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Optimization of Coordinated Distribution System by Adopting the Network Marketing and Traditional Channel

Shafiei, Mahdi | 2017

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  1. Type of Document: Ph.D. Dissertation
  2. Language: Farsi
  3. Document No: 50871 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres, Mohammad
  7. Abstract:
  8. Nowadays network marketing has promoted marketing, sale and customer relationship altogether. On the other hand, due to the growth of internet, network marketing has become a powerful and attractive channel that can be utilized alongside the other traditional channel. Pricing and network marketing structure influences on distribution system coordination and networker motivation in network marketing. This thesis provides a framework to study the integration of network marketing with retailers in a dual channel distribution system and provide the pattern for determining the different variables of distribution systems, including of product price in diverse channels, commission payment to networkers and confidence level of customer simultaneously. We also examine different scenarios of dual distribution systems, centralized, decentralized and full decentralized operation of network marketing. In the centralized scenario, retailer channel and network marketing managed via manufacturer integrally. In decentralized scenario, manufacturer is owner of network marketing but the retailer channel decides independently, while in full decentralized scenario all parties of distribution system consist of manufacturer, retailer channel as well as network marketing act separately. Furthermore, to enforce the decentralized system we also investigate revenue or profit sharing for all parties involved (manufacturer; retailer and network marking distributers). Among the scenarios, it is determined which scenario is more suitable for network marketing in the distribution system and how much the product delivery price is in the distribution channels. Network marketing members take commission from distributers of various layer of network marketing which is not the same in different layers. We apply a game model to globally optimize the pricing system and determine important variables of network marketing structure such as commission coefficient that paid to the different layers of network marketing and confidence level, concurrently. Problem rewriting method is utilized to optimize the system and determine the important variables. Our proposed approach is also illustrated through numerical examples
  9. Keywords:
  10. Game Theory ; Pricing ; Coordination ; Distribution System ; Network Marketing

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