Managing advertising investments in marketing channels

نویسندگان

چکیده

This paper investigates how should manufacturers optimally allocate resources to retailer-initiated (retailer) advertising through cooperative programs and own (manufacturer) in a bilateral monopoly. Retailer stimulates immediate sales but may also harm long-term (post-advertising) demand, whereas manufacturer aims at building brand equity both sales. A game-theoretic model which retailer set pricing decisions over two-period planning horizon is developed account for the differences between advertising. We characterize equilibrium solutions four scenarios manufacturer, ranging from no investment any activity undertaking supporting simultaneously. Comparing two players’ strategies profits across these scenarios, we find that avoid offering exclusively retailers. When positively influences sales, offer supports retailers addition their negatively affects can still undertake under certain conditions. However, if conditions are not met, focusing on best strategy. Retailers prefer advertise, choose participate manufacturers’ programs. leads suboptimal outcomes enhanced by additional incentives (e.g., side payments or other services).

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ژورنال

عنوان ژورنال: Journal of Retailing and Consumer Services

سال: 2022

ISSN: ['1873-1384', '0969-6989']

DOI: https://doi.org/10.1016/j.jretconser.2021.102852