Article
Pricing and Coordination Strategies of Dual Channels
Considering Consumers’ Channel Preferences
Rufeng Wang
1
, Siqi Wang
1
and Shuli Yan
2,
*
Citation: Wang, R.; Wang, S.; Yan, S.
Pricing and Coordination Strategies
of Dual Channels Considering
Consumers’ Channel Preferences.
Sustainability 2021, 13, 11191.
https://doi.org/10.3390/su132011191
Academic Editors: João Carlos de
Oliveira Matias and Paolo Renna
Received: 14 September 2021
Accepted: 8 October 2021
Published: 11 October 2021
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1
School of Management, Henan University of Science and Technology, Luoyang 471000, China;
wangrus992@tju.edu.cn (R.W.); 200320190892@stu.haust.edu.cn (S.W.)
2
School of Management Science and Engineering, Nanjing University of Information Science and Technology,
Nanjing 210044, China
* Correspondence: yshuli@126.com; Tel.: +86-177-681-28192
Abstract:
With the rapid development of electronic commerce, consumers can freely buy the same
product from a manufacturers’ Internet channel or a resellers’ physical channel. Based on the
consumers’ channel preferences, this article classifies consumers into three types and investigates
the price decision in a dual-channel supply chain using a Stackelberg game, which assumes that the
manufacturer, as the game leader, first sets the wholesale price, then the reseller decides the retail
price, according to the wholesale price. Furthermore, some numerical experiments are developed to
investigate the impact of consumer acceptance, the degree of customer loyalty, and the proportion
of identical shoppers on prices and profits. The results show that whether both the retail price and
the wholesale price rise or fall depends on a combination of the cost of the physical channel and the
Internet shopper’s acceptance of the Internet channel. The reseller’s profit is always lower than the
manufacturer’s profit. The reseller’s profit is lower and the manufacturer’s profit is higher, compared
with that of a traditional single channel supply chain. The numerical experiments showed that when
an Internet shopper’s acceptance of an Internet channel is lower, the wholesale price and retail price
in the dual channels will increase with an increase of the degree of customer loyalty (the proportion
of identical shoppers). The reseller’s profit (the manufacturer’s profit) will reduce (rise) with the
augmentation of the Internet shopper’s acceptance of an Internet channel. Finally, we design a
revenue-sharing contract that can coordinate the supply chain and implement a win–win strategy for
all partners. This work makes some contributions to the research area of coordination in dual-channel
supply chains.
Keywords:
dual-channel supply chain; pricing strategy; coordination; channel preference; Stackel-
berg game
1. Introduction
With the rapid development of electronic commerce, manufacturers in more and more
industries have introduced Internet channels, in addition to their traditional physical retail
channels. For example, computer manufacturers (e.g., Apple, IBM, and Cisco), cosmetics
manufacturers (e.g., Estee Lauder), beverage and food manufacturers (e.g., Coca Cola),
sports manufacturers (e.g., Nike), and electronics producers (e.g., palmOne, Samsung, and
Sony) have adopted a dual-channel supply chain consisting of an Internet channel and a
traditional physical retail channel [
1
]. Facing the emergence of Internet channels, resellers
have experienced fiercer competition from manufacturers’ Internet channels and complain
that the manufacturers encroach on their market. Thus, channel conflict may occur in
dual-channel supply chains.
In the era of big data, the Internet is developing rapidly, and online shopping is more
convenient. Consumers’ purchasing behavior will change under a dual- channel environ-
ment. Many researchers have discussed this issue. Balakrishnan et al. [
2
] investigated
the browse-and-switch behavior of consumers; i.e., consumers first visited the traditional
Sustainability 2021, 13, 11191. https://doi.org/10.3390/su132011191 https://www.mdpi.com/journal/sustainability
