The impact of consumer behavior on preannounced pricing for a dual‐channel supply chain

Qian, Lei; He, Jiangbiao; Ma, Chao; Jin, Ziliang

doi:10.1111/itor.12786

Cited by 23 publications

(16 citation statements)

References 33 publications

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“…Our paper has some contributions to the literature. The topic is relatively similar to the research of Yin et al [44] and Lei et al [18]. Yin et al [44] examined a two-period dual-channel supply chain model where the manufacturer adopts two wholesale pricing strategies to sell its product via one retailer or two distinct retailers in two periods in the presence of strategic consumers.…”

Section: Literature Reviewmentioning

confidence: 99%

Markdown pricing strategy under a dual-channel supply chain with strategic consumers

Yang

Leung

et al. 2022

RAIRO-Oper. Res.

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This study investigates the markdown pricing strategies for a manufacturer and a retailer in a twoperiod dual-channel supply chain, where the manufacturer sells its products via its own direct channel and an independent retail channel to strategic consumers who may wait for markdowns. A two-period game is developed to systematically study the optimal regular prices and markdown prices under four cases, i.e., no markdown in both channels, markdown only in the direct channel, markdown only in the retail channel, and markdowns in both channels. By comparing the different cases, we find that the manufacturer benefits most from the case with markdowns in both channels, where the markdown rate of the retail channel is lower than that of the direct channel. On the other hand, the results indicate that the retailer may also profit most from the case with markdowns in both channels when the consumer acceptance of the direct channel is sufficiently high; otherwise, the retailer enjoys the highest profit under the case with markdown only in the retail channel. Finally, it is found that strategic consumer behavior has a positive impact on the retailer’s profit but a negative impact on the manufacturer’s profit.

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Section: Literature Reviewmentioning

confidence: 99%

Markdown pricing strategy under a dual-channel supply chain with strategic consumers

Yang

Leung

et al. 2022

RAIRO-Oper. Res.

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“…The net utilities of the consumer who purchases the 1P and 3P products are

u_{r} = θ_{r} v - p_{r}

and

u_{s} = θ_{s} v - p_{s}

, respectively. Here,

θ_{i} false(i = {r, s} false)

represents consumers' channel preferences or the WTP for the product, v is the product valuation for consumers (assumed to follow the uniform distribution U [0, 1]; Eghbali‐Zarch et al., 2019; Jiang et al., 2020; Lei et al., 2020), and

p_{r}

(p_{s})

is the price of the 1P (3P) product. Following Mantin et al.…”

Section: Model Fundamentalsmentioning

confidence: 99%

The bright side of third‐party marketplaces in retailing

Zheng

2021

Int Trans Operational Res

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A prevalent practice for retailers is to provide a marketplace for third‐party sellers (3P sellers) to sell products directly to consumers, charging the sellers a commission fee. This study investigates the downstream retailer's optimal strategy to introduce a 3P seller who sells a substitutable product. We develop a game‐theoretic model, through which our first result shows that the retailer introduces a 3P seller only when the marginal costs of the products are in a medium range. Second, the retailer's strategy of introducing a 3P seller may benefit the manufacturer, even though the introduction creates downstream competition that may reduce the sales of the manufacturer's product. This happens because the strategy of introducing a 3P seller can mitigate the double marginalization between the manufacturer and retailer. In contrast to the conventional wisdom that introducing a 3P seller always results in a “win–lose” outcome for the retailer and manufacturer, we derive evidence that introducing a 3P seller can lead to a “win‐win” outcome for the retailer and manufacturer and thus improve the channel performance. Lastly, we find that the retailer's 3P seller introduction strategy can also improve the consumer surplus because this strategy increases competition.

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“…The third stream of literature has focused on optimal decisions in dual‐channel supply chains. Much of this work has concerned with pricing decisions in dual‐channel supply chains (Li et al., 2016b; Yan et al., 2018; Zhou et al., 2018a; Li et al., 2019; Pi et al., 2019; Lei et al., 2020; Zhang et al., 2020b). For example, Li et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing decisions with different time sequences in a cross‐border dual‐channel supply chain

Xue

2021

Int Trans Operational Res

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This paper investigates pricing decisions with different time sequences in a cross‐border dual‐channel supply chain, in which the manufacturer produces products in country A and sells them to country B via a retail channel and an online channel. Meanwhile, we design three scenarios, the manufacturer‐led earlier scenario, the manufacturer‐led later scenario, and the retailer‐led scenario, to analyze the effects of time sequences when the manufacturer is risk neutral or risk averse. Through modeling and analysis, it is concluded that whether the manufacturer is risk averse or not, the manufacturer prefers the manufacturer‐led earlier scenario and the retailer's preference is the retailer‐led scenario. That is, when considering the time sequences, the players are encouraged to make all decisions in the first stage. Moreover, this paper analyzes the effects of the exchange rate and delivery lead time on the players’ pricing decisions. The theoretical and numerical analyses also show that the effects of an increasing exchange rate on the profits of the manufacturer and retailer are associated with the cost of the online channel. Additionally, while reducing the delivery lead time can attract customers, a moderate delivery lead time is more advantageous for the manufacturer. Finally, we further verify the robustness of the impacts of time sequences when the manufacturer is risk averse. Interestingly, if the cost of the online channel is higher, then the risk‐averse behavior benefits the retailer.

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The impact of consumer behavior on preannounced pricing for a dual‐channel supply chain

Cited by 23 publications

References 33 publications

Markdown pricing strategy under a dual-channel supply chain with strategic consumers

Markdown pricing strategy under a dual-channel supply chain with strategic consumers

The bright side of third‐party marketplaces in retailing

Pricing decisions with different time sequences in a cross‐border dual‐channel supply chain

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