A Study Of The Impact Of Different Gray Market On Pricing Decision And Channel Selection Strategy Of Dominant Retailer

With the rapid development of mobile e-commerce and cross-border logistics technology,the gray market has emerged and developed globally.On the one hand,the rise and growth of the gray market has stimulated potential demand to expand the sales scope of manufacturers and retailers,and on the other hand,it has also brought huge challenges to the upstream and downstream participating companies in the supply chain.Therefore,in the face of the impact of the gray market,How to formulate price strategies and how to choose channels have become the problems faced by enterprises.Therefore,this paper explores the impact of different gray markets on the pricing decision and channel selection strategy of strong retailer.Firstly,it studies the influence of different gray markets on the pricing decision of strong retailer,and analyzes the influence of the emerging gray markets under different channel structures on manufacturers and retailers in the supply chain.On the basis of no gray market model,a local gray market model,a transnational gray market model and a dual-channel gray market model are established respectively.The study found that manufacturers and retailers’ prices are positively correlated with consumer brand loyalty,so both manufacturers and retailers should focus on improving brand loyalty.When retailers choose the local gray market,the more attractive the gray market product is to consumers,the higher the wholesale price and profit of the manufacturer,and the higher the price of the product of the retailer in the market.When the service cost is relatively low,the more popular the gray market product is,the lower the retailer’s profit;when the service cost is higher,the higher the consumer’s evaluation of the gray market product is,the higher the retailer’s profit is.When there is a transnational gray market,the manufacturer’s income is lower due to the increase of customer service costs,while the retailer’s income first declines and then gradually rises.When there is a dual-channel gray market in the supply chain,if consumers like gray products,retailers will choose a high price strategy,while manufacturers will choose a low price strategy.Secondly,it studies the channel selection strategy of strong retailer under the background of gray market,summarizes the industry characteristics of gray market trade,and discusses the local gray market model,transnational gray market model and dual-channel gray market model of strong retailers when service costs are different.The study found that most of the industries in which gray market trade is prosperous are areas where the cost of products and services is high,consumers are less concerned about sales and services,and consumers have high brand loyalty.When service costs are high,multinational gray markets are the best choice for retailers.When the cost of service is moderate,the local grey market is the best option for retailers.When the service cost is small,the dual-channel gray market is the optimal choice for retailers.In other cases,the conditions for retailers to engage in grey market speculation do not exist.Finally,the dual-retailer model-different gray market influences the pricing decisions of strong retailers.The study found that when there are two retailers,the retailer’s strong position is more obvious.Compared with the single-retailer model,under the dual-retailer-local gray market model,the increase in the price of formal channel products in market 2 reduces the demand for products.Under the dual-retailer-transnational gray market model,the profit margins of the dominant retailers in market 1 increase in both the formal channel and the gray channel,and the price of the gray market product also increases.Under the dual-retailer-dual-channel gray market model,the manufacturer’s wholesale price in market 1 decreases,the retailer’s marginal revenue in market 1 increases,and the price of formal and gray channel products increases in both markets 1 and 2.Under the dual-retailer model,the leading retailer in the supply chain sees increased revenue,while the manufacturer’s profit tends to decrease.