Equal Pricing Strategies in a Dual Channel Supply Chain

2011 ◽  
Vol 2 (4) ◽  
pp. 34-51 ◽  
Author(s):  
Ue-Pyng Wen ◽  
Yun-Chu Chen ◽  
Kam-Hong Cheung
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
Wholesale Price ◽  
Retail Price ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Cooperative Strategy ◽  
Dual Channel ◽  
Dual Channel Supply Chain

In this article, equal pricing strategies are studied in a dual channel supply chain where a manufacturer sells to a retailer as well as to consumers through a direct channel according to the assumption that the manufacturer commits setting the same retail price as the traditional channel to reduce the channel’s conflict. The authors first analyze the effect of different pricing strategies on the retail price, wholesale price and profits. The cooperative strategy is also studied to see how it benefits both parties in the dual channel supply chain. Finally, through a numerical example, it is demonstrated that providing convenience of the direct channel is important for the manufacturer and service is a distinctive advantage for the retailer. Furthermore, the paper shows that if the service quality has a significant effect on the direct channel, then the manufacturer tends to abandon commitment of equal pricing strategy.

Equal Pricing Strategies in a Dual Channel Supply Chain

2013 ◽  
pp. 230-249 ◽  
Author(s):  
Ue-Pyng Wen ◽  
Yun-Chu Chen ◽  
Kam-Hong Cheung
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
Wholesale Price ◽  
Retail Price ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Cooperative Strategy ◽  
Dual Channel ◽  
Dual Channel Supply Chain

In this article, equal pricing strategies are studied in a dual channel supply chain where a manufacturer sells to a retailer as well as to consumers through a direct channel according to the assumption that the manufacturer commits setting the same retail price as the traditional channel to reduce the channel’s conflict. The authors first analyze the effect of different pricing strategies on the retail price, wholesale price and profits. The cooperative strategy is also studied to see how it benefits both parties in the dual channel supply chain. Finally, through a numerical example, it is demonstrated that providing convenience of the direct channel is important for the manufacturer and service is a distinctive advantage for the retailer. Furthermore, the paper shows that if the service quality has a significant effect on the direct channel, then the manufacturer tends to abandon commitment of equal pricing strategy.

scholarly journals The Impact of Price Comparison Service on Pricing Strategy in a Dual-Channel Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-13 ◽  
Author(s):  
Qi Xu ◽  
Zheng Liu ◽  
Bin Shen
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Profit Maximization ◽  
Pricing Strategy ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Price Comparison ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
The Impact

Recently, price comparison service (PCS) websites are more and more popular due to its features in facilitating transparent price and promoting rational purchase decision. Motivated by the industrial practices, in this study, we examine the pricing strategies of retailers and supplier in a dual-channel supply chain influenced by the signals of PCS. We categorize and discuss three situations according to the signal availability of PCS, under which the optimal pricing strategies are derived. Finally, we conduct a numerical study and find that in fact the retailers and supplier are all more willing to avoid the existence of PCS with the objective of profit maximization. When both of retailers are affected by the PCS, the supplier is more willing to reduce the availability of price information. Important managerial insights are discussed.

Pricing Strategies in Dual-Channel Supply Chain with Retailer Direct Marketing

2014 ◽  
Vol 933 ◽  
pp. 902-906 ◽  
Author(s):  
Shu Juan Li ◽  
Ai Jun Liu
Keyword(s):  
Supply Chain ◽  
Direct Marketing ◽  
Chain Model ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Dual Channel ◽  
Supply Chain Model ◽  
Brand Promotion ◽  
The Difference ◽  
Dual Channel Supply Chain

A two-level dual-channel supply chain model was established in which retailer had his own direct channel. Game model was constructed based on two cases of decentralized and centralized decision-making. Pricing strategies of manufacturer and retailer were studied. Impacts of different channel and different sale entities on manufacturer and retailer were examined. Results show that when channel substitution increases and market share of retailer direct channel is small, retailer should choose to give up direct channel and focus on retail channel sales and take direct channel as means of propaganda and brand promotion. When the difference of sale entities reduces, consumers can get more surplus.

scholarly journals Managing a Dual-Channel Supply Chain with Fairness and Channel Preference

2021 ◽  
Vol 2021 ◽  
pp. 1-10
Author(s):  
Xianjin Du ◽  
Weijie Zhao
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Retail Price ◽  
Supply Chain Design ◽  
Operational Strategies ◽  
Dual Channel ◽  
Channel Preference ◽  
Online Channel ◽  
Set Up ◽  
Dual Channel Supply Chain

This paper investigates a dual-channel supply chain in which a manufacturer sells the product via an offline retailer or online store. The manufacturer sets the wholesale and online price, and the retailer decides the retail price with the retailer’s fairness preference and consumer’s online channel preference. Through investigating the combined impacts of fairness preference and channel preference on the enterprises’ operational strategies, this paper obtains some meaningful results. If a manufacturer thinks over the fairness preference, he decreases the wholesale price to mitigate a loss of retailer and benefit the supply chain design. The manufacturer intends to set up the online channel with a lower acceptance as the fairness preference grows. However, the gains from enhanced online channel acceptance cannot compensate for the manufacturer’s loss by the fairness effect that benefits the retailer. Moreover, the manufacturer cannot neglect the retailer’s fairness preference generating a “lose-lose” case for both members.

