The Dual Channel Environments Manufacturer Product Pricing And Service Decision-making

With the popularity of the Internet and the rapid development of e-commerce, more and more manufacturers are introducing online channel to sell their products directly, so that enterprises can seize the opportunities in the future market competition. However, the traditional enterprises which have focused on offline business will face many difficulties when they introduce online channel. On the one hand, empirical studies have shown that service quality has become an important factor influencing consumer acceptance of the online shopping. However, there are some differences between online channel and traditional channel. The manufacturers may pay a high cost in order to provide high quality service. How to balance the relationship between service and cost is a stressed problem need to be considered. On the other hand, the online direct channel which be introduced by manufacturer will compete with the traditional channel, leading to channel conflict. Therefore, how to coordinate online channel and traditional through reasonable pricing strategy has become an important problem of manufacturers when they open up online channel.In response to these two questions, we build a dual-channel pricing model based on game theory and combine of numerical analysis of our model, to study manufacturer's pricing and service strategy in dual-channel supply chain. We get some valuable conclusions eventually.First, we consider manufacturer's service decisions emphatically. We introduce "inconvenient cost "measuring service quality of online channel, and examine the optimal decisions of inconvenient cost and prices in a centralized and a decentralized dual-channel supply chain using the two-stage optimization technique based on Stackelberg Game and Nash Game. We analyze the impacts of inconvenient cost and consumer preference of online channel on the manufacturer's and retailer's pricing behaviors, and the impacts of consumer preference of the online channel on inconvenient cost, pricing decisions and profits. We analytically show that inconvenient cost strongly influences the manufacturer's and the retailer's pricing strategies. Numerical studies reveal that the difference between the price and service sensitivity of consumers, and consumer preference of the online channel have great effects on the service, pricing decisions and profits.Second, we introduce equal-pricing strategy in order to mitigate channel conflict. We examine the optimal decisions and profits of manufacturer and retailer. We compare the equal-pricing strategy with unequal-pricing strategy through numerical analysis of our model, and analyze the impacts of consumer preference of online channel and wholesale price on the choice between the two pricing strategies of manufacturer. Numerical studies reveal that the equal-pricing is beneficial to retailers when consumer preference of the online channel is not high. The unequal-pricing strategy is better than equal-pricing for manufacturer and supply chain in most cases, while the equal-pricing strategy makes manufacturer and supply chain loss less profits when consumer preference of the online channel is moderate. The manufacturer prefers to choose equal-pricing strategy when its pricing power is small.