Abstract: Customers often evaluate products at a traditional retailer to identify their "best-fit" product but buy it for a lower price at an electronic channel. This transfer behavior by customers is referred to as "showrooming" and this is attracting increased attention both in business practice and in academic literature. According to this phenomenon, this research develops and evaluates a model of adaptive pricing strategy of dual channel supply chain, which consists of a manufacturer with electronic channel and a traditional channel retailer. A differentiation pricing strategy is first proposed by consumer utility theory. Taking the differentiation pricing strategy as the reference, the consistent pricing strategy and the limited pricing strategy are designed and these pricing strategies can eliminates the showrooming phenomenon. The game-theoretic framework and numerical simulation are used to analyze the three different pricing strategy in order to determine optimal pricing strategies for each player of dual channel supply chain under showrooming. The results show that compared with the differentiation pricing strategy, the consistent pricing strategy can reduce the price competition between the traditional channel and the electronic channel, and is always beneficial to the retailer. However, the consistent pricing strategy will also benefit manufacturers when traditional channel ha higher trouble costs and lower wholesale prices. In addition, whether the members of dual channel supply chain then choose to limited pricing strategy depends on price differentials between traditional and electronic channels and the manufacturer and retailer's profits increase with the decrease of the price differentials. Especially when the price differentials is relatively small, the limited pricing strategy can effectively reduce the price competition, thereby promoting dual channel supply chain members to achieve a win-win situation. Collectively, three compelling pricing strategies of the commonly witnessed practice among the members of dual channel supply chain are offered and can be used for reference to manufacturer and retailer.

Key words: dual channel supply chain, price competition, pricing strategy, showrooming