عنوان مقاله [English]
Vertical cooperative advertising is an advertising coordination scheme utilized by the manufacturers in order to affect the retailers' behavior. In a cooperative advertising program, the manufacturer incurs a part of retailers' local advertising costs in order to motivate the retailers to invest more on local advertising. On the other hand, the budgeting among different media alternatives is becoming an increasingly difficult marketing task. Each alternative, such as TV, radio, billboard, etc., has different effects on
market demand and market share. To the best of our knowledge, all the previous studies on cooperative advertising problem have considered only one advertising option that may lead to sub-optimal solutions.
In this paper, we study cooperative advertising problem with multiple local advertising options in a supply chain comprised of a single manufacturer and two retailers. The manufacturer advertises to strengthen the image of his brand. However, retailers' advertisement intends to acquire short-term sales. Each retailer can choose one of the local advertising options, which directly affect its market share. Moreover, the market demand is assumed to be affected by the manufacturer's advertising cost and retailers' advertising options and advertising costs. Therefore, determining the best advertising options and investments are of great importance.
The aim of the problem is to determine the retailers' equilibrium option, each firm's advertising investment, and the manufacturer's participation rates on retailers' local advertising investment. The problem formulated as a three-stage game theoretic model. The retailers make their decisions simultaneously and a Stackelberg game is played between two echelons with the manufacturer being the leader. We provide an illustrative example as well as sensitivity analysis in order to investigate the Subgame Perfect Equilibrium
(SPE) and coalitional strategies. A remarkable result is that the manufacturer's profit as well as the retailers' profit improve in coalitional strategies compared to the equilibrium strategy.