Abstract: There is price competition between dual-channel retailers and traditional retailers. It is important to decide optiamal price for dual-channel retailers and traditional retailers. Under this background, the pricing decisions of a system with a manufacturer and two competitive retailers, one of the retailers only operates tradition channel and the other operates dual-channel are studied. Firstly, a Stackelberg structure is assumed between the two retailers, for two different modes that dual-channel retailer and traditional retailer act as a leader, two pricing decision models are constructed respectively, futhermore the optiaml price strategies are obtained. Secondly, the retailers' pricing strategies are analyzed under specific circumstances. Finally, numerical examples are provided to analyze the effect of the parameters on the optimal results. According to comparative analysis and numerical analysis, it is found that the total profit of a retailer who acts as a leader is larger than that who acts as a follower. The total profit of the supplier is larger when traditional channel retailer acts as a leader. When the mareket demand of traditional retaler is the same as the dual-channel retaliers' online and offline market demand, the optimal price of traditional retailers acts as a leader is larger than that who acts as a follower. The optimal wholesale prices of the supplier are equal. The conclusion of this study can help to reasonable decision on how to choose the supply chain mode and pricing strategy for manufacturing and retail enterprises.

Key words: dual-channel supply chain, pricing strategy, Stackelberg game