Mixed Channels, Product Pricing Game, And Vertical Cooperative Advertising

With the development of IT and the emergence of e-commerce, a large number of enterprises establish direct channels. Thus in many supply chains exist there direct channels and indirect channels, namely mixed channels, at the same time. Study focuses of marketing channels have a new point of view in the context of mixed marketing channels. The main work of this paper is as follows:First, as seller's market is gradually changing to buyer's market, the leadership of supply chain is transferred from manufacturers to retailers. In terms of dominant retailer, this paper studies the pricing equilibria between the manufacturer and the retailer in a supply chain with mixed channels under the Stackelberg competition model and numerically carries out sensitivity analysis of parameters, such as price sensitivity, profit rate, migration parameter controlling the migration of customers from one channel to another. The conclusions are shown as follows: (1) If the absolute value of price sensitivity is small, profit rate decided by the retailer will be small; vice versa. (2) If price sensitivity is bigger, the optimal prices of each channel will be lower and both of the manufacturer and the retailer will obtain lower profit as well; vice versa. (3) If price sensitivity and migration parameter are fixed, prices will change according to profit rate.Then, cooperative advertising is considered as a channel coordination mechanism in supply chain management, which is an academic research focus. With consideration of the effect of cooperative advertising on demand distribution of mixed channels, this paper discusses that the manufacturer cooperates with the retailer by cost sharing and obtains the optimal advertising cost and advertising cost sharing rate. The conclusions are shown as follows: (1) If the manufacturer is more willing to share the local advertising cost, the retailer is willing to invest more in local advertising to promote sales. (2) The manufacturer shares advertising cost as a subsidy to the retailer, which is beneficial to both of them.