Authors
Salma Karray, Saman Hassanzadeh Amin
Publication date
2015/1/2
Journal
International Journal of Production Research
Volume
53
Issue
1
Pages
88-105
Publisher
Taylor & Francis
Description
This research assesses the effects of cooperative (coop) advertising in a channel with competing retailers considering both advertising and pricing as decision variables. We develop a game-theoretic model and provide equilibrium solutions for two games. In Game 1, the manufacturer and the retailers do not use cooperative advertising (status quo); and in Game 2, coop advertising is implemented. We also obtain optimal solutions for the case where the channel is coordinated. Contrary to the results provided for one-manufacturer, one-retailer channels, we find that coop advertising may not be profitable for the retailers or for the channel, especially when the market is characterised by low levels of price competition and high advertising competition between retailers. Although it benefits the manufacturer, the total effect of cooperative advertising on the channel profit might be negative under such conditions. The …
Scholar articles
S Karray, SH Amin - International Journal of Production Research, 2015