Pricing Strategy of Seed Suppliers under Consumer Preference and Herd Mentality

This paper studies the pricing decision of seed suppliers when consumer preference and herd mentality exist in farmers' purchase of seed. Based on Hotelling model and linear consumer utility function, this paper constructed seed supplier decision-making models under three modes of service-sensitive market, price-sensitive market and mixed market, and obtained the supplier's optimal profit, optimal additional service quality and optimal price under different models. Finally, the influence of consumer significance level coefficient on supplier profit is analyzed by numerical simulation. The results showed that with the increase of herd effect, the demand and profit of seed suppliers increased. In the service-sensitive market, the relationship between consumer's attribute sensitivity and enterprise profit is convex function, and there is an optimal significance level. In the price-sensitive market, the increase of attribute sensitivity will promote the increase of enterprise profit. The mixed market needs to be analyzed with the influence coefficient of additional service cost.