Supply chain with national vs. store brand competition and strategic consumers

This paper considers a supplier-seller chain, in which the seller faces random quantity of strategic customers. Each customer chooses between the store brand of the seller and the national brand of the supplier according to his values to the two brands and the retail prices. The system is modeled as a Stackelburg game in which the supplier is the leader and the seller is the follower. The seller will charge a lower price to win a larger share of the market than in the case of channel optimization. Optimal responses of the players and coordination contracts are derived. We then extend the problem by considering multi suppliers and multi sellers, respectively. Main managerial insights are the impacts of parameters on the players' decisions.