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Chinese Journal of Management Science ›› 2022, Vol. 30 ›› Issue (4): 108-118.doi: 10.16381/j.cnki.issn1003-207x.2021.1903

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The Impact of Strategic Consumer Behavior on Joint Decisions of Retailers’ Ordering and Consumer Loyalty Programs

GU Wei, ZHAO Xiao-hui, JIN Jia-hua, SONG Ya-nan, YAN Xiang-bin   

  1. 1. School of Economics and Management, University of Scinence and Technology Beijing, Beijing 100089, China
  • Received:2021-09-17 Revised:2022-01-13 Online:2022-04-20 Published:2022-04-26
  • Contact: 金家华 E-mail:jinjiahua@ustb.edu.cn

Abstract: The customer loyalty program is one of the retailer’s most important marketing tools. As an essential element of loyalty programs (LPs), the reward amount invested by the retailer is often linked to retailer’s profit and customer behavior. Considering the two-period selling system,joint decisions of retailers’ ordering and customer loyalty programs are studied in this paper. Based on the hypothesis of a perfectly rational person, strategic consumer models are constructed with two different points reward programs, that is, points reward program in the full price period and points reward program in the discount period. Based on the conclusions of the impact of different points reward programs on the group behavior of strategic consumers, the impact of retailers’ ordering decisions and different consumer loyalty programs on profits are analysed. It is found that: (1) the points reward program has an impact on the behavior of strategic consumers, thereby affecting the retailer’s joint decision-making and its optimal benefits; (2) the retailer’s joint decision-making of inventory ordering and customer loyalty program can increase its optimal benefits; (3) for products with low unit cost, the point reward program for the full price products has a greater increase in the optimal profit; (4) when the difference between product value and unit price of the product is small, there is a more increased optimal profit of the point reward program. Specifically, the point reward program for the full price products brings in more increased optimal profit when the unit cost of products is lower than the discount price; in contrast, the point reward program for the full and discount prices products brings in more increased optimal profit when the unit cost of products are higher than the discount price.

Key words: strategic consumers; retailer; ordering decision; customer loyalty program

CLC Number: