Points or Discount for Better Retailer Services
Service management at commodity goods retailers requires various kinds of strategic knowledge. This paper focuses on the (dis)advantages of mileage point and discount services. To uncover the characteristics of the two strategies, we are developing an agent-based simulator to analyze the behaviors of competing retailing stores and their customers. The retailer agents adaptively increase or decrease sales promotion of mileage point service and discounting based on their experiences and strategies to acquire customers. Customer agents, on the other hand, make a decision to choose one of the two retailers to repeatedly purchase daily commodities based on customer types and utilities. To explore the better strategies of retailers, we have conducted intensive simulation experiments. Our computational results have shown that the emergence of retailors’ cooperative behaviors and their stable relations strongly depends on to what extent the retailers decide the discounting rather than mileage point strategy at the very first stages.
KeywordsMileage points services Discount services Agent-based simulation Sales promotion of commodity goods
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