An Study On E-retailers’ Price Strategy And Its Influence Under Multi-channel Environment

With the rapid development of network technology and E-commerce, numbers ofE-retailers has joined in the existence competition in the market. A lot of enterprisesopened up electronic channel to sell their products to consumers directly whilekeeping the tradition channel working. While the appearance of electronic channelsprovides more choices for consumers, it makes the competition in the market morecomplex.To explain the phenomenon of the emergence of professional electronic retailersand the wave of middlemen’s opening up electronic channel competitively, the authorstudy on the E-retailers’ price strategy and its influence of when the professionalelectronic retailer enter and when the middleman opens up it’s electronic channel afterthe professional electronic retailer’s entrance.When construct the demand function, we used the utility theory, took the impactof the product attributes and distribution channels credibility on the channel demandinto account, and considered the E-business processes in this model. In this paper, theauthor discussed about what would be affected when the professional electronicretailer enter into the market, what was the traditional retailer’s pricing strategy whenit opened electronic channel using independent business strategy or cooperatebusiness strategy with professional electronics retailer’s existence. By simulating thethe E-business processes θ, the per unit of product’s total costs of electronicchannelsc e+ωe, etc. the author get some conclusions from the simulation, and theresults of simulation expressed in graphical and tabular.The following are the main conclusions of this study:Professional electronic retailers compete for the market mainly depends on theadvantage of cost when it enters into the market; the enlargement of E-businessprocesses is good for professional electronic retailer; the purchase cost is adisadvantage for the tradition middleman. Whether using independent businessstrategy or cooperate business strategy with professional electronics retailer’sexistence, to middleman, low cost of electronic channel and high cost of traditionchannel are disadvantageous while to professional electronic retailer, high cost ofelectronic channel is disadvantageous. The enlargement of E-business processes takes the reduction of tradition channel’s demand and profit. The middlemen usingcooperate business strategy is good for traditional channel, and it always brings theaddition of profit for professional electronic retailer.