policy.

Keywords

Fashion Goods, Markdown Timing, Pricing Strategy, Strategic Consumers.
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Abstract Views: 336

PDF Views: 112




  • Dynamic Pricing and Markdown Timing Policies for Fashion Goods with Strategic Behaviour of Consumers

Abstract Views: 336  |  PDF Views: 112

Authors

Yanli Fang
Department of Logistics Management and Engineering, Zhuhai College of Jilin University, Zhuhai, China
Xiangping Wang
Department of Logistics Management and Engineering, Zhuhai College of Jilin University, Zhuhai, China
Weijing Wang
School of Business, Macao University of Science and Technology, Macao, China
Ping Fan
Department of Logistics Management and Engineering, Zhuhai College of Jilin University, Zhuhai, China

Abstract


In this article, we discuss the optimal pricing strategy and best markdown timing in two sale periods for a monopoly seller, when faced with strategic consumers. Based on the Stackelberg game theory, a mathematical model is constructed to maximize the seller’s revenue when the markdown timing is certain or uncertain. Consumers are heterogeneous with different valuations for the same product. Moreover, after retailer decision-making, consumers would determine their purchase policies about the time and price, by comparing the prices and individual valuations in the two sale periods. Finally, a numerical example is considered to illustrate the optimal pricing strategy and best purchase policy.

Keywords


Fashion Goods, Markdown Timing, Pricing Strategy, Strategic Consumers.

References





DOI: https://doi.org/10.18520/cs%2Fv116%2Fi10%2F1648-1652