Vertical Cooperative Advertising Ventures

Berger, Paul D.

doi:10.1177/002224377200900310

Cited by 108 publications

(75 citation statements)

References 4 publications

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“…Most studies to date on co-op advertising have focused on a relationship where the manufacturer is a leader and the retailer is a follower, which implies that the manufacturer dominates the retailer. The design and management is the main subject (see, for example, Crimmins, 1970Crimmins, & 1985 Berger, 1972; Dutta et al, 1995; Fulop, 1988; Somers, Gupta & Herriott, 1990; Roslow, Laskey & Nicholls, 1993; Young & Greyser, 1983; Bergen & John, 1997). Little attention in the literature has been given to the recent market structure in which retailers retain equal or more power than manufacturers do in retailing (Achenbaum & Mitchel, 1987; Buzzell et al, 1990; Fulop, 1988; Kumar, 1996).…”

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confidence: 99%

An Analysis of Manufacturer‐Retailer Supply Chain Coordination in Cooperative Advertising*

2002

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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 aresult, 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.

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An Analysis of Manufacturer‐Retailer Supply Chain Coordination in Cooperative Advertising*

2002

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“…To the best of our knowledge, Berger [14] was the first to discuss coop advertising in a vendor-retailer channel. Based on his work, many results were obtained under different coop advertising settings (see, e.g., [15][16][17]).…”

Section: Vmi System With Cooperativementioning

confidence: 99%

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Deng

Wan

2020

Mathematical Problems in Engineering

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Vendor managed inventory (VMI) is an improved sustainable inventory management system, but it is difficult to establish and solve an integrated Stackelberg game model under the complicated practical environment. In this paper, a bilevel programming model is proposed to formulate the VMI system by taking into account the uncertainty of demand, the competition among retailers, the cooperative advertising, the shortage and holding costs, and the practical constraints. For the established stochastic model being associated with continuously random demands, a deterministic mathematical program with complementarity constraints (MPCC) is first derived by expectation method and the first-order optimality conditions of the lower-level problem. en, with a partially smoothing technique, the MPCC is solved by transforming it into a series of standard smooth optimization subproblems. Finally, owing to complexity caused by evaluating the integrals with unknown decision variables in the objective function, an efficient algorithm is developed to solve the problem based on the gradient information of model. Sensitivity analysis has been employed to reveal a number of managerial implications from the constructed model and algorithm. (1) e participation rate depends on advertising expenditures from both the manufacturer and the retailer. ere exists an optimal threshold of participation rate for the manufacturer, which can be provided by the intersection point of the manufacturer and retailer's costprofit curves. (2) e manufacturer's advertising policy is less sensitive to uncertainty of demand than the change of the retailer's advertising policy. (3) e manufacturer in the VMI system should concern about the differences caused by symmetric or asymmetric retailers.

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“…The co-op advertising literature consists of relatively few quantitative studies. We can divide them into two categories: Static models (Berger 1972, Bergen and John 1997, Dant and Berger 1996, Kim and Staelin 1999, Huang et al 2002 and dynamic models , Jrgensen et al 2000, 2001, 2003, Karray and Zaccour 2005. We proceed to discuss these further.…”

Section: Background Literaturementioning

confidence: 99%

Cooperative advertising and pricing in a dynamic stochastic supply chain: Feedback Stackelberg strategies

Prasad

Sethi

2008

PICMET '08 - 2008 Portland International Conference on Management of Engineering &Amp; Technology

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C ooperative (co-op) advertising is an important instrument for aligning manufacturer and retailer decisions in supply chains. In this, the manufacturer announces a co-op advertising policy, i.e., a participation rate that specifies the percentage of the retailer's advertising expenditure that it will provide. In addition, it also announces the wholesale price. In response, the retailer chooses its optimal advertising and pricing policies. We model this supply chain problem as a stochastic Stackelberg differential game whose dynamics follows Sethi's stochastic sales-advertising model. We obtain the condition when offering co-op advertising is optimal for the manufacturer. We provide in feedback form the optimal advertising and pricing policies for the manufacturer and the retailer. We contrast the results with the advertising and price decisions of the vertically integrated channel, and suggest a method for coordinating the channel.

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Vertical Cooperative Advertising Ventures

Cited by 108 publications

References 4 publications

An Analysis of Manufacturer‐Retailer Supply Chain Coordination in Cooperative Advertising*

An Analysis of Manufacturer‐Retailer Supply Chain Coordination in Cooperative Advertising*

Partially Smoothing and Gradient-Based Algorithm for Optimizing the VMI System with Competitive Retailers under Random Demands

Cooperative advertising and pricing in a dynamic stochastic supply chain: Feedback Stackelberg strategies

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