Pricing Strategy in Dual-Channel Supply Chains with Loss-Averse Consumers

2019 ◽  
Vol 36 (05) ◽  
pp. 1950027
Author(s):  
Chengli Liu ◽  
C. K. M. Lee ◽  
K. H. Leung
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Pricing Strategy ◽  
Direct Channel ◽  
Basic Product ◽  
Luxury Goods ◽  
Dual Channel ◽  
Channel Strategy ◽  
Basic Goods ◽  
Dual Channel Supply Chain

In this paper, loss-averse consumer behavior during purchase decision-making process in the dual-channel supply chain is modeled. Loss-averse consumers prefer avoiding losses to gain utility with respect to their reference point while purchasing the product. Two product categories are classified: (1) basic product and (2) luxury goods which have lower and higher reference utility to consumers, respectively. The research objective is to determine the optimal price strategy in dual-channel supply chains and discuss the decision behind loss-averse consumers. To model consumers’ valuation of a product, prospect theory is adopted to calculate the demands of each channel. Then, the optimal pricing strategy and the corresponding profits are found out in a Stackelberg game manner. The results encourage manufacturers of basic goods to engage in dual-channel strategy. Effect of “double marginalization” is reduced if consumers are loss-averse in the dual-channel supply chain. Furthermore, the direct channel online contributes larger demand to the manufacturer. However, manufacturers of luxury goods are not suggested for dual-channel strategy because the demand for direct channel online is negligible and the demand for the retail channel remains unchanged. Nevertheless, retailers cannot obtain benefit from dual-channel and as a result, the profit of basic goods retailers will be reduced.

scholarly journals Pricing Strategies in Dual-Channel Supply Chain with a Fair Caring Retailer

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-23 ◽  
Author(s):  
Lufeng Dai ◽  
Xifu Wang ◽  
Xiaoguang Liu ◽  
Lai Wei
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Equilibrium Solutions ◽  
Channel Competition ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Dual Channel Supply Chain ◽  
The Impact

Manufacturers add online direct channels that inevitably engage in channel competition with offline retail channels. Since price is an important factor in consumers' choice of purchasing channel, pricing strategy has become a popular topic for research on dual-channel competition and coordination. In contrast to previous research on pricing strategies based on the full rationality of members, we focus on the impact of retailers' fairness concerns on pricing strategies. In this study, the hybrid dual-channel supply chain consists of one manufacturer with a direct channel who acts as the leader and a retailer who acts as the follower. First, we use the Stackelberg game approach to determine the equilibrium pricing strategy for a fair caring retailer. Simultaneously, we consider a centralized dual-channel supply chain as the benchmark for a comparative analysis of the efficiency of a decentralized supply chain. Furthermore, we study pricing strategies when the retailer has fairness concerns and determine the complete equilibrium solutions for different ranges of the parameters representing cross-price sensitivity and fairness. Finally, through numerical experiments, the pricing strategies, the profit and utility of the manufacturer and retailer, and the channel efficiency of the supply chain are compared and analysed for two scenarios. We find that fairness concerns reduce the manufacturer's profits, while for the most part, the retailers’ profit can be improved; however, the supply chain cannot achieve complete coordination.

scholarly journals Dynamic vs. Static Wholesale Pricing Strategies in a Dual-Channel Green Supply Chain

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-14 ◽  
Author(s):  
Yongzhao Wang ◽  
Xiaojie Sun
Keyword(s):  
Energy Efficiency ◽  
Supply Chain ◽  
High Energy ◽  
Pricing Strategy ◽  
Green Supply Chain ◽  
Green Product ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Dual Channel ◽  
Wholesale Pricing

With the improvement of social environmental awareness, the dual-channel green product sales mode has been widely used by many manufacturing firms. In this paper, we consider a dual-channel green supply chain where one manufacturer produces a green product and sells it through one retail channel and its own direct channel. Consumers in the two channels have different perceptions of the product energy efficiency level due to different purchasing experiences. The product energy efficiency level evolves over time and is characterized as a dynamic variable. By developing and solving the Stackelberg differential game problems under the dynamic and static wholesale pricing strategies, respectively, we obtain the main results in this paper. First, the manufacturer has more incentives to invest in green innovation when more consumers buy the green product through the direct channel. Second, the manufacturer prefers to adopt the dynamic wholesale pricing strategy in most cases and prefers the static one only when the consumers in both channels have relatively high energy efficiency perceptions. By introducing the transfer payment contract, we show that the static wholesale pricing strategy may be the better choice, which leads to a win-win outcome for both members. Finally, sensitivity analysis further provides some managerial insights and verifies the robustness of the results.

PRICING AND INVENTORY STRATEGIES FOR A TWO-STAGE DUAL-CHANNEL SUPPLY CHAIN

2012 ◽  
Vol 29 (01) ◽  
pp. 1240004 ◽  
Author(s):  
RUN H. NIU ◽  
XUAN ZHAO ◽  
IGNACIO CASTILLO ◽  
TARJA JORO
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Product Line ◽  
Two Stage ◽  
Web Based ◽  
Dual Channel ◽  
Eoq Model ◽  
Joint Pricing ◽  
Dual Channel Supply Chain ◽  
Offline Channels

The Internet is becoming increasingly important as a sales channel. Thus, most large retail firms have adopted a multi-channel strategy that includes both web-based channels and pre-existing offline channels. In this paper, we consider joint pricing and inventory/production decision problems for members in a monopoly two-stage dual-channel retailer supply chain. For a dual-channel retailer, pricing in one channel will affect the demand in the other channel. This subsequently affects the retailer's replenishment (ordering) decisions, which have an impact on the producer's inventory/production plans and wholesale price decisions. It is clear then that pricing decisions and inventory/production decisions are interacting in each member of the supply chain and among the members in the chain as well. In this paper, we analyze joint pricing and inventory/production problems under three scenarios by incorporating intra-product line price interaction in the EOQ model. We show that a unique equilibrium exists under certain realistic conditions. We also provide numerical results that offer insights for pricing strategies for the dual-channel retailer supply chain and for product design for different channels.

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