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A two-period pricing model with hunger marketing strategy

Lili Yu (University of Science and Technology of China, Hefei, China)
Juzhi Zhang (University of Science and Technology of China, Hefei, China)

Journal of Modelling in Management

ISSN: 1746-5664

Article publication date: 12 February 2018

1356

Abstract

Purpose

This paper aims to investigate the effect of hunger marketing strategy on supply chain pricing and coordinate the supply chain through a two-period pricing model.

Design/methodology/approach

According to a two-period pricing model with hunger marketing strategy, the authors investigate two different scenarios: the centralized system and the decentralized system. The optimal or equilibrium solutions are calculated and compared in two different scenarios.

Findings

First, the hunger marketing strategy can improve the total profit of the supply chain by increasing the retail price and the total sales volume. Second, the hunger marketing strategy aggravates the double marginalization effect. Third, the authors introduce the revenue-sharing contract and characterize the conditions under which the revenue-sharing contract can coordinate the supply chain and be accepted by both the members.

Research limitations/implications

First, the authors suppose the same retail price in two periods for mathematic simplicity; second, they do not consider the discount factor for the revenue during the two periods.

Practical implications

This paper provides a guide to policymakers in terms of product pricing and supply rate.

Originality/value

First, the authors suppose the same retail price in two periods for mathematic simplicity; second, they do not consider the discount factor for the revenue during the two periods.

Keywords

Acknowledgements

This work was supported by the National Natural Science Foundation of China (71601176), the China Postdoctoral Science Foundation (2015M582018, 2017T100463) and the Fundamental Research Funds for the Central Universities (WK2040160026).

Citation

Yu, L. and Zhang, J. (2018), "A two-period pricing model with hunger marketing strategy", Journal of Modelling in Management, Vol. 13 No. 1, pp. 81-100. https://doi.org/10.1108/JM2-02-2016-0012

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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