The difference in Radiohead's approach is that it allows buyers to self-price discriminate.
Open image in new window Fig. 5 Amount of prices with respect to self-price effect Open image in new window Fig. 6 Amount of market shares with respect to self-price effect Open image in new window Fig. 7 Amount of profits with respect to self-price effect.
To increase the demand and capture more market share, the chains should try to increase the competition intensity parameter and decrease the self-price parameter.
Reducing the self-price effect parameter will increase the market share of the chains; this can be achieved by increasing brand loyalty.
We conclude that increasing brand loyalty by reducing self-price effect will increase the market shares of the chains and consequently result in more profits for the chains.
According to these figures, by increasing the amount of the self-price parameter, the market shares, the prices of the chain and total incomes will decrease; so the self-price parameter has a negative impact on equilibrium prices, total profits and market shares.
The following managerial insights can be derived from these sensitivity analyses: Reducing the self-price effect parameter will increase the market share of the chains; this can be achieved by increasing brand loyalty.
Table 16 represents the change of the equilibrium wholesale and retail prices, number of profits of the plants and DCs and market shares of the chains with respect to the self-price effect.
Figures 5, 6 and 7 show the sensitivity analysis of the equilibrium wholesale and retail prices, amount of profits of the plants and DCs and market shares of the chains with respect to the self-price effect.
In this part, we study the behavior of the equilibrium wholesale and retail prices, number of profits of the plants and DCs and market shares of the chains with respect to competition intensity (tilde{beta }) effect while the self-price parameter (tilde{delta }) is set to (EV tilde{delta }) = 0.03EV tilde{d}_{k} )).
Now we study the behavior of the equilibrium wholesale and retail prices, number of profits of the plants and DCs and market shares of the chains with respect to self-price effect while the competition intensity parameter is set to (EV beta ) = 0.05).
