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 & Industrial Marketing
ISSN: 0885-8624
Article publication date: 28 August 2023
Issue publication date: 13 February 2024
Abstract
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.
Keywords
Acknowledgements
Funding: This work was funded by the Ministry of Education of Humanities and Social Science project (21YJC630002); the Natural Science Basic Research Program of Shaanxi (2020JQ-688); the China Postdoctoral Science Foundation (2019M653574); Research Grants Council of Guangdong Universities Special Key Project (Project No. 2021ZDZX3021); and Guangdong Higher Education Upgrading Plan (2021–2025) of “Rushing to the Top, Making Up Shortcomings and Strengthening Special Features” with UIC research grant UICR0400052-21CTL.
Citation
Cao, B., Dubey, R. and Luo, Z. (2024), "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 & Industrial Marketing, Vol. 39 No. 2, pp. 336-349. https://doi.org/10.1108/JBIM-05-2023-0285
Publisher
:Emerald Publishing Limited
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