Research on Brand Competition and Decisions in Supply Chains Under Manufacturer Information Referral

Abstract

To study the impact of manufacturer information referral on the decision-making of supply chain members, a Stackelberg model is constructed based on a manufacturer, a professional retailer and a store brand retailer. The optimal price and profit of the manufacturer and both retailers when manufacturer refers consumers to the professional retailer or not are solved and compared. Besides, the effect of the manufacturer’s information referral on the members of the supply chain is analyzed. The results show that the referral of manufacturer benefits both manufacturer and the referred retailer if the referral level meets certain conditions, otherwise it may reduce the profit of both parties, and the referral level is affected by the market size of the professional retailer. Meanwhile, under the influence of the professional retailer’s market size and the intensity of market competition, the store brand retailer will continue to operate only when the referral level stays in a certain range, but the profit of its store brand is damaged. However, if the referral level exceeds a certain threshold, the store brand product’s profit will increase with free riding.

Keywords

• Supply chain
• information referral level
• brand competition
• Stackelberg game