Pricing Strategy Research In Supply Chain With Private Label

With the development of economy,the vertical competition between retailers and manufacturers turns out to be vertical and horizontal competition.The emergence and development of private label is the outcome of this change.Competing with national brands and being repeated purchased in a long-term,the private label customers are easily affected by the reference-price effect.This paper will study the pricing strategy with private label based on reference-price effect.First,we establish the static model to get the optimal pricing strategy of centralized and decentralized supply chain,and then we take sensitivity analysis of the reference price,reference-price effect factor and competitive elements,and then we get supply chain coordination with revenue sharing contract.Secondly,considering the time dimension,we establish the dynamic pricing model of decentralized supply chain,and then we get the optimal pricing strategy using optimal control theory.Last,we use numerical analysis to analyze the impact of initial reference price,the reference-price effect factor,memory effect factor,competitive elements on the profits of supply chain members and the whole.After analyzing the static pricing model with private label,the conclusions could be ed as follows:(1)National brands' reference price has a positive effect on the efficiency of manufacturers and retailers,private label's high reference price is conducive to the efficiency of the retailers;(2)While the baseline demand of private label and the similarity between national brands and private label are high,the efficiency of manufacturer would decrease,the efficiency of retailers and supply chain would increase;(3)When the reference price is less than the equilibrium price,we should reduce the reference-price effect factor to improve the efficiency of supply chain,when the reference price is greater than the equilibrium price,we should improve the reference-price effect factor;(4)Revenue-sharing contract can achieve supply chain coordination.After analyzing the dynamic pricing model we find something as follows:(1)The initial reference price of national brands has a positive effect on the efficiency of manufacturers and retailers,private label's high initial reference price is conducive to the efficiency of the retailers;(2)We taking the price-penetration strategy as the initial reference is low,we should reduce the reference-price effect factor and improve the memory effect factor;we taking the price-skimming strategy as the initial reference price is high,we should improve the reference-price effect factor and reduce the memory effect factor.