Abstract:

Advance selling is a marketing strategy to sell products or services before the normal sales period. With the development of information technology， advance selling is becoming more common in the retail and service industry. Pricing and advertising are important issues in advance selling. When a consumer purchases a product during the advance-selling period and the normal sales period， the valuation of the product may be different， so consumers will purchase it strategically. To examine retailers’ optimal pricing and advertising during the advance selling period， in this paper， the commodity type differences and consumer preferences are taken into account， and the three situations of different types of goods in advance selling are analyzed： valuation increase， valuation decrease and valuation unchanged. Also， consumers’ strategic behavior is considered， and whether consumers will enter the market in the advance selling period are influenced by advertising. In addition， different with the normal sales period， the value-added effect is brought by obtaining earnings in advance， so the value-added coefficient is set in the advance selling period. Through constructing seller advance-selling model， the advance-selling strategy is analyzed under the joint decision of pricing and advertising.The result shows that in the case of valuation decrease， retailers should implement the advance selling strategy if the price of the normal sales period is higher and the value-added coefficient in advance selling period is low. In the case of valuation increase， retailers should take premium advance selling strategies if the price of normal sales period is lower. On the contrary， retailers should adopt discount advance selling strategies if the price of normal sales period is higher. In the case of valuation decrease， retailers should adopt discount advance selling strategies. In the case of valuation unchanged， when the price of normal sales period is higher， retailers should adopt discount advance selling strategies. When the price of normal sales period is lower， retailers should take original price strategies. In addition， retailers’ optimal advertising level increases with product valuation coefficient， the increment coefficient of the capital obtained in advance and the price of the normal sales period. Moreover， retailers’ profit increases with product valuation coefficient and the value-added coefficient in advance selling period. Also， the profit will increase first and then decreases with the price in the normal sales period.Management insights are provided for sellers in the advance selling. Before advance selling， it is necessary for sellers to conduct a market survey of the consumer market and analyze the valuation of advance-selling goods. And in the advance-selling strategy of different types of goods， sellers should implement different advertising and price strategies.

Key words: advance selling, pricing, advertising, consumer valuation