Decisions of pricing and delivery-lead-time in dual-channel supply chains with data-driven marketing using internal financing and contract coordination

Abstract

PurposeThe purpose of this research is to investigate how to introduce a financing scheme to tackle the manufacturer's capital constraint problem, discuss the effects of data-driven marketing (DDM) quality, cross-channel-return (CCR) rate and financing interest rate on the members' pricing and delivery-lead-time decisions and optimal performances, and analyzes `how to achieve the coordination within a dual-channel supply chain (DSC) by contract coordination.Design/methodology/approachThis work establishes a DSC model with DDM, and the offline retailer can provide internal financing to the capital-constrained online manufacturer. The demand under the price is determined based on DDM quality, customer channel preference and delivery lead time. Then, combined with the Stackelberg game, the optimal pricing and delivery-lead-time decisions are discussed under the inconsistent and consistent pricing strategies with decentralized and centralized systems. Furthermore, it designs a manufacturer-revenue sharing contract to coordinate the members under the two pricing strategies.Findings(1) The increase of DDM quality will reduce the delivery-lead-time under the inconsistent or consistent pricing strategy and will push the selling prices; (2) The growth of the CCR rate will raise selling prices and extend the delivery-lead-time under the decentralized decision; (3) Under price competition, the offline selling price is higher than the online selling price when customers prefer the offline channel and vice versa; (4) The retailer and the manufacturer can achieve a win-win situation through a manufacturer-revenue sharing contract.Originality/valueThis paper contributes to the studies related to DSC by investigating pricing and delivery-lead-time decisions based on DDM, CCR, internal financing and supply chain contract and proposes some managerial implications.

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“…Shen et al, 2021). When the manufacturer sells products through dual channels, the overall market demand is occupied by two channels, so we assume that the market share of the online channel is α and the market share of the offline channel is 1 À α (Li et al, 2019;Li & Shan, 2023;Shen et al, 2021;Xu et al, 2023;Yan et al, 2021).…”

“…To maintain analytical tractability and without loss of generality, we normalize the total market size to one, indicating the product's market potential if the good is free of charge and the seller does not invest in retail services (Dan et al, 2012; Gong et al, 2023; Li et al, 2019; Shen et al, 2021). When the manufacturer sells products through dual channels, the overall market demand is occupied by two channels, so we assume that the market share of the online channel is and the market share of the offline channel is (Li et al, 2019; Li & Shan, 2023; Shen et al, 2021; Xu et al, 2023; Yan et al, 2021).…”

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