Wholesale Pricing Scheme Decision in Dual-channel Supply Chain with Marketing Effort

Abstract：At present，the wholesale price setting mode can be divided into three classes：manufacturer independent pricing， taking retail price as benchmark and taking direct selling price as benchmark. Based on dual supply chain game model，by exploring the impact of channel members’marketing effort on channel optimized pricing，the authors find that channel marketing investment has impact on channel pricing. In the light of the first two modes of wholesale price setting，the increase of manufacturers’and retailers’marketing effort will increase both direct selling price and retail price. In the light of the third mode of that，the increase of manufacturers’marketing effort will also increase both the direct selling price and retail price；but when the investment of retail channel marketing is comparatively high，retailers’marketing effort has positive impact on retail channel pricing，and negative impact on online channel pricing. In the light of all the three modes，the impact of marketing effort on the counterparty’s channel pricing and their own channel pricing will be determined by consumers’channel preference and the degree of marketing effort. When consumers’online (retail) channel preference and manufacturers’current marketing effort are both in the low level，the impact of manufacturer’s (retailers’) marketing effort on retail (online) channel selling price will be greater than that on online (retail) channel selling price. Analysis of examples shows that online channel market share and channel members’marketing effort has important impact on the profit of channel members and supply chain；whether the retail price can be observed will not have obvious impact on the comparison among different retailers’profit，but it will have obvious impact on the comparison between manufacturer’s profit and the profit of supply chain. The choice of wholesale price setting mode will be determined by whether the online channel market share，channel members’marketing effort and retail price can be observed.

Key words：dual-channel supply chain；wholesale price setting；Stackelberg game；marketing effort；channel pricing