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| Research on Online Retail Promotion Strategy Considering the Long-Term Effect of Promotion |
| ZHANG Hua，LI Li，HE Xiang，ZHU Xingzhen，HU Jiao |
| Nanjing University of Science and Technology, Nanjing, China |
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Abstract For the online retail promotion problem, a two-period game model of platform and retailer is established by considering the long-term effect of promotion. The results show that, when there is no long-term effect of promotion, the retailer raises the price at promotion and restores the price to the level of the normal selling period price later at the end of the promotion, the platform only makes more profits at promotion. If the long-term effect of promotion is negative, the retailer raises the price at promotion and sets a lower price later at the end of the promotion, the profit of the platform increases during the promotion period but decreases later in the end. When the long-term effect of the promotion is positive, the retailer raises (reduces) the price at promotion if the consumers’ sensitivity to the platform cash coupons is higher (lower) than a certain threshold, and the retailer raises the price at the end of the promotion. Meanwhile, when the long-term effect of promotion is positive and higher than a certain threshold, the platform provides higher cash coupons to sacrifice sales profit for more profits at the end of the promotion period. On the contrary, the platform profits of two period increase.
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Received: 21 June 2021
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