Optimal Decision For A Dual-channel Supply Chain With Consumers' Low-price Preference

Recently,many manufacturers have adopted the dual-channel supply chain as the main sales mode.The strategic behavior of pursuing low price is more and more significant when consumers buy products in the dual-channel supply chain.On the one hand,the behavior is reflected in waiting low prices in the promotion period.Some consumers are price-sensitive and willing to buy at low prices in promotion activities.Nowadays,promotional activities are very common.For example,Double 11 acts as a classical example of online promotion,Black Friday is a classical example of offline promotion,and Spring Festival plays a role in online and offline promotions.The sale volumes in Doule 11,Black Friday,and Spring Festival are all increasing every year.On the other hand,the consumer's low-price preference is also reflected in freely experiencing products in the retail channel while buying products for low prices in the direct channel,which is called showrooming.Because of low selling cost in the direct channel,the prices in the direct channel always is lower than prices in the retail channel.Based on the waiting for promotional price and showrooming behavior in the dual-channel supply chain,the optimal pricing for the manufacturer and the retailer is studied,the influence of consumer strategic behavior on the firms in the dual-channel supply chain is also investigated.At the first,this study discusses a dual-channel supply chain in which a manufacturer sells a regular-priced product through dual channels in the normal sales period and sells overstocked products only through the direct channel in the discounted sales period in the presence of strategic consumers.From strategic consumers' waiting behaviour perspective,pricing problem of two-period and dual-channel supply chain is discussed,where the manufacturer acts as a Stackelberg leader to adopt preannounced pricing policy.Then,sensitivity analyses on optimal profits of manufacturer and retailer are conducted by applying numerical examples,besides,the manufacturer's profit and the retailer's profit in the two-period model and singleperiod model are compared.Results show that improving the acceptance of direct channel or the degree of patience is beneficial to the manufacturer,while it is opposite for the retailer.However,extending the delivery lead time would decrease the manufactuer's profit and increase the retailer's profit.In addition,there exists Pareto zone under a certain condition,where both manufacturer and retailer in our setting outperform their counterparts in the singleperiod dual-channel model in terms of profit.Expect for the above-mentioned online promotion,there exists other different sale models,such as offline promotions,both online and offline promotions.Considering the acceptance of online channel and the degree of patience,optimal sales volume strategies for both online retailer and offline retailer are established in four channel structures(i.e.,no-promotions,online promotions,offline promotions,and online-and-offline promotions),where nopromotion acts as benchmark.Then,sensitivity analyses on optimal strategies are conducted,optimal channel structure are explored confronting different types of consumers.It is found that the results indicate that despite improved consumer patience,all promotional prices do not fall as expected.When sales channels are provided by online retailers rather than offline retailers during the promotion period,offline retailers can achieve higher profits.We also find that in most cases,an online-and-offline model in a single-period is more beneficial to both online and offline retailers than a dual-channel model in two periods.Showrooming,i.e.,experiencing products in the retail channel and switching to buy products online,is the other low-price pursuing behavior.By incorporating consumer utility functions,demand functions for two-period dual-channel model are proposed.Based on demand functions,optimal pricing strategies for both manufacturer and retailer are established.It indicates that consumer's showrooming behavior is detrimental to the retailer under certain conditions,meanwhile,showrooming always hurts the manufacturer who acts as an online retailer and a wholesaler.To counter negative effects of showrooming,an online customized strategy is modeled for the manufacturer.Results show that customized strategy would always hurt the retailer,while it is beneficial for the manufacturer under some conditions and the social welfare of the whole supply chain.At last,in response to consumers' showrooming negative effect on the retailer,valueadded services and price matching are offered in a dual-channel supply chain.In this phenomenon,optimal pricing strategies for the manufacturer and the retailer are constructed based on the consumer utility theory.Effects of value-added services and the price matching on channel competition are also studied.It shows that the value-added service provided by the retailer could effectively diminish sales loss caused by consumers' showrooming behaviors,increase the retailer's profit,and hurt the manufacturer's profit.Oppositely,offering price matching would hurt the retailer's profit,while the manufacturer could always benefit from offering price matching policy.Both the value-added service and price matching policy would improve the social welfare of the supply chain.