Pricing Strategies in Dual-channel for Small and Medium-Sized Manufacturers

For the Small and Medium-Sized Manufacturers who are in the weak position in dual-channel marketing, they are often faced with channel price conflict. Therefore, it is necessary for the Small and Medium-Sized Manufacturers to formulate effective pricing strategies. This paper modeled pricing strategies for two scenarios, which involved the manufacturer and retailer make decisions individually and a retailer Stackelberg game. Then we investigated the impacts of digital attribute of product and power structure on the optimal pricing strategies. Besides, we considered the change both of manufacturer and retailer’s profits when the digital attribute of product is heterogeneous and the power structure is difference using computational studies. Our analyses show that, the non-dominant manufacturer decides online direct price according to the dominant retailer’s pricing strategy is a win-win strategy, both manufacturer and retailer are better off, and the dual-channel’s total profits also improve.