Pricing strategy and coordination mechanism of dual-channel supply chain based on reference quality effect

¹ College of Business, Hunan Normal University, Changsha, Hunan 410081, P.R. China
² School of Mathematical Sciences, Sunway University, Selangor 47500, Malaysia
³ Coordinated Innovation Center for Computable Modeling in Management Science, Tianjin University of Finance and Economics, Tianjin 300222, P.R. China
⁴ Department of Mathematics, Wilfrid Laurier University, Ontario N2L 3C5, Canada
⁵ School of Economics and Management, Changsha University of Science and Technology, Changsha, Hunan 410004, P.R. China

^* Corresponding author: ljorg@126.com

Received: 11 May 2021
Accepted: 22 July 2022

Abstract

The difference between the actual product quality experienced by consumers after shopping and the product reference quality expected before shopping usually has a significant effect on product demand and brand reputation. This paper considers a dual-channel supply chain composed of a manufacturer and a retailer. This investigation is on the influence of consumers’ reference quality under centralized decision-making, decentralized decision-making Bertrand game, and decentralized decision-making Stackelberg game. Furthermore, in view of the influence of reference quality, this paper constructs cost-sharing contracts and two-part tariff contracts to discuss the consistency of the dual-channel supply chain. The results show that consumers’ reference quality effect has a positive impact on the equilibrium price and profit of the dual-channel supply chain. Under normal circumstances, the dual-channel supply chain cannot achieve conformity. However, consistency can be achieved under the two-part tariff contract mechanism. Finally, numerical simulation is carried out for verification with numerical values.