Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value
Abstract
:1. Introduction
1.1. Backgrounds and Motivations
1.2. Research Questions and Main Findings
- (i)
- What is the impact of advertising strategies in different sales channels on the profitability of a dual-channel retailer?
- (ii)
- What should advertise levels and pricing decisions be for a dual-channel retailer across different sales channels?
- (iii)
- Given optimal advertising levels and pricing decisions, which is more profitable for retailers, online or offline sales channels?
1.3. Contributions and Paper Arrangements
2. Literature Review
2.1. Dual-Channel Operation
2.2. Advertising Strategies
3. The Problems and Assumptions
4. Models and Analysis
4.1. Online Sales Model
4.2. Offline Sales Model
4.3. Sensitivity Analysis
- (i)
- decreases with, increases with,, and.
- (ii)
- decreases withand, increases withand.
- (iii)
- decreases withand, increases withand.
- (i)
- decreases withand; increases with.
- (ii)
- decreases with,, and.
- (iii)
- decreases with,, and.
5. The Retailer’s Channel Decision
6. Extended Models: Advertising Effect
7. Numerical Analysis
8. Conclusions
8.1. Conclusion Remarks
8.2. Managerial Insights
8.3. Future Research
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
Appendix A
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Notations | Explanation |
---|---|
The consumers’ utility when purchasing the product, where . | |
The demand for the product, where . | |
The number of consumers. | |
The advertisement levels, where . | |
The cost for sale channels, where . | |
The cost for the advertisement, where . | |
The cost coefficient for the advertisements, where . | |
The discount factor for the online advertisements, where . | |
The retail prices, where . | |
Consumers’ valuation for the product, where . | |
The retailer’s profits, where . | |
The difference in profits between online and offline channels. |
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Yan, K.; Liu, S.; Zuo, M.; Zheng, J.; Xu, Y. Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value. Systems 2022, 10, 76. https://doi.org/10.3390/systems10030076
Yan K, Liu S, Zuo M, Zheng J, Xu Y. Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value. Systems. 2022; 10(3):76. https://doi.org/10.3390/systems10030076
Chicago/Turabian StyleYan, Ke, Shuai Liu, Min Zuo, Jiamin Zheng, and Yadong Xu. 2022. "Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value" Systems 10, no. 3: 76. https://doi.org/10.3390/systems10030076