Game Theory Approach for Cooperative Advertising in Manufacturer-Retailer Supply Chain

• Main Authors: Jui-Yu Tseng, 曾瑞煜
• Other Authors: Ue-Pyng Wen
• Format: Others
• Language: en_US
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/06959479894036827473

碩士 === 國立清華大學 === 工業工程與工程管理學系 === 96 === Cooperative advertising is an interactive relationship between a manufacturer and a retailer in which the retailer initiates and implements a local advertisement and the manufacturer shares part of the costs. Except cooperative advertising, the manufacturer uses the national advertising to strengthen the brand image and the retailer stimulates consumer’s buying behavior by the local advertising. Therefore, the main reason for the manufacturer to use cooperative advertising is to motivate immediate sales, and for the retailer is to reduce his total advertisement expenditure. In this thesis, we focus on the cooperative advertising with discounts and without discounts and proposed three models to define the relationships. These three models included two non-cooperative game structures which are Stackelberg game and Nash game as well as one cooperative model. We derive the solutions of three models by mathematical programming model, and present the comparisons by their results. Furthermore, we showed several examples to illustrate the cooperative advertising models and proposed the procedure for strategy decision. According to the procedure, the manufacturer determines whether a price deduction percentage will increase his profit. If a price deduction percentage will increase manufacturer’s profit, and both players choose the same model, then the manufacturer will derive an optimal price deduction percentage to obtain the optimal profit. However, if the manufacturer and the retailer choose different models, then we suggest them to do fully coordinative cooperative advertising.