Analysis on RFID operation strategies of organic food retailer

- View the RFID technology as an operation strategy to consider the quality problem.
- Propose three models to analyze different markets and different channels.
- Substitutability and basic market share influence the customers' behavior.
- No matter two factors how to change, the dual channel is the best choice for the retailer.

It is common sense in the food industry to guarantee the food safety by establishing the traceability mechanism which can make all aspects more transparent from farm to fork. This paper views the RFID technology as an operation strategy to ensure food safety, and proposes three pricing decision models according to different operation strategies and market situations. It is shown that two factors, the production substitutability and the basic market share, influence the retailers' operation strategies. No matter how two factors change, the dual-channel system is always the best choice for the retailers. By investigating consumers' behaviors and preferences, we find that most consumers in Zhengzhou city prefer to buy food from the low-end market, and the retailers, however, prefers to sale via the dual-channel system, which is in accordance with the result of models.