Construction Strategy Of Manufacturers' Product Distribution Channel Under Network Environment

With the continued rapid development of e-commerce,launching product through online channels has become the choice of more and more companies.As online and offline channels coexisting in the market,companies have greater room for decision-making when they are building product channel strategy,which makes how to choose the right product channel strategy based on external market conditions become an important decision-making issue.At the same time,the channel power structure deeply affects the game between manufacturers and retailers,so it has been an important factor affecting the selection of manufacturers' product channel strategy.Finally,under the competitive market environment,horizontal competition among the same members of the supply chain is unavoidable.And manufacturers' product channel strategy decision will change when considering the horizontal competition that exist at the manufacturer level.This paper first constructs the Stackelberg game model between the manufacturer and the retailer under the monopoly situation.From the perspective of vertical competition,it examines the influence mechanism of the channel power structure which works on the manufacturer's product channel construction strategy;Then,based on the monopoly market structure,a single-channel competitive manufacturer is introduced to build a dual-oligopolistic competitive market that can describe the game behavior among manufacturers and explore market factors' influence on the product channel strategy under the situation where vertical competition and horizontal competition coexist.Finally,based on the background of the actual industry development and fully examine the evolutionary trend of market competition,the single-channel competitive manufacturer is expand into a dual-channel competitive manufacturer,and then the influence mechanism about the manufacturer's product channel construction strategy and comes from factors such as the degree of product substitution,the percentage of physical retailer commissions,and the structure of consumers is revealed.The following management implications were obtained from the study:(1)The weaker manufacturer's channel power is,the more manufacturers hope to increase their power through the introduction of online channels,and the more they want to choose a dual-channel strategy;Under any kind of power structure,when the proportion of physical-channel consumer increases,manufacturers first tend to choose a dual-channel strategy and later tend to use a single-channel strategy.The higher the inter-channel substitution is,the greater increase of power through introducing online channels will be realized.(2)Faced with competition from a single-channel manufacturer,an excessively high Commission of physical retailers will push manufacturers to open online channel only;in addition,when there are much more low-cost consumers,the offline-only channel strategy will be the best choice;in the case that the competitive manufacturer only open offline channel,the possibility that manufacturers choose a single-offline channel strategy increases with the increase in the degree of products' substitution;otherwise,faced with a single-online-channelcompetitive manufacturer,manufacturers would more like to choose open online channel only when the degree of products' substitution increase.(3)when the size of online market is small,the new product should be distributed through the offline channel only.When the size of online market is moderate,the new product should be distributed with dual-channel strategy.And when the size of online market is large,the new product should be distributed through the online channel only;Faced with a comparatively strong physical retailer,the manufacturer tends to open online channel only when introducing a new product;And when the difference between existing product and new product is large,the manufacturer tends to choose single channel strategy(online or offline).