Interacting with strategic waiting for store brand: Online selling format selection

This paper studies the interaction of online selling format selection with store brand introduction following national brand in the presence of strategic consumers. We find that platform under reselling format prefers the high pricing strategy for national brand while the manufacturer under agency selling format prefers the low pricing strategy. Moreover, highly strategic consumers discourage the platform from introducing the store brand and manufacturer from being the end-seller of national brand. Specifically, when consumers are less strategic, the platform tends to introduce a store brand with similar quality to national brand under reselling format, and a store brand with different quality to national brand under agency selling format. The manufacturer prefers agency selling format when consumers are less strategic; otherwise, reselling format is preferred. The platform and manufacturer can achieve a win-win result under agency selling with store brand when consumers are less strategic. However, the reselling format enables the manufacturer to deter the platform from introducing the store brand if the platform raises the accessing fee. We further extend to consider a store brand with quality better than the national brand and show above results remain valid.

Automated summary

This paper investigates the interaction between online selling format selection and the introduction of store brand following the national brand, taking into account the presence of strategic consumers. The findings reveal that the reselling format platform prefers a high pricing strategy for national brand, while the manufacturer under agency selling format prefers a low pricing strategy. Strategic consumers discourage the platform from introducing a store brand and the manufacturer from being the end-seller of national brand. However, when consumers are less strategic, the platform tends to introduce a store brand with similar quality to the national brand in the reselling format, and a store brand with different quality in the agency selling format. The manufacturer prefers the agency selling format when consumers are less strategic. The study also highlights the importance of pricing strategy and access fees in influencing the platform's decision on store brand introduction.