Abstract: With the rapid development of Internet technology, many manufacturers begin to adopt the dual-channel strategy, such as Benz、Nike and some other enterprises have been gained much benefits by adopting this distribution pattern. But with the introducing of direct channel, some conflict and competition arise between online and offline channels. How to coordinate this situation, make a better integration between online and offline channels bring a new challenge for the scholars and businessmen.
APP served as an effective media to connect online and offline channels, and brings many benefits for enterprises; therefore many enterprises begin to consider whether to develop APP and what effects may arise in their production and distribution systems. In addition, two kinds of substitutable products produced by two manufacturers, and one manufacturer's product has a stronger brand effect, how the brand effect of a product and the substitutability between two kinds of products influence the performances and the pricing strategies of production and distribution systems are also considered, these make the research more close to actual. Thus, according to media richness theory and spillover Effect theory, richness of APP is added into the demand model, sub-game Nash equilibrium are obtained under four different channel selection and pricing strategies by backward induction, by comparing the total profits of production and distribution systems before and after develop APP to decide channel selection strategies, furthermore, analyzing the effect of APP richness, brand effect and the substitutable degree of the products on pricing strategies.
The study results can be summarized as follows. Firstly,the channel price, market demand and total profits increase with the brand effect of the product, enterprises should improve brand image to attract more consumers and make much more benefits for themselves; Secondly, with the substitutability of the products increase, the total profits and price of production and distribution systems both decrease, therefore enterprises should pay attention to increase product differentiation, and focus on the R&D of APP richness; Finally, the market demand and total profits both increase with the richness of APP, and two manufacturers both choose to develop APP are Pareto optimal strategies.
Future research may consider the problem of Cournot competition between manufacturers, prices depend on the uncertain demand and the empirical methods to explore how to improve the APP richness are worth studying.

Key words: APP richness, multi-products and multi-manufacturers, production and distribution systems, sub-game Nash equilibrium, bertrand price competition