scholarly journals Pricing Decisions of Competing Tobacco Enterprises with Online Channel

2015 ◽  
Vol 2015 ◽  
pp. 1-8
Author(s):  
Rong Zhang ◽  
Jackson Jinhong Mi ◽  
Bin Liu
Keyword(s):  
Stackelberg Game ◽  
Channel Structure ◽  
Pricing Strategies ◽  
Equilibrium Pricing ◽  
Sales Channels ◽  
Pricing Decisions ◽  
Online Sales ◽  
Dual Channel ◽  
Online Channel ◽  
Channel Structures

According to the new measurement of launching online distribution channels of tobacco enterprises in China, this paper investigates the tobacco firm’s pricing decisions on the supply chain which consists of two manufacturers and one retailer under three dual-channel structures. Three dual-channel structures include no online channel, only one online channel by one manufacture, and two online channels by two manufacturers. We apply the Stackelberg game to analyze the equilibrium pricing strategies under different structures and try to explore the necessity and advantages of launching online sales channels. The results demonstrate that the substitutability of a product has significant impact on introducing online sales channels, and the online dual-channel structure could result in less profit for manufacturers compared to the traditional retail channel structure; and thus, a dual-channel structure with online sales is not the best strategy for traditional manufacturers. Moreover, when the product is less substitutable, the effect of the tobacco control on the online sales channel is inferior to the traditional channels and vice versa.

scholarly journals The Impact of Consumers’ Peer-Induced Fairness Concerns on Mixed Retail and E-Tail Channels

2020 ◽  
Vol 2020 ◽  
pp. 1-15
Author(s):  
Yan-Fei Zhao ◽  
Yong Wang ◽  
Guo-Qiang Shi
Keyword(s):  
Supply Chain ◽  
Price Competition ◽  
Rapid Development ◽  
Pricing Strategies ◽  
Equilibrium Pricing ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Market Competitiveness ◽  
Fairness Concerns ◽  
The Impact

With the rapid development of e-commerce, online retailing has become an important part of the market. In order to improve market competitiveness and increase market share, more and more retailers have opened both regular offline channel and online e-tail channel to sell products. Then how to price becomes an urgent problem for upstream manufacturers and dual-channel retailers when there is price competition between regular channel and e-tail channel, especially when consumers have peer-induced fairness concerns. However, linking consumers’ behavioral factors such as fairness concerns to pricing decisions of mixed retail and e-tail channels draws little attention in the literature on supply chain management. This paper incorporates “consumers’ peer-induced fairness concerns” (CPFC) into pricing decisions in a dyadic supply chain, where dual-channel retailer obtains products from manufacturers and then sells products to consumers through both regular channel and e-tail channel. We use game-theoretic models to analyze the equilibrium pricing strategies under the setting with “symmetry consumers’ peer-induced fairness concerns” (SCPFC) and with “asymmetry consumers’ peer-induced fairness concerns” (ACPFC), respectively. Detailed comparisons and numerical analysis are further conducted to examine the impacts of different types of CPFC on equilibrium pricing strategies and profits.

Channel Structures of Online Retail Platforms

2021 ◽  
Author(s):  
Albert Y. Ha ◽  
Shilu Tong ◽  
Yunjie Wang
Keyword(s):  
Wholesale Price ◽  
Problem Definition ◽  
Channel Structure ◽  
Theoretic Model ◽  
Online Retail ◽  
Sales Channels ◽  
Channel Choice ◽  
Dual Channel ◽  
The Impact ◽  
Channel Structures

Problem definition: This paper investigates the channel choice problem of an online platform that exerts service effort to enhance the demand in its sales channels. Academic/practical relevance: In the existing literature on the channel structure of an online retail platform, it is usually assumed that a manufacturer sells through either the platform’s agency or reselling channel but not both. In practice, many manufacturers sell the same products through both channels of the same online retail platform, a phenomenon that cannot be explained by the existing theory. Moreover, online retail platforms routinely invest in retail services that enhance the demand in their sales channels. Methodology: We develop a game-theoretic model to investigate the equilibrium channel choice, wholesale price, and retail quantity decisions. We also conduct sensitivity analysis to evaluate the impact of some parameters on the equilibrium. Results: We derive conditions under which each of the three channel structures (agency channel, reselling channel, and dual channel) emerges in equilibrium. We show that the wholesale price in the reselling channel is reduced because of the addition of the agency channel even when both channels are equally efficient, which extends the wholesale price effect because of the addition of a less efficient direct channel in the supplier encroachment literature. Our analysis highlights the flexibility of a dual channel for firms to shift sales between the two channels, which could increase the retail platform’s incentive to exert service effort. Managerial implications: Our study provides useful insights to managers to understand and make channel choice decisions in supply chains with manufacturers selling through online retail platforms.

