Volume 56, Number 4, July-August 2022
|2945 - 2966
|30 August 2022
Markdown pricing strategy under a dual-channel supply chain with strategic consumers
School of Business Administration, Hunan University, Changsha 410082, P.R. China
2 Supply Chain and Logistics Optimization Research Centre, Department of Mechanical, Automotive & Materials Engineering, University of Windsor, Windsor N9B 3P4, Canada
3 State Key Laboratory of Internet of Things for Smart City, University of Macau, Macau, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 24 June 2022
This study investigates the markdown pricing strategies for a manufacturer and a retailer in a two-period dual-channel supply chain, where the manufacturer sells its products via its own direct channel and an independent retail channel to strategic consumers who may wait for markdowns. A two-period game is developed to systematically study the optimal regular prices and markdown prices under four cases, i.e., no markdown in both channels, markdown only in the direct channel, markdown only in the retail channel, and markdowns in both channels. By comparing the different cases, we find that the manufacturer benefits most from the case with markdowns in both channels, where the markdown rate of the retail channel is lower than that of the direct channel. On the other hand, the results indicate that the retailer may also profit most from the case with markdowns in both channels when the consumer acceptance of the direct channel is sufficiently high; otherwise, the retailer enjoys the highest profit under the case with markdown only in the retail channel. Finally, it is found that strategic consumer behavior has a positive impact on the retailer’s profit but a negative impact on the manufacturer’s profit.
Mathematics Subject Classification: 91A10 / 91A25 / 91A30
Key words: Dual-channel supply chain / markdown pricing / strategic consumers / Game theory
© The authors. Published by EDP Sciences, ROADEF, SMAI 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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