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A Study of the Horizontal Cooperation Strategy for Advertising in Dual-channel Supply Chains
Author(s): 
Pages: 71-78
Year: Issue:  3
Journal: Journal of Wuyi University(Natural Science Edition)

Keyword:  dual-channel supply chainsStackelberg gameBertrand gameadvertising cooperation;
Abstract: To study the influence of advertising cooperation strategy on demand of channel supply chain and the profit of decision-makers in the dual channel supply chain of online retailers and traditional retailers, a double channel model for advertising cooperation is established by adopting the Stackelberg game method and the Bertrand game method, the effect of advertising cooperation on channel price and demand and the relationship between the profits of parties and the preference of retail channels are compared and analyzed. The study finds that online retailers can achieve greater profits by adopting the Bertrand game method than by the Stackelberg method while traditional retailers’ optimal profits by adopting the Stackelberg game method are twice of that by the Bertrand method. Example analysis shows: after adopting advertising cooperation, the profits of both sides increase substantially; there is a negative relationship between online retailers’ profits and their retail channel preference and a positive relationship between traditional retailers’ profits and their channel preference.
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