Complementary Product Pricing and Service Cooperation Strategy in a Dual-Channel Supply Chain

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 on...

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Bibliographic Details
Published in:Discrete dynamics in nature and society 2020, Vol.2020 (2020), p.1-22
Main Authors: Yang, Aifeng, Feng, Shuai, Liu, Jiqiong, Ren, Minglun
Format: Article
Language:English
Subjects:
Badminton
Brand loyalty
Competition
Competitive advantage
Consumers
Cooperation
Customer services
Direct marketing
Game theory
Logistics
Market shares
Marketing
Parameter sensitivity
Pricing
Product returns
Profits
Retail industry
Retail stores
Sensitivity analysis
Shopping
Supply chains
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Summary: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.
ISSN:1026-0226
1607-887X
DOI:10.1155/2020/2314659