Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism

Pricing and promotion are two important decisions during the market launch of new consumer electronics products. Nowadays, the pricing and promotion of consumer electronic products are often not made separately but at the same time. This study focuses on the pricing-promotion coordination mechanism...

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Main Authors: Guanbing Zhao, Yangyang Qiu, Muhammad Imran, Fazal Manan
Format: Article
Language:English
Published: Wiley 2021-01-01
Series:Complexity
Online Access:http://dx.doi.org/10.1155/2021/5588724
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author Guanbing Zhao
Yangyang Qiu
Muhammad Imran
Fazal Manan
author_facet Guanbing Zhao
Yangyang Qiu
Muhammad Imran
Fazal Manan
author_sort Guanbing Zhao
collection DOAJ
description Pricing and promotion are two important decisions during the market launch of new consumer electronics products. Nowadays, the pricing and promotion of consumer electronic products are often not made separately but at the same time. This study focuses on the pricing-promotion coordination mechanism of a secondary supply chain of new consumer electronics products (which consists of a manufacturer and a seller). Price and the degree of promotion together affect the demand for products. Manufacturers give sellers a sales target. Manufacturers and sellers set prices and promotions separately, introduce repurchase penalty joint contracts, and establish supply chain profit models to compare and analyze optimal pricing, promotion efforts, and maximum profit of supply chains under different decision-making situations. We prove that the repurchase penalty joint contract can coordinate the supply chain under the assumptions of a single-period game and a multiperiod repeated game. The results show that under the repurchase penalty joint contract, when manufacturers and sellers choose high prices and high promotions at the same time, the supply chain of new consumer electronics products has the largest profit. Finally, numerical experiments are conducted to study the influence of parameters on optimal decision-making and supply chain profits.
format Article
id doaj-art-dbca76a9e287497bbcaa202c0a4c4999
institution Kabale University
issn 1076-2787
1099-0526
language English
publishDate 2021-01-01
publisher Wiley
record_format Article
series Complexity
spelling doaj-art-dbca76a9e287497bbcaa202c0a4c49992025-02-03T06:11:56ZengWileyComplexity1076-27871099-05262021-01-01202110.1155/2021/55887245588724Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination MechanismGuanbing Zhao0Yangyang Qiu1Muhammad Imran2Fazal Manan3School of Management, Jiangsu University, Zhenjiang 212013, Jiangsu, ChinaSchool of Management, Jiangsu University, Zhenjiang 212013, Jiangsu, ChinaFaculty of Management Sciences, ILMA University, Karachi, PakistanDepartment of Management Sciences, Bacha Khan University, Charsadda, Khyber Pakhtunkhwa, PakistanPricing and promotion are two important decisions during the market launch of new consumer electronics products. Nowadays, the pricing and promotion of consumer electronic products are often not made separately but at the same time. This study focuses on the pricing-promotion coordination mechanism of a secondary supply chain of new consumer electronics products (which consists of a manufacturer and a seller). Price and the degree of promotion together affect the demand for products. Manufacturers give sellers a sales target. Manufacturers and sellers set prices and promotions separately, introduce repurchase penalty joint contracts, and establish supply chain profit models to compare and analyze optimal pricing, promotion efforts, and maximum profit of supply chains under different decision-making situations. We prove that the repurchase penalty joint contract can coordinate the supply chain under the assumptions of a single-period game and a multiperiod repeated game. The results show that under the repurchase penalty joint contract, when manufacturers and sellers choose high prices and high promotions at the same time, the supply chain of new consumer electronics products has the largest profit. Finally, numerical experiments are conducted to study the influence of parameters on optimal decision-making and supply chain profits.http://dx.doi.org/10.1155/2021/5588724
spellingShingle Guanbing Zhao
Yangyang Qiu
Muhammad Imran
Fazal Manan
Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
Complexity
title Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
title_full Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
title_fullStr Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
title_full_unstemmed Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
title_short Customer Knowledge Enabled Innovation: Analyzing Pricing-Promotion Coordination Mechanism
title_sort customer knowledge enabled innovation analyzing pricing promotion coordination mechanism
url http://dx.doi.org/10.1155/2021/5588724
work_keys_str_mv AT guanbingzhao customerknowledgeenabledinnovationanalyzingpricingpromotioncoordinationmechanism
AT yangyangqiu customerknowledgeenabledinnovationanalyzingpricingpromotioncoordinationmechanism
AT muhammadimran customerknowledgeenabledinnovationanalyzingpricingpromotioncoordinationmechanism
AT fazalmanan customerknowledgeenabledinnovationanalyzingpricingpromotioncoordinationmechanism