Pricing Game Models of Hybrid Channel Supply Chain: A Strategic Consumer Behavior Perspective

Abstract

The current sales model combining online and offline channels meets the diverse requirements of consumers. However, consumers’ inter-channel switching behavior and strategic behavior also pose significant challenges to pricing decisions in the hybrid channel. Using game theory and consumer utility theory, a retailer-driven pricing model is developed to study the optimal pricing problem for each channel in a mixed-channel supply chain considering the characteristics of channel competition and the waiting behavior of strategic consumers. Study results show there is a negative correlation between the proportion of strategic consumers and the optimal pricing and profit of each channel, and as the proportion of strategic consumers rises, the optimal pricing and profit of manufacturers and retailers all trend downward. Incorporating strategic consumers into the pricing model will assist the supply chain in elucidating the behavior of consumer heterogeneity during various decision-making periods and in making reasonable pricing decisions. Effective guiding strategies, such as pre-discount and purchase restrictions, can reduce the profit loss caused by strategic consumer behavior. The optimal combination of pre-announcement discount and strategic consumer ratio can generate the greatest profit for retailers and the supply chain.