Pricing and Coordination Strategies of Dual Channels Considering Consumers’ Channel Preferences

Abstract

With the rapid development of electronic commerce, consumers can freely buy the same product from a manufacturers’ Internet channel or a resellers’ physical channel. Based on the consumers’ channel preferences, this article classifies consumers into three types and investigates the price decision in a dual-channel supply chain using a Stackelberg game, which assumes that the manufacturer, as the game leader, first sets the wholesale price, then the reseller decides the retail price, according to the wholesale price. Furthermore, some numerical experiments are developed to investigate the impact of consumer acceptance, the degree of customer loyalty, and the proportion of identical shoppers on prices and profits. The results show that whether both the retail price and the wholesale price rise or fall depends on a combination of the cost of the physical channel and the Internet shopper’s acceptance of the Internet channel. The reseller’s profit is always lower than the manufacturer’s profit. The reseller’s profit is lower and the manufacturer’s profit is higher, compared with that of a traditional single channel supply chain. The numerical experiments showed that when an Internet shopper’s acceptance of an Internet channel is lower, the wholesale price and retail price in the dual channels will increase with an increase of the degree of customer loyalty (the proportion of identical shoppers). The reseller’s profit (the manufacturer’s profit) will reduce (rise) with the augmentation of the Internet shopper’s acceptance of an Internet channel. Finally, we design a revenue-sharing contract that can coordinate the supply chain and implement a win–win strategy for all partners. This work makes some contributions to the research area of coordination in dual-channel supply chains.

Efficient Strategic Pricing in a Dual-Channel Stackelberg Supply Chain: Incorporating Remanufacturing and Sales Commissions across Multiple Periods

“…Also, the manufacturer bore the collection cost of used products. In addition, the collection cost of used products for each period t was considered in this work to be (B•τ(t) 2 )/2, where B is a scaling parameter [18,20,33]. Nevertheless, this work considered new products entirely manufactured from transforming raw materials and new products containing remanufactured subcomponents identical.…”

“…scaling parameter [18,20,33]. Nevertheless, this work considered new products entirely manufactured from transforming raw materials and new products containing remanufactured subcomponents identical.…”

“…Thus, the pricing problem in a dual-channel supply chain has been studied under different configurations [18,20,28,29], remanufacturing effort [18,28,30], after-sales services [19,20], carbon tax policy [30], extended warranty [31], competing supply chains [32], etc. Also, other papers have formulated the pricing problem for dual-channel supply chains basing on Stackelberg's game theory [18,28,31,33], enabling the entity with more market power to make the first decisions as a leader [28], while the other members are considered followers and act in accordance with the leader's decisions. Nevertheless, the aforementioned studies only examine mono-periodic pricing and remanufacturing decisions for dual-channel supply chains, and this is considered a gap between the literature and practice.…”

Research on Multi-Channel Supply Chain Decisions Considering Carbon Emission Cost and Consumer Loyalty

“…Zhou et al [36] set up a manufacturer-led DCSC to study the pricing problem under information asymmetry. Wang et al [37] studied DCSC pricing and coordination strategies when consumers have certain channel preferences. Li et al [38] included a consideration of the four-channel refund issue in their study of pricing strategies, and in another study, Li et al [48] considered the market shares for different channels and studied the impact of the showrooming effect on pricing and service.…”

“…The gap between market demand and objective reality has sparked our research interest in consumer low-carbon preferences and carbon reduction issues, while the uncertainty between the varying findings in the existing literature has drawn our attention to the impact of the online direct channel and channel preferences on the SC. In current academic research, many scholars have conducted systematic research on dual-channel supply chains (DCSC) [35][36][37][38], low-carbon dual-channel supply chains [39][40][41], and multi-channel supply chains (MCSC) [42][43][44]. However, no research has yet been conducted to combine MCSC with carbon emission costs and consumer loyalty in low-carbon issues with the leading manufacturer, so it is necessary to fill the research gap and expand the current theoretical findings in the field of SCM research so as to provide a reference basis for enterprises' decisions under the current global greening trend.…”