Optimal advertising decisions for promoting retail and online channels in a dynamic framework

Sayadi, Mohammad Kazem; Makui, Ahmad

doi:10.1111/itor.12061

Cited by 17 publications

(14 citation statements)

References 43 publications

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“…The advertising campaign is in the charge of the dominant retailer in our study. This assumption is supported and applied by numerous studies in marketing and operations management, such as Bolton and Shankar (2003), De Giovanni (2011), Liu et al (2014), and Sayadi and Makui (2014a). The advertising effort of the retailer at time t is a(t).…”

Section: Model Developmentmentioning

confidence: 91%

Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Zhang

2017

Int Trans Operational Res

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Supply chain contracts are widely considered as useful and necessary tools to guide and restrict channel members' behaviors. Considering the effect of dynamic advertising, we investigate two distinct types of contracts between a dominant retailer and her manufacturer. One contract is a traditional wholesale price contract and the other is a consignment contract. The results show that, compared to the wholesale price contract, the consignment contract is always more desirable from the perspectives of the retailer and the entire channel and brings more consumer surplus. When the dominant retailer's advertising effort is very effective or channel members have enough patience, the dominant retailer and the manufacturer can achieve a Pareto improvement under the consignment contract; otherwise the manufacturer prefers the wholesale price contract.

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Section: Model Developmentmentioning

confidence: 91%

Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Zhang

2017

Int Trans Operational Res

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“…With respect to marketing effort, we refer interested readers to Taylor (), Liu et al. (), Sayadi and Makui (), Dai and Meng (), and Pal et al. ().…”

Section: Introductionmentioning

confidence: 99%

Coordination in a retailer‐dominated supply chain with a risk‐averse manufacturer under marketing dependency

Huang

Qian

2018

Int Trans Operational Res

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In this paper, a combined contract composed of option and cost sharing is proposed to investigate coordination and risk‐sharing issues of the supply chain consisting of a dominant retailer and a risk‐averse manufacturer. Demand faced by the retailer is stochastic in nature and dependent on marketing effort. We adopt the conditional value‐at‐risk (CVaR) criterion to model risk aversion of the manufacturer, and derive the optimal strategy for each member with a Stackelberg game in which the retailer acts as the leader. It is verified that the combined contract can coordinate the supply chain and achieve Pareto‐improvement. Moreover, the dominant retailer can allocate the system‐wide profit arbitrarily only by option price in the premise of coordination. It is worth mentioning that coordination of the supply chain is reachable only when the manufacturer is low in risk aversion, and the manufacturer's risk aversion is a significant element for contract design and profit allocation.

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“…Some scholars have focused on different sourcing channel structures. Some of the previous research on this subject was from the perspective of the difference between online and offline channels or the difference between online retailers and platforms [50][51][52][53]. The differences between channels in traditional environments and production capacity sharing environments have also been studied.…”

Section: Literature On Channel Selection and Pricing Strategiesmentioning

confidence: 99%

Channel Selection and Pricing Decisions Considering Three Charging Modes of Production Capacity Sharing Platform: A Sustainable Operations Perspective

et al. 2019

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In the context of sharing economy, a manufacturer can source from two alternative channels: sharing and traditional, when facing production capacity constraints and sustainably conscious consumers. The aim of the paper is to analyze channel selection and pricing strategies of the manufacturer for achieving sustainable operations, to investigate the operations of the platform regarding charging modes, access requirements, and commission rates in different stages of development, and to discuss the interaction among all stakeholders for sustainability in the whole system. The game-theoretic approach is adopted. The results provide references for decisions of the manufacturer and surplus production capacity supplier to join in the sharing, as well as corresponding optimal pricing strategies, which guides platforms to keep a balance between profitability and attracting participants by relatively low access requirements and commission rates. Moreover, developing platforms prefer to charge suppliers and set low access requirements while relatively developed platforms tend to charge bilateral sides or manufacturers and set high access requirements. Charging the manufacturer encourages the bilateral participation of the platform most. In addition, as charging mode changes, the trend of changes in consumer surplus and social welfare is the same as that in the market share of products from the sharing channel.More specifically, from the perspective of actual operations, production capacity sharing brings new directions to sustainable supply chain management issues. For example, as consumers have become more sustainably concerned [16,17], production capacity sharing on the platforms is an effective alternative for manufacturing enterprises to ensure competitive advantage by meeting demands of the market, reduce their risk of wasting capacity, no longer face with the selection limitations, optimize business scheduling, and gain new revenue streams [13]. However, production capacity sharing mechanism design considering sharing features is challenging. For example, a capacity-constrained manufacturer or an overcapacity supplier needs to decide whether to join in the sharing considering the cost of the sharing and consumer's consciousness of sustainability comprehensively. In addition, a platform operator needs to design appropriate operational mechanisms particularly the charging mechanisms to balance the relationship between attracting participants of the platform and gaining profits, considering its own development levels and operational goals. Therefore, with regards to production capacity sharing, how to make channel selection decisions and corresponding optimal pricing strategies for manufacturing enterprises and how to design operational mechanisms for platforms from a sustainable operations perspective is important, urgent, and promising. In other words, the aims of this paper are to explore the behaviors of the overcapacity manufacturer and capacity supplier in traditional and sharing manufacturing environments and the ...

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Optimal advertising decisions for promoting retail and online channels in a dynamic framework

Cited by 17 publications

References 43 publications

Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Coordination in a retailer‐dominated supply chain with a risk‐averse manufacturer under marketing dependency

Channel Selection and Pricing Decisions Considering Three Charging Modes of Production Capacity Sharing Platform: A Sustainable Operations Perspective

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