Abstract
An increasing number of firms and retailers use presale strategies to induce customers to purchase before new products enter the market to increase their market share. Presales have gradually become a hot issue in business and academic circles. Based on a skimming pricing strategy and a penetration pricing strategy, this paper uses the different choice behaviors of two types of consumers to investigate the pricing strategy of preselling new products. The results show that if the proportion of fashion consumers is relatively low and their willingness to buy in the spot channel is below the threshold, the retailer should focus on traditional consumers by using a skimming pricing strategy; otherwise, the retailer should switch to a penetration pricing strategy. Moreover, we find that to gain more profits, the retailer should introduce a presale channel using either a penetration pricing or skimming pricing strategy. The introduction of a presale channel may not only reduce inventory risk and cost and enhance the market share and profitability of the enterprise but also help consumers avoid the risk of shortage and enhance their sense of security.
Highlights
In this paper, we regard online presales and offline spot sales as two types of purchase channels, namely, the online presale channel and the offline spot sale channel
We determine the conditions under which the retailer should use the penetration pricing strategy and the skimming pricing strategy as follows: if the proportion of fashion consumers is relatively low and their willingness to buy through the spot channel is below the threshold, the retailer should use the skimming pricing strategy to focus on traditional consumers; if both the proportion of fashion consumers and their willingness to buy in the spot channel are relatively high, the retailer should switch to the penetration pricing strategy
If fashion consumers have a low preference for spot channels, the retailer will adopt a skimming pricing strategy; when the proportion of fashion consumers reaches a limit, retailers will switch from a skimming pricing strategy to a penetrating pricing strategy
Summary
Consider a retailer who promotes and sells new products, especially scientific and technological innovation products, by combining the following two sales modes: (1) online presales, where consumers can make advance reservations through an online channel before the products officially enter the market, which is defined as the presale channel, and (2) offline spot sales, where consumers can directly purchase through the traditional offline channel after the products enter the market, which is defined as the spot channel. Us, the utility obtained by a traditional consumer buying the product through the offline spot channel is v − pjsi, where v is the consumer’s perceived value of the product and follows a uniform distribution on [0, 1]; pjsi is the spot price of the new product. For fashion consumers, they pursue fashion and the timely availability of new products, but due to the inherent uncertainty in the value recognition of new products, they will consider whether to buy the new product from online presale stage/channel or offline spot sale stage/channel. We assume that the proportion of fashion consumers is c, while the proportion of traditional consumers is 1 − c, and for the convenience of analysis, the population is normalized to 1, and a consumer can buy at most one unit of product
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