Research On Advertising Decision Between Complementary Goods Enterprises Considering Spillover Effects

With the sustained and rapid growth of economy, enterprise's advertising investment increased year by year. But, enterprises make advertising decision only from their own point and this makes advertising promotions often fail to achieve the desired effects. So, enterprise should make advertising dicision by considering the impact of other market forces on advertising objectives and based on the full awareness of the impact of advertising on product sales. Complementary goods enterprise is an important market forces which impacts enterprise's advertising decisions. The spillover effects in sales promotion between complementary goods enterprises arising from the interrelated nature of complementary good can impact advertising decisions and expected prfits on advertising promotion investment of enterprises. So how to take full consideration of advertising spillover effects in the process of making advertising promotion decisions is a profound theoretical and realistic problem of ensuring advertising promotions invest to increase product sales and find potential customers and gaining competitive advantage in the intense competition environment.Based on the previous research works, we pursued an in-depth research on advertising decision between complementary goods enterprises by using game theory and economics of information theory.Firstly, acoording to the problem that enterprise selects free-riding behavior to obtain promotion results by using the advertising spillover effects of complementary enterprise in order to decrease advertising investment and risk and which will decrease complementary enterprise's advertising investment enthusiasm, the complementary goods enterprises'optimal strategies of total non-cooperative, partly cooperative and total cooperative cases were researched respectively. Additionally, the impact of advertising spillover effects on complementary goods enterprises sales promotion investment and profits was discussed, and the enterprises'profits from the sales promotion were compared. On the base of these, the implementation strategies of cooperative advertising were proposed.Secondly, Aimed at the spillover effects in advertising sales promotion between complementary goods enterprises arising from the interrelated nature of complementary goods, the cooperative advertising game model based on participate rate between the complementary goods enterprises was based. Based on the model, the complementary goods enterprises'optimal strategies and participate rate and profits and system benefits of Stackelberg game and Nash cooperative game were researched respectively. Additionally, the optimal advertising strategies and profits of complementary enterprises under two equilibriums were compared. The cooperative game equilibrium having more Pareto advantage than Stackelberg equilibrium was proved. Further, the surplus in advertising cooperation was distributed by Rubinstein bargaining model and obtained a Pareto cooperate scheme which can realize coordination of marketing system.Thirdly, considering the enterprise with demand information priority would use its priority send demand information selectively in order to stimulate complementary enterprise's advertising investment by using advertising investment as demand signal, signaling game theory model on advertising decision-making between complementary goods enterprises considering spillover effects was established. Based on the model, the condition of separating equilibrium and pooling equilibrium were obtained, and the optimal advertising strategies and profits of complementary enterprises under these two equilibriums were analyzed. Additionally, the advertising strategy choices of complementary enterprises were discussed.Lastly, Aimed at the rational betray problem of the enterprise with information superior in the process of cooperative advertising, the occurrence conditions of adverse selection of cooperative advertising relationship based on advertising participation rate were analyzed. On the base of these, by using mechanism design theory and revelation principle, in order to induce the manufacturer with information priority show its true demand information, an adverse selection model was constructed from the perspective of the manufacturer without information priority, and the cooperative advertising contract was designed. The results show that the contract can induce the manufacturer with information priority show its true demand information and can ensure the cooperative advertising relationship based on advertising participation rate between complementary enterprises and solve adverse selection problems in the process of complementary goods enterprises cooperative advertising.