Abstract: This article investigates the retailer's optimal replenishment and responsive pricing strategies in a heterogeneous market where consumers have various utilities over similar products.We find the optimal pricing and replenishment quantities in analyzing a two-stage model.We also demonstrate the replenishment strategies when the retailer adopts market clearance price (a special case of price postponement)or no-postpone price.Through numerical examinations,we explore the effects of different parameters on the retailer's replenishment quantities and profit in these different pricing modes (responsive,clearance and non-postpone pricing).

Key words: responsive pricing, heterogeneous, substitutable