Demand Analysis and Customized Product Offering Design on E-Commerce Platform
Dipankar Das
TL;DR
The paper tackles demand analysis in e-commerce by extending the consumer choice domain to include quantity/pack size and by modeling demand under convex and non-convex domain structures. It develops a price-response framework with fuzzy consumer motives and a two-way consistency condition, deriving both individual and aggregate demands for two commodities across three domain configurations. It then defines a slab-based pricing mechanism and an associated expected revenue function, showing how domain structure and slab design influence revenue. The study provides a theoretical foundation for domain-aware pricing strategies that can reduce demand uncertainty and improve revenue, with practical implications for managers designing customized offers. Limitations include the focus on two commodities and a call for future empirical validation and extension to multi-commodity settings.
Abstract
It can be observed that the purchasing decision of an individual consumer in an electronic marketplace is determined by a set of factors, such as personal characteristics of the consumer, product pricing, minimum price-quantity combination offered, decision-making space, and underlying motivation of the consumer. These factors are combined to form a consumer's choice problem domain, which plays a pivotal role in the product offering. In this study, we attempt to focus on how the products? Offered can be customized by incorporating the quantity and pack size of the products along with the factors above to form a more extensive domain for examining the combined effects of all of these factors on demand. Accordingly, the demand function is defined by a novel method invoking the extended domain of choice problem in the electronic marketplace. Consequently, the predictable uncertainty associated with the consumer's demand function may disappear, increase the likelihood of earning optimum revenue through customized combinations of the components of the extended domain of choice problem, and improve the understanding of the fluctuations in consumer demand. Finally, we propose a generalized price response function with standard properties applicable to E-Commerce.