Pricing policies under direct vs. indirect channel competition and national vs. store brand competition |
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Authors: | Hisashi Kurata Dong-Qing Yao John J Liu |
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Institution: | 1. School of Business Administration, The University of Wisconsin-Milwaukee, 3202 N. Maryland Ave., Milwaukee, WI 53201, USA;2. College of Business and Economics, Towson University, 8000 York Road, Towson, MD, 21252–0001, USA;3. Department of Logistics, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong |
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Abstract: | This paper analyzes channel pricing in multiple distribution channels under competition between a national brand (NB) and a store brand (SB), where an NB can be distributed both through a direct channel (e-channel) and an indirect channel (local stores) but an SB can be distributed only through an indirect channel. We first explore cross-brand and cross-channel pricing policies. Formulating the problem as a Nash pricing game, we reach two findings: (1) brand loyalty building is profitable for both an NB and an SB; and (2) marketing decisions are more restrictive for an NB channel than they are for the SB channel. We next assess supply chain coordination and reach two findings: (1) wholesale price change does not coordinate the supply chain and (2) an appropriate combination of markup and markdown prices can achieve both supply chain coordination and a win–win outcome for each channel. |
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Keywords: | Supply chain management Pricing Brand management Channel competition Comparative statics |
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