Integrated Channel and Pricing Decisions Making Online/Offline Choices

Abstract

The decision whether to operate an offline store in complement with online sales is crucial for many companies’ business strategy and long-term sustainability. However, this decision is generally complex especially for situations involving lots of product types. This paper proposes simple mathematical models for making channel decisions and at the same time setting appropriate offline pricing in order to achieve target revenue. The analysis in this paper aids companies to make better decisions and better survive.