Promotional Strategies And Platform Sales Formats Of Brand Firm Under Different Channel Structures

With increasingly fierce market competition and acceleration of product replacement,the inventory backlog of brand firms has become prominent.The demand for inventory removal on the supply side is urgent.Promotion,as one of the most flexible and effective means of marketing stimulation,plays a crucial role in the de-stocking of brands.Its wide application has given rise to three kinds of promotional channels: direct channel,retail channel,and online promotional platform(such as Vipshop,v.dangdang.com,or Yoox.com).The diversified development of promotional channels makes it possible for multi-channel coexistence promotion,which derives a variety of channel structures.Under the increasingly diversified channel structures,effective promotional strategies,such as the use of price promotional tools(e.g.,instant discount and gift card),the flexible selection of sales formats regarding online promotional platforms,and the strategic pricing behaviors,can expand product sales and bring opportunities for the development of brand firms.However,due to the complex influencing factors such as pricing timing between promotional channels,channel competition,asymmetrical demand information of the third-party channels,and consumer behaviors,promotional strategy formulation is more complicated than before,which brings unprecedented challenges to brand firms.Therefore,this thesis takes brand firms as the core,builds a supply chain model based on the background of different promotional channel structures,and explores the influence of intricate factors on brand firms’ choices of promotional strategies.The specific research content is as follows:First,this thesis explores the selection of the promotional tools between instant discount and gift card,when a brand firm distributes product through a retail channel while opening up the direct channel to sell the product directly.Based on fully and partially covered markets,the impacts of consumers’ price illusion and delay discount effects on the brand firm’s and the retailer’s(firms’)selections of promotional tools are considered.A Nash game model of the firms is built,and the game is solved by backward induction.Results show that in a fully covered market under consumers’ price illusion effect stronger than delay discounting effect,despite the competition,any firm using price promotional tools will hurt the profitability;otherwise,only the retailer’s instant discount promotion could benefit both firms.By contrast,in a partially covered market,firms are necessarily beneficial from price promotion,wherein they prefer gift card as the marked price of the product and the price illusion effect of the consumers increase.Furthermore,prisoner’s dilemma areas for two firms and “win–win–win”situations for two firms and consumers are illustrated.Second,this thesis considers the impacts of promotional pricing timing and uncertain demand on a brand firm’s sales format selections and pricing decisions,when the brand firm introduces an online promotional channel as a supplement to the traditional channel in the end-of-season product promotion.A multi-stage decision-making model for the brand firm is built.The backward induction method is used to solve the problem.Results show that the promotional pricing timing has no effect on the firm’s price decisions under the agency selling format,whereas it might lead to downward prices under the reselling format—even lower than those under the agency selling format.Besides,considering promotional pricing timing in an uncertain market fundamentally changes the general intuition that the firm typically prefers agency selling to reselling format due to the double-marginalization effect.Specifically,the reselling format might be more profitable for the firm when it sets traditional-channel promotional price prior to introducing the online promotional channel in an optimistic market(i.e.,a market more likely with high demand)or adopts the opposite promotional pricing timing of channels in a pessimistic market(i.e.,more likely with low demand).Third,this thesis considers that a brand firm sells its end-of-season product through monopolistic or duopolistic online channels.The influences of channel competition on the choice of reselling and agency selling formats,and on price decisions are investigated.In each sales format,the brand firm’s multi-stage decision-making model is built and the backward induction method is used to solve the problem.Results show that the agency selling model might lead to a higher price than the reselling model.Furthermore,without retail competition,there exists a “win-win” promotional strategy,which occurs when the e-tailer is in the reselling model under a moderate inventory level or in the agency selling model with a moderate platform fee under a high inventory level.However,under conditions of competitive e-tailers,both e-tailers being in the reselling model is no longer a “win-win” promotional strategy,while the hybrid selling model,i.e.,one in the reselling model and the other in the agency selling model,can generate a Pareto improvement.In addition,low platform fees,customers’ high price sensitivities,increased selling costs,or decreased competitive intensities will drive the brand firm to seek direct pricing power in the agency selling model.Finally,this thesis investigates a brand firm’s channel selection among self-operated,online-platform,and offline-outlet promotional channels for the end-of-season product promotion.The impacts of the retailer’s or the online platform’s asymmetric demand information and inventory quantity on the channel selection and promotional quantity allocation are elaborated.Results show that the brand firm’s preferences shift from selfoperated promotion to offline-outlet promotion and then to online-platform promotion as inventory quantity increases.And decreases in promotional prices make the brand firm more willing to adopt self-operated or online-platform promotion but less willing to adopt offline-outlet promotion.Additionally,the promotional quantity allocated to the low-type third party under online-platform promotion and offline-outlet promotion has opposite distortion to reduce the high-type third party’s disguised motivation and the information rent.