Cooperative Sales Promotion in Manufacturer-Retailer Channel under Unplanned Buying Potential (비계획구매를 고려한 제조업체와 유통업체의 판매촉진 비용 분담)
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- Journal of Distribution Research
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- v.17 no.4
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- pp.29-53
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- 2012
As so many marketers get to use diverse sales promotion methods, manufacturer and retailer in a channel often use them too. In this context, diverse issues on sales promotion management arise. One of them is the issue of unplanned buying. Consumers' unplanned buying is clearly better off for the retailer but not for manufacturer. This asymmetric influence of unplanned buying should be dealt with prudently because of its possibility of provocation of channel conflict. However, there have been scarce studies on the sales promotion management strategy considering the unplanned buying and its asymmetric effect on retailer and manufacturer. In this paper, we try to find a better way for a manufacturer in a channel to promote performance through the retailer's sales promotion efforts when there is potential of unplanned buying effect. We investigate via game-theoretic modeling what is the optimal cost sharing level between the manufacturer and retailer when there is unplanned buying effect. We investigated following issues about the topic as follows: (1) What structure of cost sharing mechanism should the manufacturer and retailer in a channel choose when unplanned buying effect is strong (or weak)? (2) How much payoff could the manufacturer and retailer in a channel get when unplanned buying effect is strong (or weak)? We focus on the impact of unplanned buying effect on the optimal cost sharing mechanism for sales promotions between a manufacturer and a retailer in a same channel. So we consider two players in the game, a manufacturer and a retailer who are interacting in a same distribution channel. The model is of complete information game type. In the model, the manufacturer is the Stackelberg leader and the retailer is the follower. Variables in the model are as following table. Manufacturer's objective function in the basic game is as follows: