Research On Marketing Channel Incentive Mechanism Of Promotion Cost Distribution Based On Fairness Preference Theory

For a long time, the incentive mechanism in marketing channel is the focal point in economic researches, a reasonable incentive mechanism can be effectively reduced the negative impact of the asymmetric information. And the distribution of promotion cost is an important incentive mechanism, so designing a reasonable sharing mechanism will help channel members to achieve a win-win situation.This paper integrate fairness preference theory into the marketing excitation mechanism to breakthrough the traditional economic assumptions. Excitation mechanism in marketing channels has always been the focus of the economics research field, because it can effectively weaken and avoid the negative impact of asymmetric information in channel. So with the conception of fairness preference, this paper has breakthrough and expand the traditional excitation mechanism. On the other hand, this article has targeting at the visual angle of the special incentives segments in the cost cutting expenditure-the promotional cost distribution to draw specific conclusions gradually.The marketing channel in this paper is the traditional supply chain mode, which contains only one manufacturer and a single retailer, and subordinate to the manufacturer Stackelberg game, in this channel, manufacturers stays in a dominant position while the retailer is followed. The basic idea of this paper:First, take the traditional channel excitation mechanism with non-fairness preference decision-making as the basis situation, to research the promotion cost sharing decision in the traditional economic assumption; then, according to the direction of this article, author has respectively discussed and studied the channel members’ business decision under the intention fairness model and the result fairness model, mainly talking about the dependence relationship between interrelated decision variables, such as the relationship between promotion cost sharing ration and wholesale price or the retail price or their utilities. In the course of the study, author has used three classic mathematical model, the solution process is strictly allow to the manufacturers Stackelberg game progress and combine with the intuitive numerical analysis to conclude the useful summary in the three cases. The results show that:1. in the three hypothetical models, regardless of whether the channel members have fairness preference, trends between the relevant variables is the same as each other.2. Although the trend between the relevant variables under the three theoretical assumptions is consistent, but the relationship between their numerical size is different from each situation:For manufacturer, in terms of the same promotional cost sharing ratio, his wholesale price and the level of utility satisfy under economic assumption is larger than that under fairness preference assumption; as to the retailer, with the same promotional cost sharing ratio, his retail price and the level of utility under fairness preference assumption is larger than that under economic assumption. It can be seen that, while the channel is led by the manufacturer, the assumption of economic man is propitious to manufacturer and the preference model is conducive to the retailer, because the idea of fairness preference will weaken the manufacture’s leading advantage.3. Channel incentive mechanism under the economic man assumption is a special case of the incentive mechanism based on the result fairness preference model. With the same parameter settings, different fairness preference coefficient also has impact on of channel incentive mechanism.Therefore, on the basis of previous studies, the paper to combine the fairness preference with traditional economic assumptions, form a more in-depth study of the channel promotional cost sharing in marketing excitation mechanism and obtain more comprehensive and realistic conclusions.