Vertical Cooperative Advertising with Substitute Brands
Cooperative (co-op) advertising is attracting more and more attention. This paper analyzes co-op advertising behavior based on a dual-brand model with a single manufacturer and a single retailer, and some interesting conclusions are achieved. Firstly, the firm in the supply chain advertises both bra...
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2013-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2013/480401 |
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| _version_ | 1849396379523219456 |
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| author | You-Hua Chen Xiao-Wei Wen |
| author_facet | You-Hua Chen Xiao-Wei Wen |
| author_sort | You-Hua Chen |
| collection | DOAJ |
| description | Cooperative (co-op) advertising is attracting more and more attention. This paper analyzes co-op advertising behavior based on a dual-brand model with a single manufacturer and a single retailer, and some interesting conclusions are achieved. Firstly, the firm in the supply chain advertises both brands, and the difference of advertising expenditure is not very large in equilibrium. Secondly, the retailer's advertising and the manufacturer's participation ratios depend on both the retailer's and the manufacturer's marginal profits. Thirdly, the stimulating effect increases the advertising investment while the competition effect decreases it, but they have no effect on the manufacturer's participation ratio. Fourthly, co-op advertising is more sensitive to the manufacturer's marginal profits than those of the retailer. Lastly, total advertising investment and profit are greater under cooperative decision than under Stackelberg decision. |
| format | Article |
| id | doaj-art-b2d0ab5d22c2410bbcc35e212b3eb688 |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-b2d0ab5d22c2410bbcc35e212b3eb6882025-08-20T03:39:21ZengWileyJournal of Applied Mathematics1110-757X1687-00422013-01-01201310.1155/2013/480401480401Vertical Cooperative Advertising with Substitute BrandsYou-Hua Chen0Xiao-Wei Wen1College of Economics & Management, South China Agricultural University, Guangzhou 510642, ChinaCollege of Economics & Management, South China Agricultural University, Guangzhou 510642, ChinaCooperative (co-op) advertising is attracting more and more attention. This paper analyzes co-op advertising behavior based on a dual-brand model with a single manufacturer and a single retailer, and some interesting conclusions are achieved. Firstly, the firm in the supply chain advertises both brands, and the difference of advertising expenditure is not very large in equilibrium. Secondly, the retailer's advertising and the manufacturer's participation ratios depend on both the retailer's and the manufacturer's marginal profits. Thirdly, the stimulating effect increases the advertising investment while the competition effect decreases it, but they have no effect on the manufacturer's participation ratio. Fourthly, co-op advertising is more sensitive to the manufacturer's marginal profits than those of the retailer. Lastly, total advertising investment and profit are greater under cooperative decision than under Stackelberg decision.http://dx.doi.org/10.1155/2013/480401 |
| spellingShingle | You-Hua Chen Xiao-Wei Wen Vertical Cooperative Advertising with Substitute Brands Journal of Applied Mathematics |
| title | Vertical Cooperative Advertising with Substitute Brands |
| title_full | Vertical Cooperative Advertising with Substitute Brands |
| title_fullStr | Vertical Cooperative Advertising with Substitute Brands |
| title_full_unstemmed | Vertical Cooperative Advertising with Substitute Brands |
| title_short | Vertical Cooperative Advertising with Substitute Brands |
| title_sort | vertical cooperative advertising with substitute brands |
| url | http://dx.doi.org/10.1155/2013/480401 |
| work_keys_str_mv | AT youhuachen verticalcooperativeadvertisingwithsubstitutebrands AT xiaoweiwen verticalcooperativeadvertisingwithsubstitutebrands |