The Differential Game Analysis Of Vertical Cooperative-Promotions And The Design Of Business Policy

With the emergence of product homogeneity and the saturation of market carry-capacity demand, the contention of encircling the terminal market becomes tense and impetuous. Under the dual stress of market status and profit, the corporation pursues the promotion mode of realizing win-win or poly-win on basis of cooperation. Be a win-win behavior in the commercial contention, cooperative promotion is being adopted widely and accepted generally. Cooperative promotion's distinct characteristic is that the corporation obtains the maximum of promotion benefit by dint of corporation external resource. Successful cooperative promotion is able to realize the complementary-advantage of resource, build up the capability of market exploitation and contention, achieve long-term or short-term symbiosis, exploit and utilize jointly market opportunity. The paper analyses concretely the win-win intrinsic mechanism of the cooperative promotion between the manufacturer and the dealer, and discusses practically how the corporation sets down reasonable business policy in order to ensure the successful implement of cooperative promotion practically. Firstly, the paper introduces type, function and the principle of decision-making etc. of cooperative promotion. Secondly, analyses emphatically the win-win intrinsic mechanism of the cooperative promotion. Respectively analyses two situations which excessive dealer promotions will enhance and damage the image of the manufacturer's brand, by use of differential game theory. Through of constructing two model of differential game of non-cooperative promotion and cooperative promotion, calculating the model of differential games and comparing the equilibrium results, we conclude the whole channel profit of cooperative promotion is greater than that of non-cooperative promotion in these two situations. We put forward that if the manufacturer offers support for the dealer's promotion, Pareto-improving is feasible. That manufacturer offers support ratio for the dealer's promotion is an important measure which affects dealer's enthusiasm and harmonizes everyone's benefits and relations in cooperative promotion, it is key factor which decide the success of cooperative promotion. By establishing reasonable business policy in order to control the support ratio, the manufacturer may stimulate effectively dealer's enthusiasm and ensure the successful implement of cooperative promotion. Subsequently, the paper illuminates the rebate in business policy, from angle of ensuring the successful implement of cooperative promotion, the paper debates the principle and notice-proceeding when draw the rebate policy. Finally, a simple of Z-corporation is served for illustrating the win-win effect of cooperative promotion and the issue should be considered when draw the concrete business policy. The paper affords theoretic explanation for the necessity of corporation's implementing cooperative promotion, at the same time, offers the reference for the corporation how draws the reasonable business policy.