Market segmentation strategy in supply chain considering price and quality dependent demand

In this paper, we consider a supply chain which is consisted of a manufacturer and a retailer in which customer demand is depended on retailer price and product quality degree.First of all, the optimal price and quality degree in centralized and decentralized chain is found. Then, to make the profit ofdecentralized chain close to centralized one, we investigate market segmentation circumstances to price oriented and quality oriented customer and also pricing and determination of optimum quality degree for every part of market. stackelberg equilibrium is used to solve the model. As a result, customer demands and chain profit increase.

Keywords:

supply chain , markl!t segmentation , pricing , quality degree