Product Quality Matching Strategy in a Dual-Channel Supply Chain: A Perspective From Mental Accounting Theory in Behavioral Finance

Lei Yan, Jianhao Gao, Shuang Wang, Shandong Mou, Guangye Xu and Haiyan Wang

SAGE Open, 2023, vol. 13, issue 2, 21582440231174853

Abstract: We extend the mental accounting perspective to build models on product quality matching strategy, which is effective in resolving the conflict between traditional and online channels. We consider that perceived values of high-quality and low-quality products belong to different mental accounts, and construct three product quality matching strategies for a dual-channel supply chain. Comparing the profit of each member, we find that (1) the strategy where the traditional channel distributes premium products, while the e-tailer sells low-quality products, is most conducive to the manufacturer; (2) the profit elasticity of the e-tailer is larger than that of the traditional retailer; (3) traditional retailers should sell more price elastic products, and e-tailers should sell the product with lower price elasticity; and (4) the manufacturer has more monopoly power if consumers have a higher degree of acceptance for the online channel that distributes premium products.

Keywords: dual-channel supply chain; quality match; quality matching strategy; mental accounting; behavioral finance (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:13:y:2023:i:2:p:21582440231174853

DOI: 10.1177/21582440231174853

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