Dynamic channel decision-making of fresh agricultural product companies considering consumer convenience preferences

School of Economics and Finance, South China University of Technology, Guangzhou 510006, P.R. China

^* Corresponding author: yanbo@scut.edu.cn

Received: 18 August 2019
Accepted: 15 October 2020

Abstract

This paper studies the strategic channel decision-making of fresh agricultural product enterprises from the perspective of consumer convenience preferences. This research is carried out under the background of the upgrading of domestic consumption and the explosion of stay-at-home economy in China in recent years. In this paper, consumers are segmented firstly according to their different preference for consumption time, namely, convenience preference. Then, a channel decision model which considers the consumer convenience sensitivity and the inconvenience cost is proposed. Finally, the optimal wholesale price and delivery lead time of the supplier and the service level decision of the retailer are obtained by using backward induction method. The results show that under different market conditions, the supplier can adopt three equilibrium strategies: NR (No Retailer), CP (Capture Profit) and SP (Share Profit). With the change of inconvenience cost, the equilibrium state of supply chain will also change. Fresh agricultural product companies can choose different strategies to maximize their revenue according to different markets.