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

• Published in: Industrial management + data systems Vol. 123; no. 3; pp. 1005 - 1051
• Main Authors: Xu, Senyu, Tang, Huajun, Huang, Yuxin
• Format: Journal Article
• Language: English
• Published: Wembley Emerald Publishing Limited 09.03.2023; Emerald Group Publishing Limited
• Subjects: Constraints; Coordination; Customer services; Customers; Decision analysis; Electronic commerce; Financing; Lead time; Marketing; Pricing; Profits; Revenue; Revenue sharing; Supply chains; United States > US; Cross-channel return; Dual-channel supply chain; Data-driven marketing; Contract coordination; Internal financing
• ISSN: 0263-5577; 1758-5783
• DOI: 10.1108/IMDS-07-2022-0436

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.