A pricing strategy of dual-channel supply chain considering online reviews and in-sale service
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 5 February 2024
Abstract
Purpose
The paper attempts to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a two-part tariff coordination mechanism.
Design/methodology/approach
To deal with this pricing conflict problems of dual-channel supply chain consisting of dominant manufacturer and a retailer, considering the fact that online reviews and in-sale service are important factors on consumers’ purchase decisions, the authors establish some basic models and exploit them to discuss the optimal pricing decisions under the decentralized and centralized decision and analyze the influence of online reviews and in-sale service on dual-channel supply chain. Finally, the authors design a profit-sharing coordination mechanism.
Findings
The results show that the optimal online direct selling price is positively correlated with product perceived quality obtained from online reviews and negatively correlated with the in-sale service. The traditional retail price is positively correlated with the in-sale service and weakly correlated with online reviews. For the manufacturer and retailer, whether decentralized decision or coordination contract, their profits increase with the increase of the in-sale service in a certain range and quality perceived from spontaneous online reviews. Online reviews and in-sale service are important factors on consumers’ purchase decisions. Positive in-sale services and online reviews can provide consumers with a better shopping experience, thereby promoting their enthusiasm for shopping and improving their quality of life. The two-part tariff coordination mechanism improves the profits of the manufacturer and the traditional retailer, respectively, through the transfer fee.
Originality/value
The proposed approach can well analyze the channel conflicts and pricing problems between retailers and manufacturers with respect to product offline price and online price. The analysis and results can inform decision-making for manufacturers and retailers.
Keywords
Acknowledgements
This work is partially funded by the National Natural Science Foundation of China (71503103; 72372059); National Social Science Foundation of China (19FGLB031; 22AJL002); Outstanding Youth in Social Sciences of Jiangsu Province; Qinglan Project of Jiangsu Province, and the Fundamental Research Funds for the Central Universities (JUSRP622047;JUSRP321016), Soft Science Foundation of Wuxi city (KX-23-A01) and Engineering Research Center of Integration and Application of Digital Learning Technology, Ministry of Education(1321005). Even so, this work does not involve any conflict of interest.
Citation
Liu, Y., Lin, C.-X. and Zhao, G. (2024), "A pricing strategy of dual-channel supply chain considering online reviews and in-sale service", Journal of Business & Industrial Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JBIM-06-2022-0248
Publisher
:Emerald Publishing Limited
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