Pricing and Distribution Strategies in a Dual-Channel Supply Chain

2020 ◽  
Vol 13 (3) ◽  
pp. 23-37
Author(s):  
Guangye Xu ◽  
Hanguang Qiu
Keyword(s):  
Supply Chain ◽  
Price Competition ◽  
Wholesale Price ◽  
Theory Model ◽  
Distribution Strategy ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Brick And Mortar ◽  
Dual Channel Supply Chain ◽  
New Distribution

Internet has revolutionized distribution channels. Online orders are forwarded to the brick-and-mortar store to make the fulfillment, which is a new distribution strategy in a dual-channel supply chain. However, there is little research on the value of using such distribution strategy in dual-channel setting. To fill this gap, this article considers a manufacturer marketing a product through a dual-channel supply chain, comprised of an online channel and an offline retail channel. We develop a game theory model to investigate the pricing decisions and the distribution strategies, as well as to examine the impacts of the new distribution strategy on price competition and the dual-channel supply chain member's profits. By comparing the results of the traditional distribution strategy and the new distribution strategy, we find that the new distribution strategy can soften price competition when the proportion of the revenue generated by the direct channel is high enough, while if the proportion is low enough, it may intensify price competition. We also find that the supply chain members can achieve a win-win situation when the wholesale price is higher, and the proportion is greater under the new distribution strategy.

scholarly journals Strategic Provision of Trade Credit in a Dual-Channel Supply Chain

2021 ◽  
Vol 2021 ◽  
pp. 1-14
Author(s):  
Qin Wan ◽  
Yu Huang ◽  
Cuiting Yu ◽  
Meili Lu
Keyword(s):  
Supply Chain ◽  
Interest Rate ◽  
Price Competition ◽  
Trade Credit ◽  
Pricing Strategy ◽  
Dual Channel ◽  
Brick And Mortar ◽  
Online Channel ◽  
Dual Channel Supply Chain ◽  
Competitive Pricing

This study focuses on a a dual-channel supply chain that consists of a capital-constrained brick-and-mortar retailer and a manufacturer, where a manufacturer can simultaneously sell products through a traditional retail channel and a direct online channel. Supplementary pricing strategy and competitive pricing strategy are simulated in our model, and we find that the former one is the better choice for the manufacturer when the retailer suffers capital constraints. In our analysis, the capital constraint on retailer could mitigate the price competition between two channels, and it may be beneficial to the manufacturer under certain conditions. Our findings show that the manufacturer should strategically provide trade credit to retailers rather than unconditionally provide it. We present two trade-credit strategies (trade credit with positive interest rate and trade credit with zero interest rate) and suggest that the manufacturer should choose an appropriate trade-credit strategy according to the initial capital of the retailer. To guide the manufacturer when and how to provide trade credit, we conduct several numerical simulations based on our results and further plot out a graph to direct the manufacturer to an appropriate strategy of trade credit.

scholarly journals Effect of Capital Constraint in a Dual-Channel Supply Chain

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-14
Author(s):  
Lang Xu ◽  
Jia Shi ◽  
Jihong Chen
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Selling Price ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Channel Strategy ◽  
Pricing Decision ◽  
Key Factor ◽  
Online Channel ◽  
Dual Channel Supply Chain

Capital constraint is a significant factor that mainly restricts the development of small- and medium-sized enterprises. This paper explores the channel strategy and pricing decision in a dual-channel supply chain, which consists of one supplier and one retailer. Adequate and inadequate capital constraints for the supplier are distinguished by determining whether open the retail channel to sell. The observations offer managerial insights into supply chain member. First, the results indicate that the capital constraint is a key factor affecting channel strategies and pricing decisions. With the increased value of capital constraint, the wholesale price of offline channel and the selling price of online channel firstly decrease and then remain constant. Second, the results demonstrate that, with capital constraint, the supplier pays more attention to consumers’ brand loyalty if it chooses to open the online channel only. Additionally, the price-sensitivity parameter has no effect on the strategy of opening only the offline channel. Moreover, when the channel competition is too intense, the supplier will choose to only open the online channel strategy and increase the online selling price if the capital is insufficient.

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.

scholarly journals Research on the Maritime Logistics Pricing Model of Risk-Averse Retailer-Dominated Dual-Channel Supply Chain

2018 ◽  
Vol 25 (s2) ◽  
pp. 107-116
Author(s):  
Qing Fang ◽  
Zeping Tong ◽  
Liang Ren ◽  
Ao Liu
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Wholesale Price ◽  
Risk Averse ◽  
Market Demand ◽  
Maritime Logistics ◽  
Decentralized Supply Chain ◽  
Dual Channel ◽  
On Line ◽  
Dual Channel Supply Chain

Abstract Price decision is studied in a risk-averse retailer-dominated dual-channel supply chain, which consisting of one manufacturers and one retailer with both off-line and on-line channels. Firstly, two mean-variance models in centralized and decentralized supply chain are established. Secondly, the optimal solutions under the two decision modes are compared and analyzed. The results shows that the price of dual-channel of retailer decreased with the increase of retailers’ risk- aversion coefficient and the standard deviation of the fluctuation of market demand, while the wholesale price changes is on the contrary; in addition, when the market demand is greater than a certain value, the prices of dual channel are correspondingly higher in decentralized supply chain than in centralized supply chain, and vice versa. In addition, when the retailer’s risk aversion is in a certain interval, the expected utility of the whole supply chain is greater in centralized supply chain than in decentralized decision, and vice versa. Finally, a numerical example is given to verify the above conclusions.

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.

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