Abstract
Pricing and promotion are two important decisions during the market launch of new consumer electronics products. Nowadays, the pricing and promotion of consumer electronic products are often not made separately but at the same time. This study focuses on the pricing-promotion coordination mechanism of a secondary supply chain of new consumer electronics products (which consists of a manufacturer and a seller). Price and the degree of promotion together affect the demand for products. Manufacturers give sellers a sales target. Manufacturers and sellers set prices and promotions separately, introduce repurchase penalty joint contracts, and establish supply chain profit models to compare and analyze optimal pricing, promotion efforts, and maximum profit of supply chains under different decision-making situations. We prove that the repurchase penalty joint contract can coordinate the supply chain under the assumptions of a single-period game and a multiperiod repeated game. The results show that under the repurchase penalty joint contract, when manufacturers and sellers choose high prices and high promotions at the same time, the supply chain of new consumer electronics products has the largest profit. Finally, numerical experiments are conducted to study the influence of parameters on optimal decision-making and supply chain profits.
Highlights
China is the world’s largest consumer, producer, and exporter of consumer electronic products
China’s consumer electronics industry is struggling to survive under the dual squeeze of fierce competition in the domestic market and constant external Sino-US trade frictions. erefore, designing an effective pricing and promotion coordination mechanism in the early stage of the advent of new consumer electronics products can effectively reduce the impact of Sino-US trade frictions and enable new consumer electronics products to increase revenue steadily, which is of great significance to upstream and downstream enterprises in the supply chain
In the early stage of new consumer electronics products entering the market, this study proves that the repurchase penalty joint contract can effectively coordinate the secondary supply chain and proposes the optimal pricingpromotion strategy of the supply chain manufacturer-seller
Summary
China is the world’s largest consumer, producer, and exporter of consumer electronic products. Erefore, designing an effective pricing and promotion coordination mechanism in the early stage of the advent of new consumer electronics products can effectively reduce the impact of Sino-US trade frictions and enable new consumer electronics products to increase revenue steadily, which is of great significance to upstream and downstream enterprises in the supply chain. Under the premise that there is no substantial breakthrough in new consumer electronics technology, some effective promotions that do not affect the selling price have a great impact on the demand for new products, such as the hunger marketing strategies of Apple and Xiaomi and various advertising of consumer electronics manufacturers. In the early stage of new consumer electronics products entering the market, this study proves that the repurchase penalty joint contract can effectively coordinate the secondary supply chain and proposes the optimal pricingpromotion strategy of the supply chain manufacturer-seller. E remaining content of the article is arranged as follows: Section 2 describes the problem and establishes basic models under different propositions and obtains the optimal price and optimal promotion degree in different situations. ird section presents the empirical analysis of the study, and fourth section further analyzes the influence of parameters on decision-making and the overall profit of the supply chain through numerical experiments. e last section concludes the study and presents future research directions
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