Retail Organizations’Response to the Heterogeneous Consumers’ Demand and the Match between Them
——A Theoretical Analysis
HUANG Yu-ting (Beijing Wuzi University,Beijing101149,China)
Abstract:The author explores how retail organizations match and respond to heterogeneous consumers’demand from such two dimensions as the retail organizations' format development and their competitive strategy. In particular,consumer’s utility function is constructed,taking into account the existence of consumers’heterogeneity. And the author builds the economic relationship models of consumers and retailers’ economic activities based on related theoretical researches. The author demonstrates how consumers' preference heterogeneity,as well as the non- observable individual heterogeneity,affects the evolution and development of retail organization's formats and the selections of competitive strategies between retail organizations. It is found that consumers’preference heterogeneity is the root cause of the emergence of new forms,along with the multi-formats structure of retail market. And unobservable individual heterogeneity directly adjusts the market share of each format and the retail organizations’selection of competitive strategies. According to the conclusions,the multi-format structure of retail market will be consolidated and strengthened in the future,and differentiated business strategy will replace the traditional price war,becoming the key to retail organizations’competition.
Key words:consumer heterogeneity;cost shifting;retail organizations’competition;evolution of retail formats