Channel structure and differential pricing strategies in dual-channel e-retail considering e-platform business models

2020 ◽  
Vol 32 (1) ◽  
pp. 91-114
Author(s):  
Yufang Fu ◽  
Bojun Gu ◽  
Yuying Xie ◽  
Jun Ye ◽  
Bin Cao
Keyword(s):  
Service Quality ◽  
Business Models ◽  
Dynamic Game ◽  
The Self ◽  
Channel Structure ◽  
Third Party ◽  
Pricing Strategies ◽  
Dual Channel ◽  
Channel Preference ◽  
Retail Prices

Abstract Although online business has been growing for some time, third-party e-platforms and their impact on e-channels are an under-explored area in the literature on dual-channel supply chains. Considering different combinations of open and self-support e-platform, this paper develops dynamic game models in four dual-channel e-retail structures to study pricing strategies and channel preference for manufacturers. The results provide interesting insights. First, a manufacturer’s optimal prices vary in different e-channels. Second, e-retail prices on the self-support e-platform and open e-platform are both affected by the e-platform’s service quality and commission fee. Regardless of the channel structure, a better service quality by one e-platform leads to an increase in its own e-retail prices and forces the competing e-platform to either improve its service quality or take a lower price. Lastly and more importantly, we compare the manufacturer’s pricing strategies and performances in different dual-channel e-retail structures and identify its preferences. Specifically, if the commission fee is dynamic, we find that the manufacturer always prefers to use two e-channels provided by different e-platforms, and at least one of the e-channels is the self-support model, although it is a sub-optimal strategy.

A Study on the Price Decisions of the Dual-Channel Composite Decision in B2C Mode

2014 ◽  
Vol 12 (4) ◽  
pp. 46-56 ◽  
Author(s):  
Haoxiong Yang ◽  
Wen Wang
Keyword(s):  
Marketing Channels ◽  
Online Marketing ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Online Retail ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Two Factors ◽  
The Subject ◽  
The Impact

This paper studies the subject of pricing decisions of online dual-channel based on hybrid decisions wherein a manufacturer introduces direct online marketing channels beyond the traditional online retail channels. The purpose is to study how to balance the interests of different online channels and maximize the overall efficiency of the channel. Having considered both online channels' satisfaction and the hidden costs of channel selection, by means of the demand function of both channels derived from a consumer utility and selection model, the author investigates the impacts of these two factors on the online dual-channel pricing decisions. This article also further analyzes the impact of changes in these two factors for manufacturers, retailers and channel' total revenue, with the purpose to provide decision-making reference for the enterprises' managers in the supply chain to develop optimal pricing strategies.

scholarly journals Pricing Decisions of a Dual-Channel Closed-Loop Supply Chain under Uncertain Demand of Indirect Channel

2016 ◽  
Vol 2016 ◽  
pp. 1-13 ◽  
Author(s):  
Jie Gao ◽  
Xiong Wang ◽  
Qiuling Yang ◽  
Qin Zhong
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Stackelberg Game ◽  
Uncertain Demand ◽  
Direct Channel ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Decentralized Decision Making ◽  
The Impact

The dual-channel closed-loop supply chain (CLSC) which is composed of one manufacturer and one retailer under uncertain demand of an indirect channel is constructed. In this paper, we establish three pricing models under decentralized decision making, namely, the Nash game between the manufacturer and the retailer, the manufacturer-Stackelberg game, and the retailer-Stackelberg game, to investigate pricing decisions of the CLSC in which the manufacturer uses the direct channel and indirect channel to sell products and entrusts the retailer to collect the used products. We numerically analyze the impact of customer acceptance of the direct channel (θ) on pricing decisions and excepted profits of the CLSC. The results show that when the variableθchanges in a certain range, the wholesale price, retail price, and expected profits of the retailer all decrease whenθincreases, while the direct online sales price and manufacturer’s expected profits in the retailer-Stackelberg game all increase whenθincreases. However, the optimal recycling transfer price and optimal acquisition price of used product are unaffected byθ.

scholarly journals Profit maximization models for a two-level dual-channel supply chain

2021 ◽  
Author(s):  
Raaid Batarfi
Keyword(s):  
Supply Chain ◽  
Profit Maximization ◽  
Channel Structure ◽  
Supply Chain System ◽  
Model Studies ◽  
Return Policy ◽  
Dual Channel ◽  
Before And After ◽  
Online Channel ◽  
Inventory Decisions

