Impacts Of Product Line Design On Manufacturer's Preference About Channel Structures

Currently with fierce competition increasing,many manufacturers face a question like channel reselection and integration of whether to add a new distribution channel in addition to their incumbent channel structure,or to reduce their incumbent retailing channel.Especially with the development of Internet technology which results in the popularity of online shopping among consumers,which promote manufacturers have started selling directly online platform.Previous studies mainly focused on consumers' behavioral selection or manufacturer's strategy preference in a fixed market distribution model,while little took channel selection into manufacturer's decision problem.Especially taking different product line design into consideration,whether manufacturer has differences and similarities for channel preference between premium quality product line and low quality product line.Then this dissertation will mainly research on Impacts of product line design on manufacturer's preference about channel structures.This dissertation breaks through a fixed market distribution model limit.An upstream manufacturer first considers its product line design,next analyzes relative premium quality product or relative low quality product how distribution to terminal market;one way is cooperates with professional intermediate retailers,another is establishes direct channel by manufacturer.We further from three different but correlated stages explain how manufacturer establishes and selects its own market distribution model for different quality product based on different product line design,as well how manufacturer effectively integrates and upgrades its incumbent market distribution model,to achieve its Pareto improvement in supply chain management.In upstream,whether manufacturer globally establishes its own direct channel mode(D);in midstream,intermediate retailer will compare its own indirect channel mode(R)with other independent intermediate retailers' game(RR),or with competition and cooperation of upstream manufacturer' s direct channel mode(RD);in downstream,manufacturer how to evaluate consumers' satisfaction with shopping.Furthermore,the whole dissertation from the perspective of global utility about supply chain management and local utility about consumer heterogeneity respectively discusses impacts of different channel demands on manufacturer's preference about channel selection.At the same time,this dissertation also exhibits some numerical simulations in related chapters to supplement our theoretical findings.This dissertation finds that manufacturer's preferences about channel structures under different product line design are different but correlated based on different utility function.From the perspective of aggregate representative utility function,product line design will impact on manufacturer's preference about channel structures,and the sequence of relative premium quality product line is given by RD>R>D>RR,while the sequence of relative low quality product line is RR>RD>D>R.When consumers in terminal market have indifferent preference for different channel types,manufacturer's preference about channel structures without impacts of product line design(RD>RR?D>R).When consumers in terminal market are prefer to manufacturer's direct channel,manufacturer's preference about channel structures also without impacts of product line design(RD>D>RR>R).When consumers in terminal market are prefer to intermediate retailer's indirect channel,product line design will impact on manufacturer's preference about channel structures,and the sequence of relative premium quality product line is given by RR>RD>R>D,while the sequence of relative low quality product line is RD>RR>D>R.This dissertation further point out branded manufacturers will adopt uniform pricing for their premium quality products in the process of marketing,when they only consider their own premium quality product line.Branded manufacturers at most obtain zero profit from multi-channel mode RR and single indirect channel mode R according to any one utility function,thus manufacturers only need to make a decision between hybrid mode RD and single direct channel mode D.