Managing advertising investments in marketing channels

Karray, Salma; Martín‐Herrán, Guiomar; Sigué, Simon Pierre

doi:10.1016/j.jretconser.2021.102852

Cited by 15 publications

(5 citation statements)

References 41 publications

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“…Therefore, frequent use of promotions, particularly those involving price reductions, may negatively impact a manufacturer's long-term brand goodwill. This assumption is also adopted by existing studies, such as Blom et al, Huang and Bai, Jørgensen et al, and Karray et al [6,17,22,26]. The negative influence brought by promotional activities on brand goodwill is called the goodwill erosion effect.…”

Section: Cooperative Advertisingmentioning

confidence: 97%

Online retail platform cooperative promotion strategies with manufacturer competition

Huang,

Yan

2024

JIMO

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This study delved into the dynamics of cooperative sales promotion between a retail platform and its manufacturer suppliers. It was observed that retail platforms were increasingly inclined to collaborate with manufacturers on sales promotion initiatives, such as nationwide advertising campaigns, to enhance brand development. Adopting a differential game model, this paper investigated the retail platform's strategic decision regarding participation in cooperative promotions in scenarios ranging from monopoly to duopoly among manufacturers. The findings revealed that the platform's willingness to engage in cooperative promotions was significantly influenced by the commission fee, with the platform opting for such promotions only when the commission fee surpassed a critical threshold. Additionally, the study shed light on how the intensity of upstream competition shapes the platform's stance on cooperative promotions. Notably, the platform adopted a more lenient policy in a low-competition environment and a more stringent one in the face of heightened competition. This study contributed to the existing body of literature by addressing a gap in the understanding of cooperative promotion and advertising dynamics within the context of modern retail platforms and their supply chains, complementing the predominantly studied traditional reselling supply chains.

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Section: Cooperative Advertisingmentioning

confidence: 97%

Online retail platform cooperative promotion strategies with manufacturer competition

Huang,

Yan

2024

JIMO

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“…[ 42 ], and the Stackelberg game method is also widely used in various fields of supply chain research, so many scholars have used the Stackelberg game method to determine the optimal cooperative advertising strategy [ 43 – 45 ]. Karray et al [ 46 ] made an in-depth comparison of the impact of cooperative advertising on suppliers’ profits, and provided practical help for suppliers’ choice of cooperative advertising strategies.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on cooperative advertising strategies for dual channel supply chain of fresh agricultural products considering carbon reduction efficiency under retailer leadership

Wang,

Zhu,

et al. 2024

PLoS ONE

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With the development of low-carbon economy and the dominant position of retailers, through the establishment and comparison of three cooperative advertising models: model of supplier’s independent advertising, model of supplier’s independent advertising and model of retailer’s and supplier’s cooperative advertising, this paper studies the cooperative advertising decision-making of fresh agricultural products supply chain with two channels, and the demand of both channels is affected by the level of advertising investment, the proportion of advertising cost sharing and the efficiency of carbon emission reduction. The results show that when supplier and retailer adopt the two-way cooperative advertising mode, the demand and profit level of the two channels reach the optimal level. Numerical analysis shows that carbon emission reduction efficiency has an important impact on profits and market demand, which is closely related to cooperative advertising strategy.

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“…In typical cooperative advertising programs, manufacturers reimburse a percentage of advertising expenses that retailers incur to advertise their products. The popularity of these programs has dramatically increased in recent years (Karray et al, 2022). The second type of collaboration occurs with manufacturing supply chains that typically consist of smaller manufacturers and relatively larger retailers.…”

Section: Advertisingmentioning

confidence: 99%

Advertising fee as a new supply chain coordination approach between hotels and online travel agencies

Chen

2023

JHTI

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PurposeChannel coordination has become an essential part of researching hotel supply chain management practices. This paper develops an improved channel coordination approach to coordinate the profit distribution between hotels and online travel agencies (OTAs) achieved through an introduction of advertising fees. This direction further improves the decentralization of cooperation and achieves Pareto improvement to achieve mutual profitability.Design/methodology/approachThe methodology used in this study involves Stackelberg game theory employed for the decision-making and analysis of both the hotel and OTA. The OTA, acting as the leader, offers a hotel a contract specifying the commission rate that the hotel will pay to the respective OTA. The hotel, acting as a follower, sets a self-interested room rate as a given response. A deterministic, price-sensitive linear demand function is utilized to derive possible analytical solutions once centralized, noncooperative decentralization and cooperative decentralized channel occurs.FindingsResults show that a new channel coordination approach is possible, namely via advertising fees. Prior to channel coordination, the OTA tends to set a higher commission rate, and the hotel sets a higher room rate in response under noncooperative decentralization. As such, this results in a lower channel-wide profit for all. One way to reduce channel-wide profit loss is to use a method of cooperative decentralization, which can, and will result in optimal profit as centralization takes place. However, the lack of incentives makes cooperative decentralization unfeasible. Further improvement is possible by using advertising fees based on a cooperative decentralization agreement, which can reach Pareto improvement.Practical implicationsThis paper helps the OTA industry and hotel owners cooperate by way of smoother coordination. This study provides practitioners with two important practical implications. The first one is that the coordination between the hotel industry and OTA through cooperative decentralization allows for the achievement of higher profitability than that of noncooperative decentralization. The second one is that this paper solves the outstanding problem of insufficient incentives characteristic of cooperative decentralization by means of an advertising fee as a new supply chain coordination approach.Originality/valueThis paper offers both the problem and solution regarding the lack of incentives that hamper cooperative decentralization without the use of advertising fees. This paper is unique in that it derives analytical solutions regarding commissions levied in a typical hotel supply chain under noncooperative decentralization.

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Managing advertising investments in marketing channels

Cited by 15 publications

References 41 publications

Online retail platform cooperative promotion strategies with manufacturer competition

Online retail platform cooperative promotion strategies with manufacturer competition

Research on cooperative advertising strategies for dual channel supply chain of fresh agricultural products considering carbon reduction efficiency under retailer leadership

Advertising fee as a new supply chain coordination approach between hotels and online travel agencies

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