Comparisons of Pre-Sale Strategies for a Fresh Agri-Product Supply Chain with Service Effort

Huanyong Zhang, Huiyuan Xu and Xujin Pu
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Huanyong Zhang: Business School, Jiangnan University, Wuxi 214122, China
Huiyuan Xu: Business School, Jiangnan University, Wuxi 214122, China
Xujin Pu: Business School, Jiangnan University, Wuxi 214122, China

Agriculture, 2020, vol. 10, issue 8, 1-20

Abstract: Preselling strategies have been a common marketing tool, but research on this selection is limited. Thus, we examine three pre-sale strategies of a manufacturer who produces and sells a seasonal product to a retailer: (1) supplier pre-sale strategy—the supplier carries out preselling by opening a direct channel; (2) retailer pre-sale strategy—the retailer purchases pre-sale products from the supplier and sells them in online and offline channels; and (3) joint pre-sale strategy—the retailer acts as a pre-sale platform, providing order information and pre-sale services. For each preselling mode, we construct the Stackelberg game model aiming to maximize profits and obtain optimal service levels and pricing decisions. We find that the two latter scenarios, that is, to cooperate with the retailer (retailer pre-sale and joint pre-sale strategies), could highly gain more profit for the supplier compared with the former. For the supplier, the joint pre-sale strategy will likely be the dominant strategy because of its wide-range applicability. On the contrary, the retailer is swaying between retailer pre-sale and joint pre-sale strategies under different conditions. For the supplier, leadership always guarantees a high profit, but if the joint pre-sale strategy is adopted, then the existence of a profit-sharing ratio will narrow the profit gap between the two players.

Keywords: pre-sale strategy; service level; supply chain management; game theory (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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