Cooperative Advertising And Product Pricing Study In A Dual-channel Supply Chain

In recent years, with the rapid development of network technology and the third party logistics, this trend not only changes people’s consumption patterns, and also promotes the transformation of enterprises’product sales model, an increasing number of manufacturers open double channels, namely online direct marketing channels and traditional retail channels. Cooperative advertising and product pricing are important parts of dual channel supply chain management, how to carry out cooperative advertising and product pricing becomes an important problem to be solved of manufacturer and retailer in a dual-channel supply chain.A dual-channel supply chain system is composed of a manufacturer and a retailer was considered, a manufacturer sells single new product through its direct channel and the traditional retail channel. The demand of direct channel and retail channel is affected by the cooperative advertising and product price, frequently-used influence function of advertising to demand were improved in this paper, the influence of cooperative advertising and channel price and cross substitution effect between the channels were cosidered, the cooperative advertising and product pricing joint decision model was established, using game theory and related constraints optimization theory to study the optimal cooperative advertising and product pricing decision under both the centralized decision-making of manufacturers and retailers to cooperative game and the decentralized decision-making of manufacturers dominate the Stackelberg game. Studies have shown that under both centralized and decentralized decision-making situation, consumers’acceptance for direct channel has important influence on pricing decision; under the decentralized decision-making situation, consumers’acceptance for direct channel and cooperative advertising cost-sharing ratio have important effect on cooperative advertising decision.Through the comparative study and numerical simulation analysis of the optimal decision under different decision situations, some new conclusions were found, such as direct price and retail price under centralized decision situations higher than under decentralized decision making, at the same time, the total profit of supply chain under centralized decision situation higher than the total profit under decentralized decision situation, it is different from the "double marginalized effect":Under the decentralized decision making situations, manufacturers are willing to share the cooperative advertising expense ratio is higher, the retailer cooperative advertising level is willing to put is higher, and as long as the cooperative advertising cost-sharing ratio no more than the optimal share rate, manufacturers and retailers can benefit from the cooperative advertising strategy.The innovation and contribution of this paper is:(1) based on the existing research, considering the cross effect of prices and the differences of channels, and the cooperative advertising as decision variables, cooperative advertising and product pricing joint decision model was established; (2) the innovative improved the widespread use of cooperative advertising effect on demand function, so as to avoid the negative problems; (3) through the theory and numerical simulation analysis, compared the optimal equilibrium strategies of cooperative advertising and product pricing decision of different decision situations, and unlike regular conclusions are gotten.