Abstract
The increasing homogeneous product market has made more competition among companies to focus on improving customers’ experience. In order to get more competitive advantages, companies often launch discount products to attract consumers. However, stimulated by discount products, the perception of anticipated regret is becoming stronger, which is an inevitable issue in front of companies with price discount strategy. Considering the impact of anticipated regret for discount products, this paper quantitatively describes the utility functions and deduces the demand functions of original price products and discount products. The theoretical analysis and numerical simulation are used to analyze centralized and decentralized models of supply chain for discount products. On its basis, the revenue-sharing contract is designed to optimize the profits of supply chain. This paper finds that the price of products increases first and then decreases with the increase of regret sensitivity coefficient and consumer heterogeneity. When the regret sensitivity coefficient and consumer heterogeneity are lower, companies in the supply chain can adopt the “skimming pricing” strategy in order to obtain more profits. When the regret sensitivity coefficient and consumer heterogeneity increase, companies in the supply chain can adopt “penetrating pricing” strategies to stimulate market demand. For high regret consumers, manufacturers can adopt a “commitment advertising” strategy to promise price and quality, and retailers can adopt a “prestige pricing” strategy to reduce consumer perception of regret. In response to products with higher differences in consumer acceptance, manufacturers can adopt a “differentiated customization” strategy to meet different types of consumer demand and retailers can adopt a “differential pricing” strategy for precise marketing.
Highlights
In the increasingly fierce market competition, companies generally like to implement discount products to acquire more market advantages and attract more customers, such as Amazon Black Friday, Tmall Double Eleven, and other national carnival shopping discount festivals
On the other hand, affected by the anticipated regret stimulated by discount products, the product returns will be seriously damaged during the return process
Aiming at the behavior of anticipated regret for discount product, this paper introduces the negative utility formula of anticipated regret to derive the demand functions of the original price products and the discount products
Summary
In the increasingly fierce market competition, companies generally like to implement discount products to acquire more market advantages and attract more customers, such as Amazon Black Friday, Tmall Double Eleven, and other national carnival shopping discount festivals. Stimulated by discount products, consumers often expect the current original price products and the future discount products separately When they realize that their current choices may regret in the future, the negative emotions shown are anticipated regret. Revenue-sharing contract is a new profit-based form of profit, and its flexible distribution mechanism is suitable for competitive supply chains whose demand depends on price [7]. In the face of discount product strategies that companies often adopt, what is the impact of anticipated regret on decision-making for consumers? How to guarantee the profits of the member companies of the supply chain under the consumers’ anticipated regret? E article enriches the behavioral economic theory related to consumer anticipated regret and provides practical basis for companies’ discount product strategies Revenue-sharing contract is widely used in real life as the most applicable and flexible contract in the supply chain coordination mechanism. e article enriches the behavioral economic theory related to consumer anticipated regret and provides practical basis for companies’ discount product strategies
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
