Supply Chain Decisions Considering Heterogeneous Consumer Greenness Preference and Reservation Utilities

Abstract

This article focuses on how the prices set by supply chains and the product greenness level changes when there exists a difference for consumers in both their greenness preference and their reservation utility for the common product with minimal greenness, based on a two-dimensional model which is built and the market is partitioned into four groups. In this study, the authors use the Stackelberg game model to analyze the decisions of a two-stage supply chain, providing environmentally friendly products affected by a consumer greenness preference which is represented by the willingness-to-pay (WTP) for product greenness. The authors found that manufacturers may lower the product greenness level with the decrease of the valuation of consumer's WTP for product greenness, but he may prefer keeping the same product greenness, he will even improve it, when there is a reduction in reservation utility for the traditional product. Moreover, this article shows that there is different impact for different combinations of both WTP for product greenness and product greenness level (different market segmentations) on price decisions of the manufacturer and retailer. In consideration of the asymmetric information about consumer's utility and willingness to pay between manufacturer and retailer, the authors introduce the bargaining power into the study, and then they conclude that during the different market segmentations, the wholesale price and retail price go down as a retailer strengthens his bargaining power, and increasing sales volume can improve profit to make up for a loss in retail price.

Optimal Financing Strategy in a Capital-Constrained Supply Chain with Retailer Green Marketing Efforts

“…In the GSC, the change rules of the key decision variables such as the optimal wholesale price, the optimal retail price, and the optimal green marketing effort level (when the capitalconstrained retailers adopt the two financing modes such as trade credit and bank loan) are analyzed. Therefore, we adopted the Stackelberg game model, which is often used to study such dynamic issues as employed and recommended by [20][21][22][23][24]. Moreover, SC's profit distribution was also analyzed in this study to fill the existing research gap.…”

Decision and Coordination of an O2O Supply Chain With Market Segmentation and Showrooming Effect

“…The influence of offline showrooms on the online and offline demands of consumers and the decisionmaking of supply chain members had been paid attention (Moorthy et al, 2018;Zhang and Wang, 2019). Fernández et al (2018) found find that webroomers emerge as individuals who engage in a prolonged purchasing process over time.…”

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

“…Luo and Sun [31] examined how a manufacturer might use product design to influence the retailer's outlet designation decision in a dual-channel supply chain, in which consumer heterogeneity was considered. Zhang and Wang [32] focused on the pricing and the level of product greenness in a supply chain where the consumers had different greenness preferences. Without a loss of generality, we adopt similar assumptions to Chiang et al [8] and Hsiao and Chen [3], in which the total market size is constant, the consumers' value follows a uniform distribution, and the demand functions are induced.…”