Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value
Retailers advertise on different sales channels. When consumers buy online, the effectiveness of advertising is discounted because they cannot feel the product. Observing this phenomenon, this paper studies the advertising strategy of a dual-channel retailer. In this paper, we build stylized game mo...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2022-06-01
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| Series: | Systems |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2079-8954/10/3/76 |
| _version_ | 1827656354371731456 |
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| author | Ke Yan Shuai Liu Min Zuo Jiamin Zheng Yadong Xu |
| author_facet | Ke Yan Shuai Liu Min Zuo Jiamin Zheng Yadong Xu |
| author_sort | Ke Yan |
| collection | DOAJ |
| description | Retailers advertise on different sales channels. When consumers buy online, the effectiveness of advertising is discounted because they cannot feel the product. Observing this phenomenon, this paper studies the advertising strategy of a dual-channel retailer. In this paper, we build stylized game models for the retailer’s price and advertising levels on online and offline channels, respectively. Our contribution is to provide prescriptions for how dual-channel retailers make price and advertise decisions and determine which channel is more profitable for retailers. We find that advertising discounts are not always harming the retailer’s profits. The level of advertising discounts causes retailers to increase the selling price when consumers engage in online shopping. Also, we derive that retailers can choose the sales channels based on the level of consumers’ channel preference of consumers. Interestingly, an increase in the level of advertising discounts will contribute to the growth of the retailer’s profit. Finally, by numerical analysis, we demonstrate the robustness of the results. |
| first_indexed | 2024-03-09T22:21:26Z |
| format | Article |
| id | doaj.art-ae3b678a3f6d4f13bfbbd1241943cd7d |
| institution | Directory Open Access Journal |
| issn | 2079-8954 |
| language | English |
| last_indexed | 2024-03-09T22:21:26Z |
| publishDate | 2022-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Systems |
| spelling | doaj.art-ae3b678a3f6d4f13bfbbd1241943cd7d2023-11-23T19:14:15ZengMDPI AGSystems2079-89542022-06-011037610.3390/systems10030076Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising ValueKe Yan0Shuai Liu1Min Zuo2Jiamin Zheng3Yadong Xu4National Engineering Laboratory for Agri-Product Quality Traceability, Beijing Technology and Business University, Beijing 100048, ChinaSchool of Economics and Management, Beijing Jiaotong University, Beijing 100044, ChinaNational Engineering Laboratory for Agri-Product Quality Traceability, Beijing Technology and Business University, Beijing 100048, ChinaNational Engineering Laboratory for Agri-Product Quality Traceability, Beijing Technology and Business University, Beijing 100048, ChinaSchool of Economics and Management, Beijing Jiaotong University, Beijing 100044, ChinaRetailers advertise on different sales channels. When consumers buy online, the effectiveness of advertising is discounted because they cannot feel the product. Observing this phenomenon, this paper studies the advertising strategy of a dual-channel retailer. In this paper, we build stylized game models for the retailer’s price and advertising levels on online and offline channels, respectively. Our contribution is to provide prescriptions for how dual-channel retailers make price and advertise decisions and determine which channel is more profitable for retailers. We find that advertising discounts are not always harming the retailer’s profits. The level of advertising discounts causes retailers to increase the selling price when consumers engage in online shopping. Also, we derive that retailers can choose the sales channels based on the level of consumers’ channel preference of consumers. Interestingly, an increase in the level of advertising discounts will contribute to the growth of the retailer’s profit. Finally, by numerical analysis, we demonstrate the robustness of the results.https://www.mdpi.com/2079-8954/10/3/76dual-channelpricing decisionsadvertisement strategiessupply chain |
| spellingShingle | Ke Yan Shuai Liu Min Zuo Jiamin Zheng Yadong Xu Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value Systems dual-channel pricing decisions advertisement strategies supply chain |
| title | Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value |
| title_full | Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value |
| title_fullStr | Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value |
| title_full_unstemmed | Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value |
| title_short | Dual-Channel Supply Chain Pricing Decisions under Discounted Advertising Value |
| title_sort | dual channel supply chain pricing decisions under discounted advertising value |
| topic | dual-channel pricing decisions advertisement strategies supply chain |
| url | https://www.mdpi.com/2079-8954/10/3/76 |
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