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Online-Offline Uniform Pricing Strategy of Multi-Channel Retailer Based on Fairness Preferences
NIU Zhi-yong, HUANG Pei, WANG Jun
2017, 25 (3):
147-155.
doi: 10.16381/j.cnki.issn1003-207x.2017.03.017
In this paper,online-offline uniform pricing strategy of the multi-channel retailer is studied.Multi-channel retailers,consisting of online and offline channel,begin to adopt the uniform price strategy on same products from different channels.For example,Suning Commerce(the biggest electronics retailer in China)announced that it would be same price of offline and online products since 2013.At the same time,some other multi-channel retailers also consider it as the important price strategy in the era of Ecommerce.In fact,puzzling because demand tends to be different across different types of marketing channel,and standard economic and marketing theory would suggest differential prices in those situations.To understand the puzzling aspect of uniform pricing strategy,it is explained based on consumers' fairness preferences.Generally,we are interested in analyzing three research questions.First,a model of fairness is presented,and it is expected the pricing strategy will arise as an equilibrium.Second,the implications of uniform pricing strategy are further understood,and if so,how the consumers' fairness can effect?Third,whether the multi-channel retailers can deviate from uniform pricing strategy and what conditions can mediate is examined?The functions of fairness preferenceθand online channel acceptanceδby consumers are emphasized.These three questions are important to multi-channel retailers because they are related with the long-run development of firms.Consumers' concern on price fairness is incorporated into a basic theoretical model and the fairness preference is defined by two types,symmetrical fairness and asymmetrical fairness.The results show that:First,a uniform price between online and offline may emerge in unique equilibrium,if consumers' concerns of price fairness are strong enough and the online channel is well accepted by consumers.Second,the multi-retailer will choose price discrimination strategy between channels if the online channel is not accepted by consumers and the fairness will not affect the price decision of retailer.Third,The asymmetrical fairness will improve the profits of retailer when she choose price discrimination and lower the profits for the uniform price strategy,it means that the fairness can mitigate the price competition between different channels.As a result,consumers' fairness preference is a mechanism for online-offline uniform pricing strategy of multi-channel retailer.There are two implications for multi-channel retailers.First,the retailers may have an incentive to adopt the uniform pricing strategy for different channels for the reason that the uniform pricing can be induced by consumers' fairness concerns may increase the total demand of all retailers.Second,the retailers with integrated channel(such as Suning)will have more incentive to accept uniform pricing,that means it may affect the equilibrium channel structure.So the uniform pricing strategy can soften competition of the different channels of retailer,and the important roles of uniform pricing should be emphasized.
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