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Optimal cooperative advertising integration strategy for organizations adding a direct online channel

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  • P D Berger

    (Boston University)

  • J Lee

    (Boston College)

  • B D Weinberg

    (Bentley College)

Abstract

Since the advent of the Web, retailers who served consumers offline (ie in stores or via catalogue) have grappled with how to effectively integrate the Internet into their marketing strategies and tactics. Clearly, how a firm elects to integrate the Internet into its retailing process, and how it coordinates offline and online strategic decisions, can impact its performance. In this paper, we examine integration decisions from a cooperative advertising perspective to determine the profitability of various integration strategies. We find that profit is greater when using a ‘partial-integration’ strategy rather than a ‘separation’ strategy; moreover, we find that profit is yet greater when using a ‘full-integration’ strategy rather than a ‘partial-integration’ strategy.

Suggested Citation

  • P D Berger & J Lee & B D Weinberg, 2006. "Optimal cooperative advertising integration strategy for organizations adding a direct online channel," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(8), pages 920-927, August.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:8:d:10.1057_palgrave.jors.2602069
    DOI: 10.1057/palgrave.jors.2602069
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    References listed on IDEAS

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    Cited by:

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    2. Yan, Ruiliang & Wang, John & Zhou, Bin, 2010. "Channel integration and profit sharing in the dynamics of multi-channel firms," Journal of Retailing and Consumer Services, Elsevier, vol. 17(5), pages 430-440.
    3. Paul D Berger, 2016. "One man’s path to marketing analytics," Journal of Marketing Analytics, Palgrave Macmillan, vol. 4(1), pages 1-13, March.
    4. SeyedEsfahani, Mir Mehdi & Biazaran, Maryam & Gharakhani, Mohsen, 2011. "A game theoretic approach to coordinate pricing and vertical co-op advertising in manufacturer-retailer supply chains," European Journal of Operational Research, Elsevier, vol. 211(2), pages 263-273, June.
    5. Haoyu Liu & Shulin Liu, 2019. "Considering In-App Advertising Mode, Platform-App Channel Coordination by a Sustainable Cooperative Advertising Mechanism," Sustainability, MDPI, vol. 12(1), pages 1-28, December.
    6. Tagashira, Takumi & Minami, Chieko, 2019. "The Effect of Cross-Channel Integration on Cost Efficiency," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 68-83.
    7. Aust, Gerhard & Buscher, Udo, 2014. "Cooperative advertising models in supply chain management: A review," European Journal of Operational Research, Elsevier, vol. 234(1), pages 1-14.
    8. Melis, Kristina & Campo, Katia & Breugelmans, Els & Lamey, Lien, 2015. "The Impact of the Multi-channel Retail Mix on Online Store Choice: Does Online Experience Matter?," Journal of Retailing, Elsevier, vol. 91(2), pages 272-288.
    9. Weinberg, Bruce D. & Parise, Salvatore & Guinan, Patricia J., 2007. "Multichannel marketing: Mindset and program development," Business Horizons, Elsevier, vol. 50(5), pages 385-394.
    10. Guilan Yan & Yi He, 2020. "Coordinating pricing and advertising in a two-period fashion supply chain," 4OR, Springer, vol. 18(4), pages 419-438, December.
    11. Cao, Lanlan & Li, Li, 2015. "The Impact of Cross-Channel Integration on Retailers’ Sales Growth," Journal of Retailing, Elsevier, vol. 91(2), pages 198-216.
    12. Hu, Xiaojian & Qiu, Ju & Zhao, Ju & Li, Yang, 2023. "Can in-store recommendations for online-substitutive products integrate online and offline channels?," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    13. Neslin, Scott A. & Shankar, Venkatesh, 2009. "Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 70-81.
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    15. Mirzabeiki, Vahid & Saghiri, Soroosh Sam, 2020. "From ambition to action: How to achieve integration in omni-channel?," Journal of Business Research, Elsevier, vol. 110(C), pages 1-11.

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