The pricing strategy for Fuji apple in Shaanxi of Chain under the e-commerce environment

The purpose of this paper is to present a new method and model for determining the optimal decision-making for the pricing strategy to the Fuji apple in Shaanxi of Chain which is representing fresh agricultural products under the e-commerce environment.

Considering the rapid development of information technology as well as internet that actually motivate the e-commerce, Fuji apple is a distinctive product in China’s Shaanxi; its sales channels have extended to online sales under the wave of e-commerce. Internet trading platforms make it possible to trade online in real time between suppliers and customers who live in different geographical areas. In this paper, the authors study how to price online to maximize the total revenue. The challenge is to optimally price two different qualities of apple. Based on the consumer surplus theory, the authors use the method that builds the function of the relationship between the proportion of consumers purchasing different qualities of products and price.

This paper presents a generalized model to determine the optimal pricing that maximizes the total revenue of a fruit grower over a finite planning horizon. The authors divided discount into two intervals and discussed the optimal discounting and pricing at both intervals. Then they determined the optimal pricing strategy for Fuji apple in Shaanxi of Chain under the e-commerce environment.

This paper makes up for the lack of existing studies of pricing under the e-commerce environment. A new method and approach to the traditional pricing strategy is established and applied to a management decision-making problem with Chinese characteristics in reality.