Pricing and sourcing strategies for a combination of products with quality differentiation under the supply disruption risk
In view of the fact that high-quality national brands are more likely to experience stock-outs than low-quality retailer's private labels,this paper constructs a two-stage game model of"procurement+selling".The three-dimensional differences in product quality,procurement cost,and supply stability are considered.The pricing and procurement strategies for a combi-nation of national brand and private label are explored.The findings show that when national brand is unable to deliver their products,compared with the case where both products are deliv-ered,the retailer typically reduces the selling price of private label and purchase more quantities of private label and fewer quantities of national brand,thereby mitigating the negative impact of supply disruption risk if products'quality varies significantly.As supply uncertainty rises and the retailer order more private label product,in this case,the inventory of private label may occurs.Interestingly,when the quality differentiation in the product is small,the retailer will develop a sale strategy around the national brand.Instead,the threat of supply disruptions will lead to a rise in national brand product orders,which will encourage customers to purchase more national brand products by driving up the price of private label.
quality differentiationsupply disruptionsnational brandprivate labelpricing and sourcing
NETL
NSTL
万方数据
维普
