Study On The Differentiated Products And Bundling Sales Under Vertical Structure

In the process of product manufacturing and sales,the upstream production enterprises first sell products to downstream retail enterprises,and the products are sold to consumers through downstream retail enterprises.Upstream and downstream enterprises constitute the vertical structural relationship of product manufacturing and sales.At present,many powerful upstream manufacturing enterprises not only sell products through downstream retail enterprises,but also directly sell products to consumers through their own marketing channels.At the same time,downstream retail enterprises often bundle their own products with those of upstream enterprises in order to obtain higher profits.This paper considers the market structure consisting of two types of upstream manufacturing enterprises which produces complementary products and one downstream retail enterprise.The two types of enterprises in the upstream market are composed of three enterprises:Enterprise 1 and Enterprise 3 which produce differentiated products A and A~D,and Enterprise 2 which produces complementary products B of A and A~D.Downstream retail enterprise R sells two complementary products A and B at the same time.This paper mainly studies the product competition strategy of differentiated upstream enterprises and the bundling strategy of downstream retail enterprises,analyses the optimal equalization decision of enterprises under different competitive circumstances and compares the social welfare standard under various competitive circumstances,which provides a scientific reference for competition policy.The conclusion of this paper is that:Firstly,under the marketing channel competition circumstance of vertical structure,the product quality choice of upstream differentiated enterprises is related to the ratio of added value provided to consumers.When the products have larger ratio of added value and bundling effect,the free channel upstream enterprises will adopt the high-quality differentiated product competition strategy,otherwise the low-quality differentiated product competition strategy will be adopted.Second,bundling is always the best choice for downstream retail enterprises.It will make upstream enterprises with their own channels more tend to provide low-quality products,thus improving their own profits.Third,the bundling of downstream retail enterprises is beneficial to improve the efficiency of the vertical structure and the social welfare standard of the whole market,and the channel competition in the vertical structure is also conducive to improving social welfare.