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Complementary Product Pricing and Service Cooperation Strategy in a Dual-Channel Supply Chain

Author

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  • Minglun Ren
  • Jiqiong Liu
  • Shuai Feng
  • Aifeng Yang

Abstract

This paper investigates a pricing game and service cooperation for complementary products in a dual-channel supply chain composed of two manufacturers and one retailer. The products of the two manufacturers are complementary products. One manufacturer sells products simultaneously through its own online channel and the traditional retailer, and the manufacturer delivers the product’s service to the retailer in its network direct sales channel by cooperating with the retailer in the form of service cost sharing. Considering the different market power structures of channel members, we establish three different pricing game models. By using the backward induction method and game theory, we obtain the corresponding analytical equilibrium solutions. Then, the service cooperation strategy of using the channel service sensitivity coefficients to construct the weight to share the service cost is proposed. Finally, numerical examples of optimal pricing strategies and profit conditions in different game situations are given, and sensitivity analysis of some key parameters is selectively performed, in which some valuable management insights are obtained.

Suggested Citation

  • Minglun Ren & Jiqiong Liu & Shuai Feng & Aifeng Yang, 2020. "Complementary Product Pricing and Service Cooperation Strategy in a Dual-Channel Supply Chain," Discrete Dynamics in Nature and Society, Hindawi, vol. 2020, pages 1-22, September.
    • Handle: RePEc:hin:jnddns:2314659
    DOI: 10.1155/2020/2314659
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    Cited by:

    1. Liu, Jiqiong & Yuan, Rui & Feng, Shuai, 2023. "Whether to offer return-freight insurance or open a physical showroom: A strategic analysis of an online retailer’s decisions," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    2. Man Yang, 2024. "Green Promotion Service Allocation and Information Sharing Strategy in a Dual-Channel Circumstance," Sustainability, MDPI, vol. 16(17), pages 1-18, August.

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