Abstract
This paper investigates a pricing game and service cooperation for complementary products in a dual-channel supply chain composed of two manufacturers and one retailer. The products of the two manufacturers are complementary products. One manufacturer sells products simultaneously through its own online channel and the traditional retailer, and the manufacturer delivers the product’s service to the retailer in its network direct sales channel by cooperating with the retailer in the form of service cost sharing. Considering the different market power structures of channel members, we establish three different pricing game models. By using the backward induction method and game theory, we obtain the corresponding analytical equilibrium solutions. Then, the service cooperation strategy of using the channel service sensitivity coefficients to construct the weight to share the service cost is proposed. Finally, numerical examples of optimal pricing strategies and profit conditions in different game situations are given, and sensitivity analysis of some key parameters is selectively performed, in which some valuable management insights are obtained.
Highlights
With the continuous development and popularization of Internet technology, increasing people are turning to online channels to purchase goods and e-commerce shopping methods are gaining popularity in the retail industry
In order to avoid this situation and encourage the traditional retailer to maintain a high level of service in a dual-channel environment, we propose a win-win strategy for the dualchannel manufacturer to achieve service cooperation with the retailer through a service cost-sharing contract
Park and Keh [28] studied the dual-channel pricing equilibrium when the demand was determined only by the price, in which the manufacturer opens up the network channel as the leader or the traditional retailer does so as the leader. ey compared the profits of supply between the dual channel and the single traditional channel, and the results showed that both the profit of the manufacturer and the overall profit of the supply chain increased in the dual channel, but the profit of the traditional retailer decreased
Summary
With the continuous development and popularization of Internet technology, increasing people are turning to online channels to purchase goods and e-commerce shopping methods are gaining popularity in the retail industry. This paper studies the pricing game and service cooperation of complementary products in a dual-channel supply chain system composed of two manufacturers and one retailer. E present paper studies the pricing and service decisions of complementary products in a dual-channel supply chain consisting of two manufacturers and one retailer. Unlike previous studies, this paper pays attention to the optimal channel pricing of each supply chain member under this setting and focuses on how to formulate a service cooperation strategy between the manufacturer that establishes an online direct sales channel and the retailer that encourages the retailer to maintain a high level of service in the presence of service free-riders. To ensure that various profit expressions perform well and have unique optimality, the following additional conditions are added in this paper:
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
