Pricing Policy and Channel Selection of Manufacturer Considering Channel Operating Cost Difference

doi:10.3969/j.issn.1007-7375.2021.02.001

Abstract

Abstract: Considering the characteristics of different online distribution models, online channel are divided into direct selling dual-channel, online reselling and agency selling dual-channel. The pricing strategy and channel selection in supply chain comprising a dominant manufacturer, a traditional retailer and a online retailer under three types of mixed distribution channels are explored. The results show that the lowest product prices are observed under the agency model, and the relationship between direct selling model and reselling model is influenced by channel preference. As the operating cost of online or offline channels increases, manufacturers will reduce the wholesale prices of corresponding channel products, and retail prices are positively correlated with their own channel costs. When the cost of the manufacturer's self-built platform is low, the manufacturer should choose the online direct selling model; however, when the cost of the manufacturer's self-built platform is high and the service efficiency of the agency model is low enough, the manufacturer should choose the online distribution mode, and otherwise the manufacturer should choose the agency model.

Key words: channel operating cost, dual-channel, manufacturer, pricing

CLC Number:

F274

LIANG Xi, LIANG Lunhai. Pricing Policy and Channel Selection of Manufacturer Considering Channel Operating Cost Difference[J]. Industrial Engineering Journal, 2021, 24(2): 1-9.

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