Manufacturer encroachment becomes increasingly more prevalent and incurs channel competition and product competition. This paper investigates an effective encroachment format (i.e., direct selling or agent selling) to ease channel competition, and analyzes how providing vertically differentiated products (i.e., easing product competition) affects the effectiveness of easing channel competition in improving the manufacturer’s profit. Our analysis shows that the double marginalization effect of the direct channel caused by agent selling may produce a positive effect, easing channel competition. On this basis, we find that adopting quality differentiation can generate a synergy (mitigation) effect to strengthen (reduce) the effectiveness (ineffectiveness) of easing channel competition in improving the manufacturer’s profit. In addition, adopting quality differentiation enhances (reduces) the manufacturer’s preference for direct selling (non-encroachment). Further, we explore the strategic interplay between partners. We uncover that encroachment always hurts the retailer, while the retailer can prevent encroachment under quality differentiation strategy (i.e., an anti-encroachment behavior). Furthermore, although anti-encroachment causes strategy conflict between partners, Pareto improvement can achieve consistency. Interestingly, the selfish behavior of the manufacturer or retailer that pursues solely maximizing individual profit leads to an encroachment trap or an anti-encroachment trap, that is, a non-optimal result occurs. Remarkably, although anti-encroachment may be ineffective, can generate an anti-encroachment potential or an anti-encroachment threat to reduce the loss of encroachment. In particular, the manufacturer’s countermeasures (i.e., changing the equilibrium encroachment strategy) may form a deterrence to force the retailer to abandon anti-encroachment.

中文翻译：

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垂直差异化产品的最佳渠道结构


制造商侵占变得越来越普遍，并引发渠道竞争和产品竞争。本文研究了一种有效的侵占形式（即直销或代理销售）来缓解渠道竞争，并分析了提供垂直差异化产品（即缓解产品竞争）如何影响缓解渠道竞争在提高制造商利润方面的有效性。我们的分析表明，代理销售引起的直接渠道的双重边缘化效应可能会产生积极效应，缓解渠道竞争。在此基础上，我们发现采用质量差异化可以产生协同（缓解）效应，以加强（降低）缓解渠道竞争在提高制造商利润方面的有效性（无效性）。此外，采用质量差异化可以提高（减少）制造商对直销（非侵占）的偏好。此外，我们还探讨了合作伙伴之间的战略相互作用。我们发现，侵占总是伤害零售商，而零售商可以通过质量差异化策略（即反侵占行为）来防止侵占。此外，尽管抗侵占会导致合作伙伴之间的策略冲突，但帕累托改进可以实现一致性。有趣的是，制造商或零售商的自私行为，如果只追求个人利润最大化，就会出现侵占陷阱或反侵占陷阱，即出现非最优结果。值得注意的是，尽管反侵占可能无效，但可以产生反侵占潜力或反侵占威胁，以减少侵占的损失。特别是，制造商的对策（即，改变均衡侵占策略）可能会形成威慑力，迫使零售商放弃反侵占。