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O2O dual-channel sales: Choices of pricing policy and delivery mode for a restaurant

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  • Du, Zhong
  • Fan, Zhi-Ping
  • Sun, Fenghao

Abstract

In reality, we can see that many restaurants adopt O2O dual-channel sales to meet the demands of consumers.For the dual-channel sales, the restaurants have two pricing policies to choose from, namely, uniform pricing and differential pricing.For the online channel sales, the restaurants have two delivery modes to choose from, namely, self-delivery and platform delivery.It is worth paying attention to whether the restaurants should adopt the uniform pricing or the differential pricing, and choose the self-delivery or the platform delivery.This paper studies the choices of pricing policy and delivery mode for a restaurant.For the four scenarios of the choices of pricing policy and delivery mode, the profit maximization models of the restaurant are developed, and the optimal results are obtained by solving the models.Through the comparative analysis of the restaurant's profits in the four scenarios, several important findings are obtained: It is always beneficial for the restaurant to adopt the differential pricing policy.In addition, the restaurant should choose the self-delivery mode when the potential market size of the online channel and the consumers' sensitivity to the price difference between the two channels are small, otherwise, the restaurant chooses the platform delivery mode.

Suggested Citation

  • Du, Zhong & Fan, Zhi-Ping & Sun, Fenghao, 2023. "O2O dual-channel sales: Choices of pricing policy and delivery mode for a restaurant," International Journal of Production Economics, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:proeco:v:257:y:2023:i:c:s0925527322003486
    DOI: 10.1016/j.ijpe.2022.108766
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    Cited by:

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    2. Gong, Canran & Song, Huaming & Chen, Daqiang & Day, Steven James & Ignatius, Joshua, 2024. "Logistics sourcing of e-commerce firms considering promised delivery time and environmental sustainability," European Journal of Operational Research, Elsevier, vol. 317(1), pages 60-75.
    3. Cao, Kaiying & Xu, Yuqiu & Hua, Ye & Choi, Tsan-Ming, 2023. "Supplier or co-optor: Optimal channel and logistics selection problems on retail platforms," European Journal of Operational Research, Elsevier, vol. 311(3), pages 971-988.
    4. T. M. Rofin & Sreejith Alathur, 2024. "Optimal online channel configuration for a Manufacturer under price and lead time-sensitive demand," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(2), pages 121-139, April.
    5. Huixian Ma & Jiqing Xie & Debao Dai & Jiaping Xie, 2024. "Pricing Strategies for O2O Catering Merchants Considering Reference Price Effects and Unconditional Coupons," Sustainability, MDPI, vol. 16(20), pages 1-29, October.
    6. He, Peng & Shang, Qi & Chen, Zhen-Song & Mardani, Abbas & Skibniewski, Miroslaw J., 2024. "Short video channel strategy for restaurants in the platform service supply chain," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    7. Ma, Shigui & He, Yong & Gu, Ran & Yeh, Chung-Hsing, 2024. "How to cooperate in a three-tier food delivery service supply chain," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    8. Pei-Ju Wu, 2023. "O2O switching determinants and successful drivers in omnichannel retailing services," Service Business, Springer;Pan-Pacific Business Association, vol. 17(3), pages 771-788, September.
    9. Du, Zhong & Fan, Zhi-Ping & Chen, Zhongwei, 2023. "Implications of on-time delivery service with compensation for an online food delivery platform and a restaurant," International Journal of Production Economics, Elsevier, vol. 262(C).
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