Study On The Supply Chain Cooperative Advertising Based On The Level Of Advertising Efforts And Price Discount

Supply chain cooperative advertising as a cost-sharing mechanism is an important part of the supply chain channel coordination, which is reasonable to share advertising costs to achieve the coordination of supply chain channels. Supply chain cooperative advertising includes national and local advertising.Which is that manufacturer in order to strengthen its brand awareness while doing national advertising; and retailer provides more detailed product information to consumers while doing local advertising.In the circumstance of the market demand being sensitive to the price, the relationship between the level of advertising effort and cost for the single manufacturer and single retailer as well as a price discount being given to the consumers by the manufacturer have been introduced into the cooperative advertising model, nonlinear demand function is established. Based on this, four cooperative advertising game model are studied, the first one is the classic Stackelberg game model which manufacturer is as the leader while retailer is as the follower; The secend is that followed by continuous improvement for retailers in the market economy status, rights have gradually increased this phenomenon, discussing the Stackelberg game model that retailer as the leader and manufacturer as follower; the third is to consider the equivalent rights relationship between the manufacturers and retailer, analysising the supply chain cooperative advertising of Nash equilibrium, the final is cooperative game, both of manufacturer and retailer’s decisions are to make the supply chain system’s profit maximize of cooperative advertising. And then, this paper makes manufacturer as the leader of the Stackelberg game for example, comparing with cooperative game, and fully coordinated by Pareto efficiency, finally come to the conclusion that manufacturer and retailer equally share the profit of supply chain. Followed by the four games under the cooperative advertising program has carried on the comparison and analysis, and the results are verified by numerical analysis.The study found that when the manufacturer or retailer is as the leader in the Stackelberg game model, the manufacturer and retailer input more the level of advertising effort and the profits is also bigger than that of Nash equilibrium, this suggests that the two kinds of cooperative advertising game model are better than that of Nash equilibrium. Compared with other three kinds of non-cooperative game models, the cooperative game advertising model is the most advantage of this situation after full coordination; manufacturer and retailer share the additional benefits of supply chain system, the manufacturer and retailer’s advertising effort level and the profit of the supply chain are all biggest.