A Dynamic Pricing Model for Imported Advent Foods Considering Freshness

Abstract

To leverage the economic and social value of advent foods, for a market where strategic consumers and myopic consumers coexist, introducing a freshness function that shows changes in consumer perceived quality, considering its effect on demand and probability of purchase, a two-stage pricing model to maximize the retailer's profit was developed, and the optimal pricing and markdown time were computed with Matlab. The results show that: strategic consumers reduce retailer profits, and the smaller the proportion of strategic consumers, the earlier the retailer's markdown point; retailer profits increase as the freshness time sensitive factor decreases, the price elasticity factor decreases, and the potential market demand increases.