Coordination through cooperative advertising in a two-period consumer electronics supply chain

Yi He, Hang Wang, Qiang Guo and Qingyun Xu

Journal of Retailing and Consumer Services, 2019, vol. 50, issue C, 179-188

Abstract: Firms in the consumer electronics industry frequently launch new styles of their products, which leads to a “two-period†phenomenon in their product sales. Only a few published articles have considered two-period models in cooperative advertising. This paper investigates co-op advertising strategies in a two-period supply chain consisting of a single manufacturer and a single retailer. Utilizing game theory, we consider two different scenarios: a decentralized scenario with a cooperative advertising program and an integrated scenario. Aside from these scenarios, we propose a supply chain contract to coordinate this supply chain system. This paper has the following conclusions: (i) the manufacturer usually does not provide the same advertising subsidy strategy for the two generation products in the same period; (ii) the manufacturer may provide a low subsidy rate to the retailer if the advertising long-term effect is strong; and (iii) we demonstrate that the two-way subsidy contract can achieve a perfect supply chain coordination if a transfer payment exists.

Keywords: Cooperative advertising; Two-period; Game theory; Supply chain coordination (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:50:y:2019:i:c:p:179-188

DOI: 10.1016/j.jretconser.2019.05.010

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