Research On Supply Chain Pricing And Channel Strategy Under Retailer Brand Competition

In the market,retailers can directly contact consumers,fully grasp the market vane,and have the ability to introduce store brands to compete with manufacturers’ brands.However,the introduction and sale of store brands by retailers will break the monopoly position of manufacturers’ branded products in a certain segment of the end market,change the existing supply chain specialization system,and make competition and cooperation games a new normal in supply chain relations.From the perspective of manufacturers,timely and reasonable measures to respond to the introduction of store brands by retailers and reduce dependence on retailers have become difficult issues that need to be addressed.Therefore,the research on supply chain pricing strategies and manufacturers’ channel strategies under retailer brand competition has great theoretical and practical value.This article constructs two-echelon supply chain consisting of a manufacturer and a retailer,explores supply chain pricing strategies under retailer brand competition,and further explores the changes in manufacturer channel strategies caused by retailer brand competition.The research is mainly divided into two aspects: On the one hand,it is common for managers to overestimate the market size of their own brands for supply chain pricing strategies under retailer brand competition.Considering that managers have two types of market size for their own brands: fully rational and overconfident,analyze the differences in pricing strategies under overconfidence,and compare the differences between actual profits under overconfidence and profits under fully rational conditions.On the other hand,in order to explore channel strategies under retailer brand competition,a competition and cooperation game model under brand competition and channel invasion is established,and the occurrence conditions and influencing factors of manufacturer channel invasion under retailer brand and manufacturer brand competition are deeply studied.The research results show that:(1)considering only the overconfidence of retailers in the market size of their brands,as the degree of overconfidence of retailers increases,the terminal retail prices of their own brands increase,while the terminal retail prices of manufacturers’ brands decrease;When only considering manufacturers’ overconfidence in the market size of their brands,as manufacturers’ overconfidence increases,the terminal retail prices of manufacturers’ brands increase,while the terminal retail prices of retailers’ store brands remain unchanged.Overconfidence by managers can overestimate their own actual profits and underestimate the actual profits of competitors.When both parties are overconfident,at least one party’s true profit decreases.(2)Under retailer brand competition,channel invasion is not necessarily the optimal strategy for manufacturers.Specifically,when manufacturers and retailers have production cost advantages and sales cost advantages respectively,manufacturers can only open direct sales channels when sales costs fall below a certain threshold.The threshold for manufacturers to invade the terminal market when retailers introduce brands is always higher than the threshold for retailers to invade the terminal market without introducing their own brands.Although manufacturer invasion can trigger channel competition,opening up direct sales channels by manufacturers may lead to a win-win outcome for both manufacturers and retailers when retailers have their own brands.Numerical studies have shown that higher brand substitutability reduces retailers’ enthusiasm for introducing new brands.Contrary to intuition,when retailers introduce store brands,higher brand substitutability does not necessarily increase manufacturers’ enthusiasm for their own brand invasion.When consumers have a higher degree of preference for retailer brands,retailers have a higher enthusiasm for introducing their brands,while manufacturers have a lower enthusiasm for opening direct sales channels.