Product Pricing And Customer Returns Policy Under Different Supply Chain Structures Considering Competition

The development of economy and the improvement of science and technology create two kinds of channel structures to coexist with the traditional supply chain structure in the market.That is,many retailers are beginning to introduce the store brand to compete with national brand manufacturers,and in the meantime,many manufacturers are beginning to open the direct channel to compete with specialty retailers.Product pricing and customer service are among the most important marketing strategies for sellers to stay competitive in the market,and have received considerable attention in both academic studies and industry.However,as diversification and personalization of customer demand become increasingly prominent in recent years,many issues that are related to the characteristic of channel structure arise in the areas of product pricing and customer service,and are calling to be resolved.Therefore,based on game theory,customer utility theory,and related theories on supply chain management,this dissertation focuses on the retailer-leading supply chain with the brand competition and the manufacturer-leading supply chain with the channel competition,and develops mathematical models to examine the pricing and customer returns polices of supply chain members.The main innovation points and research results of this dissertation are summarized as follows:First,Chapter 3 considers a dominant retailer who can produce and sell the store brand products by integrating backward with its either low-or high-quality manufacturer.Chapter 3 develops retailer Stackelberg game models to examine the conditions under which the retailer should backward integrate with the manufacturer to produce store brand product,the quality positioning of store brand product,and the effects of backward integration on the price and quality competitions between the two brands.The results show that when the qualities of the two brands are exogenous,and if the setup costs of integration are ignored,although integration intensifies the price competition between two brands,the retailer always prefers integrating backward with the manufacturer with the higher efficiency to produce the store brand.When qualities are endogenous,the retailer is always better off when it integrates with the low-quality manufacturer to produce the store brand,if the setup costs of integration are ignored.As a consequence,both brands improve the quality of their products,and the price competition between the brands is softened.This finding suggests that the retailer should offer the low-quality store brands in the market,but needs to improve the quality of store brands to compete with national brands.Second,Chapter 4 introduces customer returns into a retailer-leading supply chain with the brand competition.Based on the results in Chapter 3,Chapter 4 considers a dominant retailer who sells a product in two brands: a low-quality store brand produced by its integrated manufacturer and a national brand supplied by an independent manufacturer.Chapter 4 develops retailer Stackelberg game models to examine the retailer's decisions on pricing and customer returns policies for the two brands(either Money-Back Guarantee(MBG)or no refund)and the effects of returns policies on the price competition between the two brands.The research identifies the conditions under which the two brands can co-exist in the market and the retailer should offer MBGs for both brands.The results show that if the net salvage value of the returned product is positive,MBGs are dominant policies for both brands.MBGs can mitigate price competition between the two brands and enhance the retailer's profit,but will reduce the national brand manufacturer's profit.This result suggests that the retailer should implement the same returns policy for both the store brand and national brand products in the market,even when store brand products face a lower customer satisfaction rate.Chapter 4 further examines coordination mechanisms of the supply chain to achieve a win-win for both the retailer and the national brand manufacturer.An easy-to-implement coordination mechanism with three parameters(retail price for sotre brand,marginal profit for selling national brand,and profit share for the national brand manufacturer)is proposed.This coordination mechanism ensures the win-win for the retailer and the national brand manufacturer,and includes all possible cases for the retailer,when it has sales of both brands and when it has sales of only either the store brand or the national brand.Finally,Chapter 5 introduces customer returns and personalized pricing(PP)into a manufacturer's dual-channel supply chain.In the supply chain,the dominant manufacturer sells a high-quality product through an independent retailer,and needs to decide whether or not to open a direct channel to sell a similar but lower-quality product.Chapter 5 develops manufacturer Stackelberg game models to discuss how the retailer and the manufacturer with a direct channel should choose their customer returns policies(either MBG or no refund)and pricing policies(either PP or uniform pricing).The results show that when the retailer implements a PP policy,the addition of the direct channel benefits the manufacturer but always makes the retailer worse off,and this differs from the case when the retailer adopts a uniform pricing policy.If its net salvage value of the returned product is positive,the retailer should offer an MBG and implement PP policy.In the direct channel,however,the manufacturer may offer an MBG even if the net salvage value is negative,and may implement PP policy only if customer satisfaction in the direct channel is low.Under certain conditions,a win-win may result from both the retailer's adoption of MBG and PP and the manufacturer's adoption of MBG in its direct channel,while the adoption of PP by the manufacturer in its direct channel may lead to lose-lose for the retailer and the manufacturer.