Pricing Models For Supply Chain With Different Dominance Structures And Dual-Channel Retailer

With the rapid development of the internet and mobile communications technology, e-business has made a breakthrough in transaction scale, growth rate and business mode, bringing great challenge and pressure to traditional retail. More and more traditional retailers build virtual online channels based on e-business, meanwhile, e-business companies actively expand physical offline channels. The mode that retailers construct dual-channel has increasingly drawn high attention.Taking a supply chain consisting of one manufacturer, one retailer and consumers as the object of the research, this paper innovatively develops a pricing decision model of a dual-channel supply chain in which the retailer builds both physical offline channels and virtual online channels under three different dominance structures: Manufacturer-Stackelberg(MS), Retailer-Stackelberg(RS) and Vertical Nash(VN), and obtains the optimal price and max profits of the manufacturer and the retailer. By the parameter analysis and comparison analysis, the paper further refines the management significance and value of the results.Conclusions show that retailer should adopts unified pricing rather than pricing on the channel’s own. For retailers, it should remain the same channel price to obtain the optimal revenue while in the MS or RS supply chain, and lower the price while in the VN supply chain, then its revenue is lowest in the MS supply chain, higher in the VN and the highest in the RS. For manufacturer, both its optimal price and income are minimal in the RS supply chain, higher in the VN and the highest in the MS. The whole supply chain optimal revenue in the MS and RS supply chain are equal, but less than the corresponding one in the VN.In addition, through parameter analysis and numerical analysis, the same conclusions are found under all the three kinds of dominance structure: The optimal price of the retailer’s physical channel and online channel is monotonically increasing with its own market share. And between the two channels, the optimal price of which is higher depends on the ratio between the difference of potential market shares and the difference of cost of sales of each channels. Moreover, the optimal price and the max profits of manufacturer and retailer are all monotonically increasing with the cross price elasticity coefficient of dual-channel. Meanwhile, the optimal revenue of retailer is monotonically decreasing with the product price-sensitive coefficient.