On Pricing Strategy of Private Label Supply Chain Considering Service Level under Fairness Concern
This study focuses on the private label supply chain system and constructs a manufacturer-led Stackelberg pricing game model,with consideration of the influence of retailer's service levels. Three possible structures between manufacturer and retailer in the supply chain,i. e.,manufacturer and retailer are fair-neutral,manufacturer is fair-concerned,and retailer is fair-concerned,are considered. The results shows that the manufacturer's fair concern behavior leads to the increase of the pricing of the reputable brand products by the manufacturer and the retailer,and decrease of the overall profit of the supply chain;the retailer's fair concern behavior leads to the reduction of the wholesale price of the products by the manufacturer,while the retailer still sets the pricing strategy based on the situation in the market,which shifts the profit of the manufacturer to the retailer;The improvement of the retailer's service level is conducive to the development of a high-pricing strategy,but only conditionally brings about an increase in profits. Therefore,manufacturers should pay attention to the competitive situation in the private label supply chain and retailers should focus on the perceived value of private label. Furthermore,they should reasonably distribute profits through the strategy of dislocation and differentiation to realize the stable development of the private label supply chain.
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