IDEAS home Printed from https://ideas.repec.org/a/wly/jnljam/v2013y2013i1n480401.html

Vertical Cooperative Advertising with Substitute Brands

Author

Listed:
  • You-Hua Chen
  • Xiao-Wei Wen

Abstract

Cooperative (co‐op) advertising is attracting more and more attention. This paper analyzes co‐op advertising behavior based on a dual‐brand model with a single manufacturer and a single retailer, and some interesting conclusions are achieved. Firstly, the firm in the supply chain advertises both brands, and the difference of advertising expenditure is not very large in equilibrium. Secondly, the retailer′s advertising and the manufacturer′s participation ratios depend on both the retailer′s and the manufacturer′s marginal profits. Thirdly, the stimulating effect increases the advertising investment while the competition effect decreases it, but they have no effect on the manufacturer′s participation ratio. Fourthly, co‐op advertising is more sensitive to the manufacturer′s marginal profits than those of the retailer. Lastly, total advertising investment and profit are greater under cooperative decision than under Stackelberg decision.

Suggested Citation

  • You-Hua Chen & Xiao-Wei Wen, 2013. "Vertical Cooperative Advertising with Substitute Brands," Journal of Applied Mathematics, John Wiley & Sons, vol. 2013(1).
    • Handle: RePEc:wly:jnljam:v:2013:y:2013:i:1:n:480401
    DOI: 10.1155/2013/480401
    as

    Download full text from publisher

    File URL: https://doi.org/10.1155/2013/480401
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2013/480401?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pradeep K. Chintagunta & Dipak Jain, 1992. "A Dynamic Model of Channel Member Strategies for Marketing Expenditures," Marketing Science, INFORMS, vol. 11(2), pages 168-188.
    2. Matthew Nagler, 2006. "An exploratory analysis of the determinants of cooperative advertising participation rates," Marketing Letters, Springer, vol. 17(2), pages 91-102, April.
    3. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2001. "Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 888-902.
    4. Karray, Salma & Zaccour, Georges, 2006. "Could co-op advertising be a manufacturer's counterstrategy to store brands?," Journal of Business Research, Elsevier, vol. 59(9), pages 1008-1015, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chuan Ding & Kaihong Wang & Xiaoying Huang, 2014. "Channels Coordination Game Model Based on Result Fairness Preference and Reciprocal Fairness Preference: A Behavior Game Forecasting and Analysis Method," Journal of Applied Mathematics, John Wiley & Sons, vol. 2014(1).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. He, Yi & Wang, Hang & Guo, Qiang & Xu, Qingyun, 2019. "Coordination through cooperative advertising in a two-period consumer electronics supply chain," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 179-188.
    2. 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.
    3. Xie, Jinxing & Wei, Jerry C., 2009. "Coordinating advertising and pricing in a manufacturer-retailer channel," European Journal of Operational Research, Elsevier, vol. 197(2), pages 785-791, September.
    4. 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.
    5. Gou, Qinglong & Shao, Jing & Wang, Xin & Yu, Lili, 2020. "Co-op supply chains with a local media company: Models and analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    6. Anshuman Chutani & Suresh Sethi, 2012. "Cooperative Advertising in a Dynamic Retail Market Oligopoly," Dynamic Games and Applications, Springer, vol. 2(4), pages 347-375, December.
    7. Juan Zhang & Qinglong Gou & Susan Li & Zhimin Huang, 2017. "Cooperative Advertising with Accrual Rate in a Dynamic Supply Chain," Dynamic Games and Applications, Springer, vol. 7(1), pages 112-130, March.
    8. Lu, Fuxiao & Tang, Wansheng & Liu, Guowei & Zhang, Jianxiong, 2019. "Cooperative advertising: A way escaping from the prisoner’s dilemma in a supply chain with sticky price," Omega, Elsevier, vol. 86(C), pages 87-106.
    9. Zhang, Juan & Gou, Qinglong & Liang, Liang & Huang, Zhimin, 2013. "Supply chain coordination through cooperative advertising with reference price effect," Omega, Elsevier, vol. 41(2), pages 345-353.
    10. Salma Karray & Chirag Surti, 2016. "Channel coordination with quantity discounts and/or cooperative advertising," International Journal of Production Research, Taylor & Francis Journals, vol. 54(17), pages 5317-5335, September.
    11. Pietro Giovanni & Maria Roselli, 2012. "Overcoming the drawbacks of a revenue-sharing contract through a support program," Annals of Operations Research, Springer, vol. 196(1), pages 201-222, July.
    12. Yang, Jing & Xie, Jinxing & Deng, Xiaoxue & Xiong, Huachun, 2013. "Cooperative advertising in a distribution channel with fairness concerns," European Journal of Operational Research, Elsevier, vol. 227(2), pages 401-407.
    13. Jørgensen, Steffen & Zaccour, Georges, 2014. "A survey of game-theoretic models of cooperative advertising," European Journal of Operational Research, Elsevier, vol. 237(1), pages 1-14.
    14. Gerhard Aust & Udo Buscher, 2016. "Game theoretic analysis of pricing and vertical cooperative advertising of a retailer-duopoly with a common manufacturer," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 127-147, March.
    15. Jianqiang Zhang & Weijun Zhong & Shue Mei, 2012. "Competitive effects of informative advertising in distribution channels," Marketing Letters, Springer, vol. 23(3), pages 561-584, September.
    16. Dridi, Dhouha & Ben Youssef, Slim, 2015. "A Game Theoretic Framework for Competing/Cooperating Retailers under price and advertising dependent demand," MPRA Paper 63317, University Library of Munich, Germany.
    17. Zhou, Yong-Wu & Li, Jicai & Zhong, Yuanguang, 2018. "Cooperative advertising and ordering policies in a two-echelon supply chain with risk-averse agents," Omega, Elsevier, vol. 75(C), pages 97-117.
    18. Nawel Amrouche & Guiomar Martín-Herrán & Georges Zaccour, 2008. "Feedback Stackelberg equilibrium strategies when the private label competes with the national brand," Annals of Operations Research, Springer, vol. 164(1), pages 79-95, November.
    19. Aust, Gerhard & Buscher, Udo, 2012. "Vertical cooperative advertising and pricing decisions in a manufacturer–retailer supply chain: A game-theoretic approach," European Journal of Operational Research, Elsevier, vol. 223(2), pages 473-482.
    20. Martín-Herrán, Guiomar & Sigué, Simon P., 2017. "An integrative framework of cooperative advertising: Should manufacturers continuously support retailer advertising?," Journal of Business Research, Elsevier, vol. 70(C), pages 67-73.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jnljam:v:2013:y:2013:i:1:n:480401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/4185 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.