Competition Strategy And Coordination Mechanism In The Dual-channel Supply Chain Considering The Influence Reference Effect

With the development of electronic commerce and network technology,dual-channel supply chain has become the development trend of the future supply chain.Consumers have more reference and contrast between online shop and brick-and-mortar shop in the process of consumption.The reference effect has great influence on the operation of dual-channel supply chain.Price competition is the main reason for the channel conflict,and the online shop makes the competition between brick-and-mortar shops upgrade between brick-and-mortar shop and online shop.With the change of habit and behavior,consumers pay more attention to consumption quality except price of product.In order to meet customers' needs and gain superiority in competition,the online shop and brick-and-mortar shop improve and prefect service level continually.The reference effect will be changed under the influence of online shop's and brick-and-mortar shop's service.In this paper,we consider a setting with the manufacturer selling its products through a brick-and-mortar shop and its own online channel.Firstly we develop a Stackelberg game model to examine how the reference price effect affect the online shop's price strategy and the brick-and-mortar shop's price strategy and design a contract to coordinate the whole supply chain by analyzing revenue variation of the manufacturer and the brick-and-mortar shop,then develop a dynamic game model to analyze the influence of the brick-and-mortar shop's service,finally add online shop's service and analyze the influence of reference effect on dual-channel when online shop and brick-and-mortar shop compare on service.The result shows that:(1)Reference effect can reduce channel price conflict and the influence of consumer channel preference on manufacture's and brick-and-mortar shop's revenue,stabilize the profitability of the manufacturer and the brick-and-mortar shop,and improve the operation efficiency of supply chain.Compared with the centralized setting,the profit of the whole supply chain will decrease under the decentralized setting.A well-designed two-part tariff contract can coordinate the dual-channel supply chain perfectly.In the cooperation contract,the reference effect has impact on both manufacturer's wholesale price and brick-and-mortar shop's sales allowances,and the dominated manufacture should cooperate with brick-and-mortar shop positively utilizing the influence of reference effect.(2)The influence of brick-and-mortar shop' service on supply chain operation is very complex.The free-riding behavior will significantly reduce service efforts,however,the reference effect will make manufacture spend more efforts on service level.The simple wholesale price contract can't coordinate the whole supply chain perfectly,and the revenue of whole supply chain will decrease under the decentralized setting because of the shop's serviceefforts level is not enough.The dominated manufacture can improve dual-channel chain operation efficiency by sharing the brick-and-mortar shop's service cost when the brick-and-mortar shop is unwilling to enhance the service efforts.(3)Reference effect can stimulate both the online shop and brick-and-mortar shop to improve their service level.Compared with the centralized setting,the brick-and-mortar shop's service efforts level will decrease under the decentralized setting,but the online shop's makes no difference.Although a two-way cost-sharing contract can't coordinate the whole supply chain perfectly,the dominated manufacture may share the brick-and-mortar shop's service cost and charge fixed fees,which can improve the revenue of both side and the dual-channel chain operation efficiency.In addition,the reference effect can add stability in the cooperation.In reality,more and more manufacturers sell products through its own online channel,which is very general.Our work may provide guidance for enterprise decision-making.For example,reference effect can reduce channel price conflict and increase the possibility of cooperation between manufacturer and brick-and-mortar shop,which can be used by dominated manufacture to cooperate with the downstream enterprise to increase both profile.