Incentive Strategies for Shelf-Space Allocation in Duopolies

Guiomar Martin-Herran and Sihem Taboubi

Chapter Chapter 12 in Dynamic Games: Theory and Applications, 2005, pp 231-253 from Springer

Abstract: Abstract We examine the issue of shelf-space allocation in a marketing channel where two manufacturers compete for a limited shelf-space at a retail store. The retailer controls the shelf-space to be allocated to brands while the manufacturers make advertising decisions to build their brand image and to increase final demand (pull strategy). Manufacturers also offer an incentive designed to induce the retailer to allocate more shelf-space to their brands (push strategy). The incentive takes the form of a shelf dependent display allowance. The problem is formulated as a Stackelberg differential game played over an infinite horizon, with manufacturers as leaders. Stationary feedback equilibria are computed, and numerical simulations are carried out in order to illustrate how channel members should allocate their marketing efforts.

Keywords: Incentive Strategy; Retail Store; Dynamic Game; Brand Image; Stackelberg Game (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-0-387-24602-4_12

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DOI: 10.1007/0-387-24602-9_12

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