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Examining B2B channel decision-making within differential quality-level zone: a supply chain design using a non-cooperative strategic game theoretic approach (“Stackelberg Supply Chain for B2B”)

Cao, B, Dubey, R and Luo, Z (2023) Examining B2B channel decision-making within differential quality-level zone: a supply chain design using a non-cooperative strategic game theoretic approach (“Stackelberg Supply Chain for B2B”). Journal of Business and Industrial Marketing. ISSN 0885-8624

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Purpose The consumers want to purchase the target products in the right place, whereas the manufacturers want to allocate their possible products to optimal distribution channels. The manufacturer must know how to handle itself in this business. The study aims to examine the B2B channel decision-making with different product qualities in a non-cooperative supply chain. Design/methodology/approach The authors develop a B2B Manufacturer-Stackelberg game as an analytical framework, combining asymmetric preference of purchase channels choice by the consumers, a continuous quality setting of the manufacturer and differential channel structure to study the manufacturer’s product strategy and channel optimisation. By horizontal comparisons across four channel structures, product variety can be classified into the differential quality-level zone through exogenous quality intervention, and the preference of manufacturers in each quality-level zone within the structures can be ranked. Findings Theoretically and practically, the hybrid-channel structure should be completely neglected when the direct channel dominates the retail channel. In contrast, dual-channel structures dominate single channels irrespective of the channel power, and channel preferences between high-quality and low-quality zones are stable, whereas the preference in medium-quality zone is unstable. In addition, the supply chain system cannot achieve global Pareto improvement without any additional coordination mechanism between the manufacturer and the retailer. Originality/value The extended results by numerical examples suggest that the bigger the area of the medium-quality zone, the more significant the product variety of the manufacturer.

Item Type: Article
Additional Information: This author accepted manuscript is deposited under a Creative Commons Attribution Non-commercial 4.0 International (CC BY-NC) licence. This means that anyone may distribute, adapt, and build upon the work for non-commercial purposes, subject to full attribution. If you wish to use this manuscript for commercial purposes, please contact permissions@emerald.com
Uncontrolled Keywords: Asymmetric preference; quality threshold; channel decision-making; non-cooperative game analysis; B2B Manufacturer-Stackelberg supply chain; 1503 Business and Management; 1505 Marketing; Marketing
Subjects: H Social Sciences > HF Commerce > HF5001 Business
H Social Sciences > HF Commerce > HF5001 Business > HF5410 Marketing. Distribution of Products
Divisions: Business & Management (new Sep 19)
Publisher: Emerald
SWORD Depositor: A Symplectic
Date Deposited: 07 Aug 2023 08:31
Last Modified: 12 Sep 2023 11:00
DOI or Identification number: 10.1108/JBIM-05-2023-0285
URI: https://researchonline.ljmu.ac.uk/id/eprint/20655

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