Browsing by Author "Sigue, Simon-Pierre"

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    Cooperative advertising for competing manufacturers: The impact of long-term promotional effects
    (ScienceDirect, 2017-02) Karray, Salma; Martin-Herran, Guiomar; Sigue, Simon-Pierre
    The effectiveness of cooperative advertising programs is studied in a market where two competing manufacturers deal with an exclusive retailer and two products. Two two-stage game theoretic models are developed to analyze the long-term effects of retailer's promotions, which can be positive or negative, on the effectiveness of cooperative advertising. Closed-form equilibrium solutions are obtained and compared. We find that the level of product substitutability and the sign and magnitude of the long-term effects of retailer's promotions on sales determine whether cooperative advertising should be offered and accepted by the manufacturers and retailer. In particular, depending on the level of product substitutability, cooperative advertising can benefit both the manufacturers and retailer even when retailer's promotions negatively affect future sales. Conversely, it may not be in the interest of the manufacturers to offer cooperative advertising when the products are fairly undifferentiated regardless of the nature of the long-term effects of promotions. Finally, the manufacturers and retailer may refuse to respectively offer or participate in cooperative advertising programs that enhance total channel profits.
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    Should Companies Jointly Promote their Complementary Products when they Compete in other Product Categories?
    (ScienceDirect, 2016-12) Karray, Salma; Sigue, Simon-Pierre
    Joint promotions, whereby companies pool marketing resources to promote their brands, are increasingly used to reduce marketing costs and develop common business opportunities, but formal knowledge about how they should be effectively implemented remains sparse. This paper investigates whether firms should jointly promote their complementary products when they also offer substitute products in another category. It also studies whether companies should partner with allies that can or cannot leverage on joint promotion to create spillover in their product portfolios. Our main findings are as follows. A company’s decision to enter or not to enter into a joint promotion depends on the presence and nature (positive or negative) of promotion spillover in its own product portfolio and the effect of joint promotion on each complementary product demand. Particularly, in the absence of spillover effect, joint promotion may not be mutually beneficial if its direct effects on the two complementary products are asymmetric. On the other hand, depending on its direct effects on the complementary products, joint promotion could be a profit-enhancing activity for the two firms even when it negatively affects the demand of their substitute products by intensifying price competition. Finally, we discuss the implications of branding strategies on the effectiveness of joint promotion. The results in this paper are useful for firms offering products in different categories where joint promotional spillover can occur.