Title: Research on manufacturer's dual-channel pricing strategy based on power structure

Authors: Weihua Liu; Wenfei Wu; Xiaoyu Yan; Xinyun Liu

Addresses: College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China ' College of Management and Economics, Tianjin University, No. 92, Weijin Road, Nankai District, Tianjin, 300072, China

Abstract: This paper constructs four models: 1) manufacturer-led + discriminatory pricing; 2) manufacturer-led + unified pricing; 3) retailer-led + discriminatory pricing; 4) retailer-led + unified pricing. By constructing the Stackelberg game model under different power structures, we find that when the manufacturer is dominant in the dual-channel supply chain and the retailer's lowest profit margin is in the middle, the manufacturer chooses to discriminate pricing. When the lowest profit margin of retailers is large, manufacturers always choose uniform pricing. When retailers are in a dominant position in the dual-channel supply chain and the highest profit margin of retailers is large, retailers will give priority to the unified pricing strategy; otherwise, retailers will choose the discriminatory pricing strategy.

Keywords: dual-channel; power structure; pricing strategy.

DOI: 10.1504/IJMOM.2022.130694

International Journal of Modelling in Operations Management, 2022 Vol.8 No.4, pp.354 - 378

Received: 22 May 2020
Accepted: 25 Oct 2020
Published online: 03 May 2023 *

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