Abstract
With the rapid development of e-commerce, online retailing has become an important part of the market. In order to improve market competitiveness and increase market share, more and more retailers have opened both regular offline channel and online e-tail channel to sell products. Then how to price becomes an urgent problem for upstream manufacturers and dual-channel retailers when there is price competition between regular channel and e-tail channel, especially when consumers have peer-induced fairness concerns. However, linking consumers’ behavioral factors such as fairness concerns to pricing decisions of mixed retail and e-tail channels draws little attention in the literature on supply chain management. This paper incorporates “consumers’ peer-induced fairness concerns” (CPFC) into pricing decisions in a dyadic supply chain, where dual-channel retailer obtains products from manufacturers and then sells products to consumers through both regular channel and e-tail channel. We use game-theoretic models to analyze the equilibrium pricing strategies under the setting with “symmetry consumers’ peer-induced fairness concerns” (SCPFC) and with “asymmetry consumers’ peer-induced fairness concerns” (ACPFC), respectively. Detailed comparisons and numerical analysis are further conducted to examine the impacts of different types of CPFC on equilibrium pricing strategies and profits.
Highlights
Nowadays, more and more retailers have relied on regular channels to sell products which are obtained from manufacturers to consumers and opened e-tail channels to sell products, such as Suning, Gome, Red Star Macalline, Uniqlo, and other dual-channel retailers
Where θ denotes the indicator of consumers’ peer-induced fairness concerns” (CPFC), 0 ≤ θ ≤ 1, and the larger the value of θ, the stronger the CPFC. when consumers have asymmetry peer-induced fairness concerns, if they find that the price of regular channel is higher than that of e-tail channel, they will refuse to purchase from dual-channel retailer; at this time, the asymmetry consumers’ peer-induced fairness concerns” (ACPFC) will have a negative impact on the demand of regular channel and it is expressed as − θ(pr − min(pe, pr)), and there is no impact on the demand of e-tail channel
We consider a setting where consumers purchase decisions are affected by both their own monetary payoff and their peer-induced fairness concerns about others’ monetary payoff; we divided CPFC into two types: one is ACPFC and the other is symmetry consumers’ peer-induced fairness concerns” (SCPFC). en we unravel how such peer-induced fairness-seeking behavior interacts with supply chain member pricing decisions under a two-level supply chain including a dual-channel retailer selling products to consumers through both the regular channel and the e-tail channel
Summary
More and more retailers have relied on regular channels to sell products which are obtained from manufacturers to consumers and opened e-tail channels to sell products, such as Suning, Gome, Red Star Macalline, Uniqlo, and other dual-channel retailers. Different from research on manufacturer channel selection, Zhang et al [41] studied retailer channel selection and found that dual channel is optimal for retailer when customer acceptance rate for online channel is medium He et al [42] explored channel selection for manufacturer to sell new products and distribute remanufactured products in a dual-channel closed-loop supply chain considering government subsidy and derived manufacturer’s optimal channel structure and equilibrium decisions. Is paper investigates the impact of CPFC on pricing decisions of a dyadic supply chain comprising a manufacturer and a dualchannel retailer, where dual-channel retailer sells products through both regular channel and e-tail channel. Erefore, in this paper, considering the two types of CPFC in a dyadic supply chain consisting of a dual-channel retailer and a manufacturer, we study how manufacturer and retailer with mixed channel and e-tail channel should make pricing decisions and analyze the impact of different types of CPFC on supply chain members pricing and profits. Considering the fact that when finding the price of product in other channels of the same retailer is low, consumers will refuse to purchase from the dual-channel retailer or turn to other channels with a lower price of the dual-channel retailer to purchase product, so we divided CPFC into two types: the former one ACPFC and the latter one SCPFC, which is the focus of this paper
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