Optimal channel structure for a green supply chain with consumer green-awareness demand

The present study examines a supply chain consisting of a manufacturer and a retailer. The manufacturer produces a product with a national brand (NB) and the retailer selling both the NB product and his own premium store brand (PSB) product. The manufacturer competes with the retailer through improving the quality by using innovation over time. It is assumed that both advertising and enhanced quality play positive roles in customers’ loyalty over time for the NB product. We propose four scenarios, including: (1) Decentralized (D), (2) Centralized (C), (3) Coordination with a revenue-sharing contract (RSH), and (4) Coordination with a two-part tariff contract (TPT). A Stackelberg differential game model is developed, and parametric analyses and managerial insights are provided based on a numerical example. Our results show that: (1) Introducing a PSB product alongside selling the NB product is profitable for the retailer, (2) In Scenario D and RSH, the manufacturer tries to increase the quality gap with the PSB product through innovation, (3) Customers’ loyalty leads to higher prices, levels of innovation, quality, and advertising for the NB product, (4) The TPT contract can lead to perfect coordination and yield higher profits for the manufacturer and the retailer. Supplementary Information The online version contains supplementary material available at 10.1007/s10479-023-05372-9.

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“…All prices (i.e., and ) and demand functions (i.e., and ) are positive [similar to Li et al, 2021 ; Tao et al, 2022 )].…”

Section: The Modelmentioning

confidence: 61%

“…We used the following assumptions in the model: All prices (i.e., and ) and demand functions (i.e., and ) are positive [similar to Li et al, 2021 ; Tao et al, 2022 )]. The self-price elasticity ( and ) is greater than the cross-price elasticity ( ) [similar to (Chen et al, 2021 ; Zhao et al, 2020 )].…”

Section: The Modelmentioning

confidence: 99%

A stackelberg differential game theoretic approach for analyzing coordination strategies in a supply chain with retailer’s premium store brand

2023

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“…This study also connects to the literature on the impact of consumers' green awareness on optimal decisions. Tao et al (2022b) emphasize that consumers with high green awareness will prompt the manufacturer to strengthen green technology innovation and continuously improve the greenness of the products. When there are many online consumers in the market, it affects product greenness in the online manufacturer-offline retailer channel positively, but there is a negative impact on the online retailer-offline manufacturer situation.…”

Section: Imds 1244mentioning

confidence: 99%

“…This study also connects to the literature on the impact of consumers' green awareness on optimal decisions. Tao et al . (2022b) emphasize that consumers with high green awareness will prompt the manufacturer to strengthen green technology innovation and continuously improve the greenness of the products.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal channel selection considering price competition and information sharing under demand uncertainty

Chen,

Cai,

Kannan

et al. 2024

IMDS

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PurposeThe rapid development of the Internet has led to an increasingly significant role for E-commerce business. This study examines how the green supply chain (GSC) operates on the E-commerce online channel (resell mode and agency mode) and the traditional offline channel with information sharing under demand uncertainty.Design/methodology/approachThis study builds a multistage game model that considers the manufacturer selling green products through different channels. On the traditional offline channel, the competing retailers decide whether to share demand signals. Regarding the resale mode of E-commerce online channel, just E-tailer 1 determines whether to share information and decides the retail price. In the agency mode, the manufacturer decides the retail price directly, and E-tailer 2 sets the platform rate.FindingsThis study reveals that information accuracy is conducive to information value and profits on both channels. Interestingly, the platform fee rate in agency mode will inhibit the effect of a positive demand signal. Information sharing will cause double marginal effects, and price competition behavior will mitigate such effects. Additionally, when the platform fee rate is low, the manufacturer will select the E-commerce online channel for operation, but the retailers' profit is the highest in the traditional channel.Originality/valueThis research explores the interplay between different channel structures and information sharing in a GSC, considering price competition and demand uncertainty. Besides, we also considered what behaviors and factors will amplify or transfer the effect of double marginalization.

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“…Liu et al (2021) analyzed the implications of firms' farsighted and myopic behaviors on competitive pricing and innovation investment strategies of green products. Tao et al (2023) investigated the impact of consumer environmental awareness and the proportion of online and offline consumers on product greenness, retail prices, and profits.…”

Section: Green Productmentioning

confidence: 99%

How green advertising and power structures affect competition between green and non‐green manufacturers?

Wu,

Cao,

et al. 2024

Manage Decis Econ

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Considering scenarios with and without green advertising, we compare the optimal solutions and performance of both green and non‐green manufacturers under three power structures. Green manufacturers who invest in green advertising experience enhanced output and profits, with the highest level of green advertising and profit improvement when they dominate market. In most cases, green advertising investment tends to decrease the output and profits of non‐green manufacturers. However, under specific circumstances, such as when non‐green manufacturers dominate market and the production cost of green products exceeds a certain threshold, investing in green advertising can unexpectedly stimulate demand for non‐green products.

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Optimal channel structure for a green supply chain with consumer green-awareness demand

Cited by 21 publications

References 34 publications

A stackelberg differential game theoretic approach for analyzing coordination strategies in a supply chain with retailer’s premium store brand

A stackelberg differential game theoretic approach for analyzing coordination strategies in a supply chain with retailer’s premium store brand

Optimal channel selection considering price competition and information sharing under demand uncertainty

How green advertising and power structures affect competition between green and non‐green manufacturers?

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