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Chinese Journal of Management Science ›› 2020, Vol. 28 ›› Issue (9): 176-187.doi: 10.16381/j.cnki.issn1003-207x.2020.09.018

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Cooperative Advertising Models in Supply Chains with Online Platform

GAO Dan1, WANG Yi-bao2, CHEN Jing-wen3   

  1. 1. School of Management, Huazhong University of Science and Technology, Wuhan 430000, China;
    2. School of Economics and Business Administration, Chongqing University, Chongqing 400044, China;
    3. School of business administration, Zhongnan University of Economics and Law, Wuhan 430000, China
  • Received:2018-08-21 Revised:2019-04-23 Online:2020-09-20 Published:2020-09-25

Abstract: Opening online direct marketing channels through the online retail platforms has been a common model for manufacturer, more and more consumers purchase products or services through online channel. Except pricing, advertising promotion is another one among the most important marketing strategies for manufacturer or retailer to stay competitive in the market, for example, online retail platform and traditional retailer invest great amount advertisement to attract consumers. In the traditional supply chain, the manufacturer often shares part of the retailer'sadvertising cost to encourage the retailer improve advertisement level then to improve profit.In order to explore which is the best partner for manufacturer in cooperative advertising activity when manufacturer confront online platform and retailer, four different cooperative advertising strategies are established in this paper: non-cooperation strategy, manufacturer only cooperate with traditional retailers,manufacturer only cooperate with online retail platform and manufacturer cooperating with retailer and online platform at the same time. By comparing the optimal decisions and member's profitin different strategies, the following results are obtained: 1) The optimal strategy for manufacturerimply that manufacturer should bearsome advertising cost for online retailer platform and offline retailer; 2) The optimal strategy is consistent among channel members when there is "free-rider" behavior inretailer andonline platform's advertising; 3) When there exist competition between two advertising effect, the optimal strategy of online platform (traditional retailers) advocate online platform(retailer) cooperate with manufacturer, under this strategy, the retailer and online platform's profit will decrease at a minimal degree.

Key words: online retailer platform, dual-channel, cooperative advertising strategy

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