Advertising Strategy Of Supply Chain In The Presence Of Gray Markets

In recent years,with the development of Internet information technology and cross-border logistics,the gray market phenomenon represented by "Haitao" and "Daigou" has become a new trend in the domestic consumer market.The unauthorized resale by gray market speculators between high-price and low-pirce markets not only meets the domestic demand for consumption upgrades,but is also recognized to some extent by relevant laws and policies.In light of this,the question that how authorized supply chains can respond to challenges from the gray market through their own operational strategies becomes a practical one.Previous researches on supply chain management under the gray market mostly focus on pricing and service strategies.Advertising and service are both "sales efforts" of enterprises,but advertising has spillover effects under the gray market which makes it different from general services,resulting in a more unclear mechanism.This dissertation examines the decision making and effectiveness of advertising strategies by authorized channels in a gray market context.To this end,this dissertation builds two-stage and three-stage Stackelberg game models for centralized and decentralized supply chain,respectively,and discusses different advertising strategy scenarios such as no advertising,advertising only in the high-price market,advertising in both high-and low-price markets,and whether to use cooperative advertising under both structures.Parametric analysis of the equilibrium results was used to examine the impact of differences in consumers' perceived value of gray market products on advertising decisions and profits.The market effect of each advertising strategy is examined by comparing the equilibrium results under different advertising strategies.The impact of supply chain structure on advertising decisions and profits is examined by comparing equilibrium results under both structures.Finally,the dissertation comprehensively investigates the order of superiority or inferiority of seven combined advertising and supply chain structure strategies in the dimensions of profit,gray market deterrence,advertising ROI,consumer surplus,and social welfare,and briefly judges the coordinating role of cooperative advertising cost-sharing contracts on the authorized supply chain.The results show that:(1)the advertising level in the high-price market should decrease with the increase in consumers‘ perceived value of gray market products,but eventually stabilize;(2)advertising only in the high-price market is a "win-win" strategy at the profit level for both the authorized channel and the gray market speculator;(3)advertising in both markets not only benefits the manufacturer,but also plays a role in suppressing the gray market during its maturity;(4)cooperative advertising benefits the manufacturer and the gray market speculator,but not the retailer,who instead loses profits due to the increase in advertising costs;(5)when advertising only in the high-price market,the centralized supply chain is more beneficial to the authorized channel,while when advertising in both markets,the decentralized supply chain is more beneficial.The research results of this dissertation reveal the operation mechanism of authorized channel advertising under the gray market,identify the innovative role that distinguishes it from the conventional advertising logic,provide a new perspective for gray market and supply chain advertising research,and provide theoretical guidance for enterprises to place advertising in the gray market.