Differentiated products combination pricing strategy in supply chain

The pricing strategy of differentiated products in supply chain was studied in the paper. Firstly, we developed a two-stage differentiated products supply chain model. By building Nash game model, we got the Nash equilibrium solution to manufacturer and retailer's product pricing strategy. The existence of the unique Nash equilibrium solution was proved. By using numerical simulation to analyze the combination pricing strategy of differentiated products, we got the laws of changes in combination pricing strategy, manufacturer's profits and retailer's profits with the variety of product cost, management cost, and the parameters of market demand. The result is consistent with economics principle.