Pricing In Dual Channel Supply Chain Considering The Product Substitution

With the development of e-commerce, dual-channel marketing pattern containing traditional retail channels and network marketing channels has been adopted by many manufacturers. For example, Dell, Nike, etc. have already used dual channels to seize markets and improve profits. But the introduction of another channel will impact the existing marketing channels, causing channel conflicts. Nowadays, as customer needs become more various and market competitions get more intense, the proper product pricing and the effective coordinating of channels is critical to manufacturers or even the entire supply chain. In this case, this paper constructs dual channel manufacturer pricing model based on alternative products competition, and uses consumer utility theory and game model in the research process.First, assuming that products of the same type have competed in the traditional retail market, this paper expands the city ring Salop model. This paper constructs a manufacturer's strategy model based on competitive environment to discuss the best channel price when the dual channels are vertically integrated or separately controlled and analyzing the change of price caused by the change of products alternative degree when decision-making is centralized or decentralized.Then, the supply chain coordination problem is researched. Firstly, by comparing supply chain profits between centralized decision-making and decentralized decision-making, this paper finds that double marginalization effect occurs in decentralized decision-making supply chain. Secondly, a pricing model based on revenue-sharing contract is built. Finally, this paper studies product pricing strategy based on revenue-sharing contract and explores the Pareto improvement problem based on revenue-sharing contract.In the end, this paper verifies the effectiveness of coordination strategy through numerical analysis, finding that supply chain efficiency will improve with the increase of product substitution degree and the coordination efficiency will decrease at first and increase after a while with the increase of product substitution degree.This paper takes manufacturers adopting dual-channel supply chain under the environment of e-commerce as the main researching objects.Considering the situation that there are competitions between different products in the same category in the market, this paper carry out a further research on the basis of dual-channel supply and supply chain alliance research, building a further model in the research of dual-channel supply. The conclusions of this paper can provide a theoretical reference for products pricing strategy,the organization and operation of enterprises, products marketing and other related research. In short, this paper has certain engineering reference value and academic significance.