Dual-channel Manufacturer's Pricing Strategy When A New Manufacturer Enters

With the continuous development of network economy,the number of online-shopping customers in our country has increased continuously,the transaction scale of network market has extended continuously.The rapidly development of network scale attracts more and more manufacturers to open up the online sales channel on the basis of the traditional retail channel.Compared with the traditional retail channel,the online sales channel has obvious advantages:the requirement of initial investment is low,sales activities are unrestricted by time and space,the online sales channel helps to reduce inventories and overstocks so that companies can reduce costs and increase profits.Therefore,the manufacturers who enter the market earlier will open up the online sales channel one after another on the basis of the traditional retail channel becoming dual-channel manufacturers.The manufacturers,retailers and customers form a complete dual-channel supply chain.However,the manufacturers who enter the market later restricted by capital and management ability tend to enter into the market and sell products through the online sales channel.There are lots of papers domestic and overseas discussed the dual-channel conflict and coordination.There are mainly two decision-making modes of dual-channel supply chain,the centralized mode and decentralized mode.Decentralized mode means that manufacturer and retailer make pricing decision for maximizing own profits purposes,while centralized mode means that manufacturer and retailer make pricing decision for maximizing common profits purposes.No matter which mode dual-channel manufacturers adopt,the entrance of new manufacturers will certainly form the shock to manufacturers who enter the market earlier,for this reason,the dual-channel manufacturers will certainly readjust the pricing strategy to ensure to realize maximum profits of their own.This text discusses the problems of pricing strategy of dual-channel manufacturers after the new manufacturers enter into the market.By distinguishing centralized and decentralized decision-making modes,two stages before and after new entrants,we respectively build the models and make numerical example simulations to analyze how new entrants affect dual-channel manufacturers and retailers' pricing,demand and profits and then analyze the influences of changing parameters on dual-channel manufacturers and retailers' pricing,demand and profits.The following findings have been made through this text:before the new entrants enter into the market,decentralized mode is better for dual-channel manufacturers and retailers than centralized decision-making mode.No matter which decision-making mode is adopted,manufacturers and retailers'market demand,pricing strategy and profits level are decided by the market latent demand,the customers' sensitivity to price,the demand transfer to channel price variance and the cost of production.After the new manufacturers enters into the market,decentralized mode is better for new manufacturers while centralized mode is better for dual-channel manufacturers and retailers.The best pricing strategy of dual-channel manufacturers is to raise price of online sales channel and wholesale price slightly after new manufacturers enter into the market.This is because as a leader,the dual-channel manufacturer has more market share,so it can make up the profits loss caused by new manufacturer's entrance by raising price slightly.No matter which decision-making mode is adopted,for new manufacturers,dual-channel manufacturers and retailers,each pricing strategy,demand and profits are influenced by the parameters like the customers'sensitivity to price of product 2,the demand transfer to different products' price variance,the cost of product 2 besides the former parameters.