When should a retailer invest in brand advertising?

Nikolaos Pnevmatikos, Baris Vardar and Georges Zaccour

European Journal of Operational Research, 2018, vol. 267, issue 2, 754-764

Abstract: We consider a dynamic marketing channel comprising of one manufacturer and one retailer, where consumer demand depends on price and on brand reputation. We investigate two scenarios. In the first one, the retailer may also invest in brand advertising, while in the second, it does not. Comparing the results of the two scenarios yields interesting insights into the impact of the retailer’s brand advertising. Findings include that when the retailer invests in the brand’s reputation, both players achieve higher profits and the consumer obtains a higher surplus. This gives the retailer’s brand advertising a (partial) channel coordination flavor, a result that has never before been reported in the literature.

Keywords: OR in marketing; Marketing channels; Advertising; Differential games; Brand reputation (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221717310718
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:267:y:2018:i:2:p:754-764

DOI: 10.1016/j.ejor.2017.11.060

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().