An Empirical Research on Marketing Strategies of Different Risk Preference Merchant

Quan Chen, Jiangtao Wang, Jianjun Yu and Sang-Bing Tsai

Mathematical Problems in Engineering, 2018, vol. 2018, 1-11

Abstract:

Holiday merchandise has unique demand characteristics, unofficial start data, and a limited life cycle. In an intensely competitive market, individual merchants are able to get more sales opportunities if they display their products earlier. In this study, a time-variant variance and time-variant expected market demand model are introduced to investigate the order strategies that are used by risk-averse holiday merchants. Our results show that risk preference, market uncertainty, and market power have a significant effect on the merchant’s market strategies. Risk-averse merchants prefer to enhance forecast accuracy rather than using an early-display advantage. They can even give up their early-display advantage if they are faced with increased market uncertainty and small market power. Compared with the fixed purchase cost, the time-sensitive purchase cost can stimulate the merchant to purchase in advance, but this can decrease the merchant’s profit. Consequently, risk-averse merchants always display their merchandise later, decrease the order quantity, and, finally, miss the market opportunity.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:7947894

DOI: 10.1155/2018/7947894

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