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Articles

Price and Time Decision of Service Provider on O2O Model

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  • School of business, Central South University, Changsha 410083, China

Received date: 2016-06-23

  Revised date: 2016-12-15

  Online published: 2018-04-20

Abstract

With the rapid development of e-commerce and mobile commerce, more and more consumers are accustomed to online shopping. Online consumers can book and pay on enterprise website, mobile client or a third party website, and then go to physical store to accept their services by electronic bill. O2O (online to offline) channel is defined as consumer to complete the transaction channel by online payment and offline experience. The Situation that Service providers combine online operation of O2O channel is called the O2O model. Whether the service provider who owns physical channel should open O2O channel and how to price is investigated and the service level if the O2O channel has been open is determined. The utility function through waiting time of physical store and the price difference of physical store and O2O channels are analyzed, and study on selection strategy, pricing strategy and time strategy of the service provider whether she open O2O channels or not are studied. First, considering the impact of waiting time of physical channel on consumers' utility, the consumer channel choice model is built, and service provider' channel strategy and pricing strategy have been gotten when the service provider has pricing power. The results show that the level of time sensitivity of consumers is higher than the level of price sensitivity. Secondly, the price is taken as a constant and the impact of waiting time on the cost of the service providers is considered, and the channel and service lever strategy under the condition that the service provider has no price power is studied. The results show that the service provider open two channels simultaneously on condition that both the price of O2O channel and the time cost of physical channel are low.

Cite this article

ZHOU Xiong-Wei, WANG Miao-Rong, XU Chen . Price and Time Decision of Service Provider on O2O Model[J]. Chinese Journal of Management Science, 2018 , 26(2) : 54 -61 . DOI: 10.16381/j.cnki.issn1003-207x.2018.02.006

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