The Consumer Demand Estimating and Purchasing Strategies Optimizing of FMCG Retailers Based on Geographic Methods

Luyao Wang, Hong Fan and Tianren Gong
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Luyao Wang: State Key Lab for Information Engineering in Surveying, Mapping and Remote Sensing, Wuhan University, 129 Luoyu Road, Wuhan 430079, China
Hong Fan: State Key Lab for Information Engineering in Surveying, Mapping and Remote Sensing, Wuhan University, 129 Luoyu Road, Wuhan 430079, China
Tianren Gong: State Key Lab for Information Engineering in Surveying, Mapping and Remote Sensing, Wuhan University, 129 Luoyu Road, Wuhan 430079, China

Sustainability, 2018, vol. 10, issue 2, 1-17

Abstract: The fast-moving consumer goods (FMCG) industry is expected to grow dramatically given the rapid increase in purchasing power of Chinese consumers over recent years. In order to facilitate the sustainable development of the Chinese FMCG market, it is important for FMCG retailers to understand the provincial market demand and make out flexible purchasing strategies. This paper proposes a new combination of geographic methods to estimate market demand at the micro-scale through historical sales data. Based on the consumer demand of regions and the sales performance of nearby regions, this study also proposes a method to decide what kinds of optimizing purchasing strategies should be adopted for the retailers in different areas, the positive strategies or the conservative strategies. The sales data of FMCG retailers in Guiyang was used in the experiment, and the results showed that their theoretical sales could be improved by over 6.5% and 10.2 under two strategies. The findings indicate that this study can provide practical guidance for retailers to estimate the market demand, and develop suitable optimizing purchasing strategies, thus improving the profit of retails and decreasing the risk of products waste.

Keywords: demand estimating; spatial auto-correction; geographic units; purchasing strategies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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