Study On The Supply Chain Cooperative Advertising Based On The Revenue Sharing Contract

With the development of economic globalization, the competition between the different enterprises confers to supply chain's competition. In order to strengthen the competitiveness, more and more enterprises apply the supply chain cooperation into their business operations. Cooperative advertising in a supply chain, i.e., the manufacture reimburses the retailer for promoting the manufacture's products, has become a mainstay of marketing practice, and it also has become an indispensable cooperation mechanism of product distribution in recent years. Before the cooperation between the manufacturer and retailer, it must be made sure that the cooperation is coordinating and how to distribute the joint revenue.This paper summarizes the development of cooperative advertising and revenue sharing contract theoretical research. The model of cooperative advertising based on the revenue sharing contract is given, the manufacturer's and the retailer's optimal revenue, and the relevant supply chain joint revenue has been obtained by using the game theory, model optimization and numerical analysis method within three different game structures which are the non-cooperative game, the Stackelberg leader-follower game and the Nash cooperative game. By comparatively analyzing, we find that the proportion of the revenue sharing contract is influenced by the supply chain marginal revenue, the national advertising level, the elasticity of the national advertising and the elasticity of the local advertising. It is shown that both the manufacturer and the retailer could gain the optimal revenue within the Nash cooperative game, and the supply chain can be coordinated perfectly.