Research On The Pricing Problem Of Product And Its Additional Services Under The Vertical Channel

Along with the sustained and rapid development of China’s economy for many years, after having strong technology and financial strength, the enterprise starts to focus the competition on the supply chain channel management and service.The development of e-commerce and logistics technology provides channels for the manufacturers to face the consumer directly. Effect of different service providers to provide services for the main body of supply chain members of pricing strategy, profit and demand is a new problem worthy of studying.This paper mainly uses the micro economics, operations research, marketing science, game theory, management science and other disciplines theory and method, constructs a channel structure model consisted of a manufacturer and a retailer. Calculated the equilibrium solution in the three models: Bertrand game of manufacturers and retailers, and manufacturers Stackelberg pricing game, retailers Stackelberg pricing game, and found out the optimal pricing under different game models. Discussed the physical product and service pricing problem in both cases: the manufacturers provide additional services and retailers provide additional services.Firstly, the paper analyzed the pricing problem of manufacturers providing additional services under vertical channel supply chain system, which is, the pricing problem under the mode of the manufacturer produce productions and additional services at the same time, the retailers distribute of physical product. The results show that: the demand of physical product is positively correlated to the retailer’s marginal benefit; The retailer’s profit is positively correlated to the square of entity productions’ demand; there are conflicts between members of the supply chain, we can achieve the supply chain coordination or Pareto improvement if we use the supply chain coordination strategy; the marginal cost of entity product c1 and the marginal cost of service product c2 is positively correlated to the manufacturer’s wholesale price.Secondly, the paper analyzed the pricing problem of retailers providing additional services under vertical channel supply chain system, which is, the pricing problem under the mode of the manufacturer produce productions,the retailers distribute of physical product and additional services. The results show that: When the members of the enterprises in the supply chain have power to some extent, the enterprise members who provide service products who get more profit, and different service products provider gets the same profit; the marginal cost of entity product c1 is positively correlated to the manufacturer’s wholesale price, the marginal cost of service product c2 is negatively correlated to the manufacturer’s wholesale price; The manufacturer’s profit is positively correlated to the square of entity productions’ demand.Through the study above, we found that when different service providers provide service in the vertical channel system, the following conclusions were established: the power of the enterprise members in the supply chain is achieved by the determination of the wholesale price, the differences of the power between members will not lead to the change of terminal product price and the final demands; the pricing of service products has nothing to do with both the services provider and the game environment, it is affected by the marginal cost of service products directly.