An analysis of manufacturer-retailer supply chain coordination in cooperative advertising

Huang, Z and Li, S X and Mahajan, V (2002) An analysis of manufacturer-retailer supply chain coordination in cooperative advertising. Decision Sciences, 33 (3).

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Abstract

In the literature of cooperative (co-op) advertising, the focus of the research is on a relationship in which a manufacturer is the leader and retailers are followers. This relationship implies the dominance of the manufacturer over retailers. Recent market trends have shown a shift in power from manufacturers to retailers. Retailers, as a result, may now possess equal or even greater power than a manufacturer in some instances when it comes to retailing. Based on this new market phenomenon, we intend to explore the role of co-op advertising in a manufacturer-retailer supply chain through brand name investments, local advertising expenditures, and sharing rules of advertising expenses. Two co-op advertising models are developed and compared. The first co-op advertising model is based on the traditional leader-follower relationship of a manufacturer and a retailer. The second model incorporates partnership into co-op advertising coordination. Business examples and managerial implications of the models have been discussed. A cooperative bargaining technique is utilized to implement the partnership co-op advertising model.

ISB Creators:
ISB CreatorsORCiD
Mahajan, VUNSPECIFIED
Item Type: Article
Subjects: Marketing
Operations Management > Supply Chain Management
Depositing User: LRC ISB
Date Deposited: 21 Oct 2014 06:31
Last Modified: 20 Nov 2014 09:53
URI: http://eprints.exchange.isb.edu/id/eprint/7
Publisher URL: http://dx.doi.org/10.1111/j.1540-5915.2002.tb01652...
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