Pricing And Market Entry Strategy Of Contract Manufacturers Considering Consumer Brand Preference

With the development of economic level and the gradual decline of demographic dividend,the low-cost advantage of contract manufacturers is gradually weakening,and the current price competition among contract manufacturers makes the situation faced by contract manufacturers worse.At present,consumers’ brand preference for products is becoming the main influencing factor for consumers to buy products,which poses new challenges to whether contract manufacturers should enter the market and what pricing strategy should be adopted.Therefore,considering the pricing strategy that contract manufacturers do not enter the market under the good consumer brand,whether contract manufacturers should enter the market strategy of low-end brand products,and the impact of price competition of competitive contract manufacturers on contract manufacturers’ strategy have become the main research questions of this paper.Based on the above situation,this paper uses the research methods of supply chain management theory,game theory and numerical simulation to divide the downstream market into high-end brand product market and low-end brand product market according to consumers’ brand preference.Under the secondary supply chain system composed of a contract manufacturer,a competitive contract manufacturer and an original equipment manufacturer,The pricing strategy model and market entry strategy model of contract manufacturers are constructed respectively.Through model analysis and numerical simulation,the pricing strategy of contract manufacturers and whether they should enter the market strategy of low-end brand products are obtained.Finally,the effectiveness of the model is further verified by an actual case,which provides a decision-making basis for the contract manufacturer’s pricing strategy and market entry strategy.The main conclusions are as follows:(1)When the contract manufacturer does not enter the market,when the consumer’s brand preference for high-end products meets the contract manufacturer’s choice of different pricing strategies,the contract manufacturer should choose the pricing strategy of different wholesale prices for different brand products to maximize its profits.Only when consumers’ brand preference for high-end products meets certain conditions,OEMs will choose to support the pricing strategy of contract manufacturers considering their own profit maximization.The pricing strategy of contract manufacturers choosing different wholesale prices for different products can not maximize the overall profit of the supply chain.(2)Considering the wholesale price competition set by the competitive contract manufacturer,the contract manufacturer has to adopt the same wholesale price pricing strategy as the competitive contract manufacturer in order to ensure that the orders of the original equipment manufacturer are not lost.At this time,the pricing strategy selected by the contract manufacturer is fully supported by the original equipment manufacturer.(3)When the consumer’s brand preference for high-end products meets the market entry of the contract manufacturer,the contract manufacturer will choose to enter the market on the premise of maximum profit.In this case,when the equilibrium wholesale price determined by the contract manufacturer is less than the fixed wholesale price of the competitive contract manufacturer,and the consumer’s brand preference for high-end products is large,OEMs will support the market entry of contract manufacturers on the premise of maximizing their own profits,and the overall profits of the supply chain will also be the highest.When the equilibrium wholesale price determined by the contract manufacturer is greater than the fixed wholesale price of the competitive contract manufacturer,the market entry of the contract manufacturer will always be hindered by the original equipment manufacturer,and the market entry of the contract manufacturer will also improve the overall profit of the supply chain when consumers have a greater preference for the brand of high-end brand products.(4)When the wholesale price of competitive contract manufacturers is less than the wholesale price decided by contract manufacturers,competitive contract manufacturers will hinder the pricing and market entry strategies of contract manufacturers and reduce the profits of contract manufacturers.From the perspective of contract manufacturers,considering the brand preference of consumers and the price competition of contract manufacturers,this paper enriches the relevant research in the field of contract manufacturers’ pricing and market entry,and provides reasonable suggestions for contract manufacturers to make correct wholesale price pricing strategy and whether to enter the market strategy,which is conducive to the long-term development of contract manufacturers.