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.
Keywords: Dual-channel supply chain, markdown pricing, strategic consumers, Game theory
@article{RO_2022__56_4_2945_0,
author = {Li, Haijiao and Yang, Kuan and Leung, Janny M. Y. and Zhang, Guoqing},
title = {Markdown pricing strategy under a dual-channel supply chain with strategic consumers},
journal = {RAIRO. Operations Research},
pages = {2945--2966},
year = {2022},
publisher = {EDP-Sciences},
volume = {56},
number = {4},
doi = {10.1051/ro/2022113},
mrnumber = {4474359},
zbl = {1498.90011},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2022113/}
}
TY - JOUR AU - Li, Haijiao AU - Yang, Kuan AU - Leung, Janny M. Y. AU - Zhang, Guoqing TI - Markdown pricing strategy under a dual-channel supply chain with strategic consumers JO - RAIRO. Operations Research PY - 2022 SP - 2945 EP - 2966 VL - 56 IS - 4 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2022113/ DO - 10.1051/ro/2022113 LA - en ID - RO_2022__56_4_2945_0 ER -
%0 Journal Article %A Li, Haijiao %A Yang, Kuan %A Leung, Janny M. Y. %A Zhang, Guoqing %T Markdown pricing strategy under a dual-channel supply chain with strategic consumers %J RAIRO. Operations Research %D 2022 %P 2945-2966 %V 56 %N 4 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2022113/ %R 10.1051/ro/2022113 %G en %F RO_2022__56_4_2945_0
Li, Haijiao; Yang, Kuan; Leung, Janny M. Y.; Zhang, Guoqing. Markdown pricing strategy under a dual-channel supply chain with strategic consumers. RAIRO. Operations Research, Tome 56 (2022) no. 4, pp. 2945-2966. doi: 10.1051/ro/2022113
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