Optimal decisions on group buying option with a posted retail price and heterogeneous demand

Ni, Guanqun; Luo, Li; Xu, Yinfeng; Xu, Jiuping; Dong, Yucheng

doi:10.1016/j.elerap.2014.10.005

Cited by 20 publications

(15 citation statements)

References 37 publications

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“…Gao and Chen (2015) [14] found that no show of voucher buyers could be good for (large or start-up) sellers. Ni et al (2015) [15] studied the optimal pricing strategy of sellers by classifying customers into collectivist and individualistic customers according to actual market information. Taleizadeh et al (2015) [16] investigated the joint multi discount pricing and ordering problem when demand for deteriorating product changed with time.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, as a platform for implementing group-buying, the corresponding websites should receive greater attention. The mechanism of GBW experienced the evolution from dynamic pricing model (e.g., [6{8]) to xedpricing model (e.g., [14,15,17]). The dynamic model focuses on the quantity and pricing scheme, that is, the greater the quantity, the lower the price.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, the business model is too complex for the websites to operate, leading gradually to the cessation of its operation [18]. In 2008, Groupon, originated in Chicago, introduced deal-of-the-day business model, which is the original form of xed-pricing model [15]. Groupon achieved great success from the second quarter of 2009 to the rst quarter of 2011 and has a revenue growth from $3.3 million to $644 million.…”

Section: Literature Reviewmentioning

confidence: 99%

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Coordination of traditional and online group-buying channels considering website promotion effort

2018

Scientia Iranica

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The development of modern technology and e-commerce has given rise to the emergence of many new selling channels, among which group buying has managed to attract numerous new customers rapidly because of such features as good discounts and great convenience. Although a good discount scheme creates sales growth for sellers, it also causes loss in their pro t margins. Meanwhile, the business model of group-buying websites is not thoroughly explored in literature. Based on a Stackelberg game framework, this paper studies the equilibrium between a group-buying website and a seller. The optimal pricing and channel decisions of the seller and the optimal group-buying pricing and promotion e ort decisions for the website were investigated to o er guidance for their businesses. It was found that the total pro t of the whole system could be hurt when the agreement price or revenue-sharing contracts were adopted by the rms. A revenue-cost sharing contract was proposed that could coordinate the total pro t. Finally, this study shows how the scale of the seller and the website and the unit cost can a ect optimal decisions in equilibrium.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Coordination of traditional and online group-buying channels considering website promotion effort

2018

Scientia Iranica

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“…They argue that information update has a positive effect on customer surplus and the GB success rate. Focusing on the negative network effects, Ni et al [17] divide consumers into two segments according to their communication costs in GB and find that offering a GB option might decrease seller’s profit in several circumstances. Based on a game theoretic formulation, Ni et al [18] argue that GB is more efficient when the communication cost is smaller and there is also an upper bound of communication cost for the seller to offer a GB option.…”

Section: Introductionmentioning

confidence: 99%

A pricing model for group buying based on network effects

2019

PLoS ONE

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Group buying (GB) is a popular business model in e-commerce. With the rise of online social media, the positive network effect of buying with others is more important than price discount for consumers to choose GB. However, the negative network effect of GB is also significant for some consumers. In this paper, we classify consumers into two segments considering both positive and negative network effects, and three possible sales strategies as well as their optimal decisions on price are presented. We find that GB strategy dominates individual buying (IB) strategy when the positive network effect is sufficiently high or the proportion of consumers with low valuation is relatively large. We also find that MIX strategy offering both IB and GB is always better than IB, while the relationship between MIX and GB is depending on actual market situations. Some other managerial insights are also discussed.

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“…But those models don't exist in today's group-buying website. This paper focuses on the newest and widely applied model to consider seller's revenue management which the seller just needs to announce the group-buying price and related selling period [2]. In the traditional revenue management, the decision-maker is often assumed to be myopic in the sense that he only cares about his immediate profit.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Customer Perceived Service Quality on the Optimal Group-Buying Strategy

Wu¹,

Zhu²

2016

Proceedings of the 2016 International Conference on Applied Mathematics, Simulation and Modelling

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Abstract-In this paper, we study the popular group-buying model in which theseller offers discount on the group-buying websites to attract new customers coming to experience its service. This paper analyses seller's pricing decision between only running offline business and joining the group-buying business. We find that when only running offline business, higher perceived service quality will bring more profit for the seller. However, if the seller joins the group-buying website and the perceived service quality is relatively low, seller's profit will decrease with it. If the seller's service quality is higher than the perceived service quality, he will improve his regular price after joining the group-buying website. Moreover, only when the group-buying website scale is relatively big can the seller make more profit by joining the group-buying website.

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Optimal decisions on group buying option with a posted retail price and heterogeneous demand

Cited by 20 publications

References 37 publications

Coordination of traditional and online group-buying channels considering website promotion effort

Coordination of traditional and online group-buying channels considering website promotion effort

A pricing model for group buying based on network effects

The Effect of Customer Perceived Service Quality on the Optimal Group-Buying Strategy

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