Pricing Strategy of Dual-Channel Supply Chain for Alcoholic Products with Platform Subsidy

Dongyan Chen (), Yi Zhang () and Shouting Zhao ()
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Dongyan Chen: Beijing Wuzi University
Yi Zhang: Beijing Wuzi University (Purchasing Management)
Shouting Zhao: Beijing Wuzi University (Purchasing Management)

A chapter in LISS 2021, 2022, pp 81-95 from Springer

Abstract: Abstract The manufacturers in the alcohol industry used to sell products using the traditional channel, i.e., the products are sold to end customers through different wholesalers and retailers. With the increasing development of China’s e-commerce retailing, the manufacturers in the alcohol industry are trying to open direct online channels based on third-party online platforms, e.g., JD, Buy Together, Tmall, etc., to take advantage of online channel. However, the direct online channel and the traditional channel will compete with each other, which brings channel conflict. Besides, platform subsidy may also affect the dual pricing strategy. The existing studies cannot solve the research problem faced in this paper. Then we explore the effect of platform subsidy on pricing strategy and the channel conflict of dual-channel supply chain for alcoholic products. We use the Stackelberg game model to solve the optimal pricing strategy under two scenarios, e.g., the manufacturer implements single traditional channel, and the manufacturer implements dual channel with platform subsidy. Taking A as an example, the paper explores the effect of different factors on the optimal dual-channel pricing decisions and profit of manufacturers under the two scenarios. The results show that manufacturers can achieve more profit from dual channel. And with the increase of the platform subsidy and the proportion of subsidies borne by manufacturers, manufacturers’ online direct sales prices will increase. Also the platform subsidy intensifies the channel conflict.

Keywords: Platform subsidy; Dual-channel supply chain; Game (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/978-981-16-8656-6_8

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