Internet-based technologies have changed the way firms do business and manage their supply chains. They have influenced customers’ purchase patterns, thereby motivating manufacturers to introduce online channels alongside traditional ones. Such structures are known as dual-channels. Nowadays, an increasing number of manufacturers offer a return policy to attract more customers and to stay competitive. Furthermore, learning-based continuous improvements help firms cope with market changes and be competitive, flexible and efficient. This thesis presents three main models: The first model investigates the effect of adopting a dual-channel (comprised of a retail channel and an online channel) on the performance of a two-level (vendor-retailer) supply chain. The objective is to maximize the total profit of the system by finding the optimal markup margin and inventory decisions before and after adopting the dual-channel. The results show that adding an online channel would increase the profit of the system. However, it creates a conflict due to competition between the retail and online channels. The second model studies a supply chain system, which is comprised of production, refurbishing, collection, and waste disposal processes. A return policy in which customers can return the purchased item for a refund is also considered. The purpose is to examine the effect of different return policies on the behavior of the system before and after adopting the dual-channel strategy. In both strategies, the model analyzes the change in the profit, the pricing and inventory decisions. The findings demonstrate that the more generous the return policy is, the higher the demand, the selling prices and the overall profit. The third model investigates the effects of learning and forgetting in the vendor’s production processes. It also considers single- and dual-channel strategies. Each channel structure can adopt any of six inventory policies. Learning and forgetting effects are considered in all policies except one. The objective is to maximize the profit of the system by finding the joint optimal pricing and inventory decisions. The results suggests that learning, despite being impeded by forgetting, reduces inventory-related costs thereby allowing the chain to reduce the prices of its product(s), which increases demand and subsequently sales.

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 Can Decentralization Drive Green Innovation? A Game Theoretical Analysis of Manufacturer Encroachment Selection with Consumer Green Awareness

Processes ◽  
2021 ◽  
Vol 9 (6) ◽  
pp. 990
Author(s):  
Dan Cao ◽  
Jin Li ◽  
Gege Liu ◽  
Ran Mei
Keyword(s):  
Supply Chain ◽  
Social Welfare ◽  
Stackelberg Game ◽  
Environmental Damage ◽  
Green Innovation ◽  
Online Sales ◽  
Dual Channel ◽  
Numerical Studies ◽  
Product Substitutability ◽  
The Impact

With the increase of public environmental awareness and the growth of e-commerce, sustainable development promotes the manufacturer to increasingly participate in green innovation and make full use of the online sales channel to enhance competitiveness. Despite decentralized encroachment being widely adopted in business reality, the current literature has commonly paid more attention to centralized encroachment. To complement related research, a dual-channel green supply chain composed of a manufacturer (its retail subsidiary) and a retailer is investigated. We focus on what encroachment strategy (centralization vs. decentralization) drives the green innovation and analyze the impact of consumer green awareness and product substitutability on the manufacturer’s encroachment strategy, green innovation efforts and supply chain performance. Under each encroachment strategy, we build a Stackelberg game model and derive the equilibrium outcome. Then, we theoretically analyze the effects of consumer green awareness and product substitutability on green innovation and each party’s profitability. Our comparative analysis shows what encroachment strategy drives green innovation and what encroachment strategy benefits both parties and social welfare. Numerical studies are also conducted to support the analytical results. Our key findings reveal that decentralization improves the green innovation and achieves a both-win situation for the manufacturer and the retailer. Besides that, decentralization can reduce the environmental damage and increase social welfare as well.

scholarly journals Manufacturer's channel selection in a capital-constrained supply chain under bargaining

2020 ◽  
Author(s):  
Qiang Yan ◽  
Fangyu Ye
Keyword(s):  
Supply Chain ◽  
Bank Loans ◽  
Channel Structure ◽  
Direct Channel ◽  
Equity Financing ◽  
Capital Shortage ◽  
Sales Channels ◽  
Optimal Decisions ◽  
Dual Channel ◽  
Retail Channel

In the context of a capital-constrained supply chain, we examine how a direct channel added by a manufacturer influences the players’ optimal decisions and profits under bargaining. The capital constrained retailer adopts a type of hybrid financing scheme including bank credit and equity financing to alleviate its capital shortage. We characterize the equilibrium results under different sales channels, and examine the impacts of the bank loans ratio and bargaining power on the players’ optimal decisions. The conditions of the equilibrium channel choices are derived. We find that if the retailer’s bank loans ratio in the retail channel is beyond a certain threshold, a dual-channel structure can enhance the profits of the manufacturer and supply chain. The retailer, however, will benefit from the direct channel when its bank loans ratio in the retail channel is below a certain threshold. We further demonstrate that a dual-channel structure can reduce the degree of double marginalization of the overall supply chain. In addition, to solve the potential channel conflict, a bilateral payment mechanism is developed to achieve Pareto improvement for both players. Numerical examples are included to illustrate the major results of the paper.

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