IDEAS home Printed from https://ideas.repec.org/a/hin/jnddns/424181.html
   My bibliography  Save this article

Pricing Decisions of Competing Tobacco Enterprises with Online Channel

Author

Listed:
  • Rong Zhang
  • Jackson Jinhong Mi
  • Bin Liu

Abstract

According to the new measurement of launching online distribution channels of tobacco enterprises in China, this paper investigates the tobacco firm’s pricing decisions on the supply chain which consists of two manufacturers and one retailer under three dual-channel structures. Three dual-channel structures include no online channel, only one online channel by one manufacture, and two online channels by two manufacturers. We apply the Stackelberg game to analyze the equilibrium pricing strategies under different structures and try to explore the necessity and advantages of launching online sales channels. The results demonstrate that the substitutability of a product has significant impact on introducing online sales channels, and the online dual-channel structure could result in less profit for manufacturers compared to the traditional retail channel structure; and thus, a dual-channel structure with online sales is not the best strategy for traditional manufacturers. Moreover, when the product is less substitutable, the effect of the tobacco control on the online sales channel is inferior to the traditional channels and vice versa.

Suggested Citation

  • Rong Zhang & Jackson Jinhong Mi & Bin Liu, 2015. "Pricing Decisions of Competing Tobacco Enterprises with Online Channel," Discrete Dynamics in Nature and Society, Hindawi, vol. 2015, pages 1-8, November.
    • Handle: RePEc:hin:jnddns:424181
    DOI: 10.1155/2015/424181
    as

    Download full text from publisher

    File URL: http://downloads.hindawi.com/journals/DDNS/2015/424181.pdf
    Download Restriction: no
    File URL: http://downloads.hindawi.com/journals/DDNS/2015/424181.xml
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2015/424181?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hin:jnddns:424181. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mohamed Abdelhakeem (email available below). General contact details of provider: https://www.hindawi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.