Study On Distribution Channel Choice And Endogenous Timing

With the rapid development of large retail stores such as Wal-Mart, Carrefour and Metro, the market concentration of retail industry has been improved. This agglomeration effect, which changed the relation between upstream and downstream channel by giving more market power to downstream retailers, has an important influence on product pricing, distribution channel choice and move-timing of channel members. Based on these influence, the problem of distribution channel choice of competing manufactures is studied firstly by establishing a game model of product positioning-pricing. Then, the horizontal endogenous timing of distribution channel, which consists of dominant and weak retailers, is discussed. In the end of the thesis, after pricing types of channel members are endogenized, the vertical endogenous timing of common distribution channels is studied through general demand function. The following studies are done:In Chapter2, the basic model is firstly established by introducing product positioning-pricing strategy and Nash bargaining framework, and the effects of bargaining power on product positioning, pricing and profits are studied. Then, distribution channel choice of competing manufactures is discussed under standards of profit maximization of both manufacturers and channels, and the relations among the structure of distribution channel and product differentiation, consumer surplus and social welfare are explored. At last, its impact on equilibrium results, equilibrium structures and social welfare is discussed in terms of cost difference and uncertainty of consumer preference. The study shows that an increase in manufacturer bargaining power will improve the wholesale and retail price of products as well as members profits. When manufacturer has lower bargaining power, an integrated channel will be built by it, or other retailers will be chosen on the premise that manufacturer has stronger bargaining power-which can be proved by the increasing number of exclusive shops established by appliances manufacturers in our country.Regarding the distribution channel consisting of both dominant and weak retailers, Chapter3firstly analyzes the effects of the transfer of wholesale pricing and promotion as well as the herd behavior of costumers on equilibrium results. Then, the horizontal endogenous timing is generated by adopting the extended game with observable delay. Finally, its impact on equilibrium result and horizontal endogenous timing is analyzed in terms of the difference of cost sales and store traffic. It is showed that manufacturer as well as weak retailer can share part of dominant retailer’s profits through the transfer of promotion. Meanwhile, the horizontal endogenous timing of distribution channel is dominant retailer Stackelberg, which is free from the effects of products promotion, herd behavior, consumer loyalty index, selling cost and store traffic. This conclusion is consistent with the fact that dominant retailers usually play the role of leaders in pricing in the retail market.In Chapter4, through adopting the general demand function in which marginal selling cost is assumed to be nonzero, the choice of pricing types of manufactures and retailers in common distribution channels is studied by solving the reaction functions of members under three vertical move-timings. It shows that when vertical move-timing is retailer Stackelberg or vertical Nash, retailers prefer cost plus based on wholesale price as the pricing in order to obtain more profit.In Chapter5, through the extended game with observable delay, in terms of the fact that whether retailer competition exists in the retail market, the profits of distribution channel members under three vertical move-timings are firstly compared in the stage of basic game. Then, the vertical endogenous timing of common distribution channels is discussed in the stage of preplay game. The study shows that first-or second-mover advantage of pricing may not exist. To get more profits, manufacturers and retailers have to choose the correct pricing timing on the basis of the proxy pattern and market demand characteristics of different products.