Deciding online and offline sales strategies when service industry customers express fairness concerns

In recent years the range of channels for customers to acquire products has generally expanded. The Smart-X system plays an essential role in pricing strategies, as fairness concerns could impact the price significantly. When customers in the BM store have concerns, the firm is induced to lower product price in the store, resulting in total profit reduction. When customers do not have fairness concerns, it is always better for the firm to operate in dual channels. Additionally, we demonstrate that a range of service cost coefficients exist, and, within certain ranges, these may inhibit the firm from upgrading service levels.