Price and quality decisions in dual-channel supply chains

Revenue and promotional cost-sharing contract versus two-part tariff contract in coordinating sustainable supply chain systems with deteriorating items

Optimizing advertising budget allocation in the luxury fashion industry is an important problem. In this study, motivated by real‐world practices, we consider a luxury fashion firm serving a conspicuous market consisting of two groups of consumers who influence one another. We investigate the optimal customer portfolios and budget allocation problem using the mean‐variance (MV) framework. Under the basic model in which all budget must be spent, we identify different scenarios and propose an algorithm to construct the MV efficient frontier for each scenario. Interestingly, different from the classic investment portfolio problem, we reveal that: (i) not all budget allocations between the two groups of consumers are MV efficient, which means that the efficient frontier is not continuous; (ii) in the presence of social influence, diversification of customer portfolio does not always lead to a smaller variance, which counterintuitively means that focusing on a single consumer group can reduce risk. We also prove that to maximize expected profit, the optimal strategy is to allocate all advertising budget to one group of consumers only (i.e., a polarized strategy). We illustrate analytically, the importance of identifying the right scenario for budget planning. Finally, we examine the budget saving strategy in the extended model and uncover that the respective range of efficient solutions is smaller than the one under the all budget spending strategy. This shows that the budget saving strategy offers less flexibility for MV efficient budget allocation than the all budget spending strategy.

Optimal Advertising Budget Allocation in Luxury Fashion Markets with Social Influences: A Mean-Variance Analysis

The Optimal Combination between Selling Mode and Logistics Service Strategy in an E-commerce Market

Technology improvement strategy for green products under competition: The role of government subsidy

Advertising is a crucial tool for demand creation and market expansion. When a manufacturer uses a retailer as a channel for reaching end customers, the advertising strategy takes on an additional dimension: which party will perform the advertising to end customers. Cost sharing (�co-operative advertising�) arrangements proliferate the option by decoupling the execution of the advertising from its funding. We examine the efficacy of cost sharing in a model of two competing manufacturer�retailer supply chains who sell partially substitutable products that may differ in market size. Some counterintuitive findings suggest that the firms performing the advertising would rather bear the costs entirely if this protects their unit profit margin. We also evaluate the implications of advertising strategy for overall supply chain efficiency and consumer welfare.

Advertising in Asymmetric Competing Supply Chains

Advertising is a crucial tool for demand creation and market expansion. When a manufacturer uses a retailer as a channel for reaching end customers, the advertising strategy takes on an additional dimension: which party will perform the advertising to end customers. Cost sharing (“cooperative advertising”) arrangements proliferate the option by decoupling the execution of the advertising from its funding. We examine the efficacy of cost sharing in a model of two competing manufacturer-retailer supply chains who sell partially substitutable products that may differ in market size. Some counterintuitive findings suggest that the firms performing the advertising would rather bear the costs entirely, if this protects their unit profit margin. We also evaluate the implications of advertising strategy for overall supply chain efficiency and consumer welfare.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2236440_code1325944.pdf?abstractid=2236440&mirid=1&type=2

Bin Liu

Papers

Advertising in Asymmetric Competing Supply Chains

Advertising in Asymmetric Competing Supply Chains