Inter-organizational contract control of advertising strategies in the supply chain

<p style='text-indent:20px;'>Advertising has a crucial impact on product's goodwill. To further improve goodwill and make more profit, member firms in the supply chain use various contracts to coordinate channel. Considering dynamic effect of advertising, this paper studies two-level consisting one manufacturer retailer. The two members focus maximizing their profits through advertising pricing strategies under types contracts: wholesale price contract consignment contract. Stackelberg differential game is introduced, optimal effort, retail situations are studied. Numerical examples sensitivity analyses conducted explore models further. results show that retailer's revenue proportion according consumers significantly affect choice partner chain. A too high or low may lead selection conflict between firms. However, when care about goodwill, can be weakened.</p>