RT info:eu-repo/semantics/article
T1 Cooperative Advertising for Competing Manufacturers: The Impact of Long-Term Promotional Effects
A1 Karray, Salma
A1 Martín Herrán, Guiomar
A1 Sigué, Simon-Pierre
AB The effectiveness of cooperative advertising programs is studied in a market wheretwo competing manufacturers deal with an exclusive retailer and two products. Two twostagegame theoretic models are developed to analyze the long-term effects of retailer’spromotions, which can be positive or negative, on the effectiveness of cooperative advertising.Closed-form equilibrium solutions are obtained and compared. We find thatthe level of product substitutability and the sign and magnitude of the long-term effectsof retailer’s promotions on sales determine whether cooperative advertising should beoffered and accepted by the manufacturers and retailer. In particular, depending onthe level of product substitutability, cooperative advertising can benefit both the manufacturersand retailer even when retailer’s promotions negatively affects future sales.Conversely, it may not be in the interest of the manufacturers to offer cooperative advertisingwhen the products are fairly undifferentiated regardless of the nature of the long-term effects of promotions. Finally, the manufacturers and retailer may refuse torespectively offer or participate in cooperative advertising programs that enhance totalchannel profits.
YR 2017
FD 2017
LK http://uvadoc.uva.es/handle/10324/27731
UL http://uvadoc.uva.es/handle/10324/27731
LA eng
NO International Journal of Production Economics 184, 21-32, 2017.
NO Producción Científica
DS UVaDOC
RD 19-may-2024