Browsing by Author "Sigue, Simon Pierre"

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    Cooperative advertising in competing supply chains and the long-term effects of retail advertising
    (2021-09-03) Karray, Salma; Martin-Herran, Guiomar; Sigue, Simon Pierre
    The profitability of cooperative advertising (CA) programs is analyzed in a supply chain where competing manufacturers sell their products through competing retailers. We study a two-period game-theoretic model that accounts for positive and negative long-term effects of retail advertising on consumer preferences. We obtain closed-form equilibria in two particular cases where either stores or products are perfectly differentiated. For the general case where both products and stores can be substitutable, we develop a numerical algorithm to find the equilibrium. We compare the equilibria obtained in games where CA is offered and where it is not. The results show that the long-term effects of retail advertising and the levels of substitutability between products and retailers all play a key role in assessing the profitability of CA programs. CA only benefits manufacturers when store and product competition are both low, or retailers are highly differentiated. However, in most cases, retailers do not find such programs profitable except when product substitutability levels are high while store competition is low. Finally, CA can only be win-win arrangements for manufacturers and retailers when the level of store differentiation is very high, the products are moderately substitutable, and retail advertising has a substantial positive long-term impact.
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    Informational and/or Transactional Websites: Strategic Choices in a Distribution Channel
    (Elsevier, 2017) Karray, Salma; Sigue, Simon Pierre
    While most businesses have faced the decision of whether to operate an informational and/or a transactional website, the literature on website selection in marketing channels remains very sparse. This paper proposes an analytical framework that compares scenarios where a manufacturer uses either an informational, a transactional, or both transactional and informational website in a distribution channel formed by one manufacturer and one retailer. We find that the selection of the optimal website depends on the online market base of the product, the effectiveness of the manufacturer-controlled online communications, and the cross-price effect between online and offline channels. For both the manufacturer and retailer, informational websites are preferable when the online market base is small. With larger online markets, the manufacturer may prefer either informational and transactional websites or exclusively informational websites, while the retailer is always better off with an exclusively informational website. Theoretical and managerial implications of these findings are discussed.