Cooperative Advertising in a Marketing Channel

An integrative framework of cooperative advertising: Should manufacturers continuously support retailer advertising?

“…β is set to zero when retailer advertising does not have any impact on the second-period demand. This type of retailer advertising is known as promotional advertising, as it exclusively stimulates short-term sales (Jørgensen et al 2000). Consistent with the empirical findings of the work by Herrington and Dempsey (2005) in the automobile industry, we do not make any a priori assumption on the relative importance of the short-term and long-term effects of retailer advertising.…”

“…Instead, we study the general scenario where, depending on the content of this type of advertising, retailer advertising can have no, negative, and positive carryover effects. Previous works do not simultaneously investigate these three possible effects (He et al, 2014;Jørgensen et al, 2000Jørgensen et al, , 2001Jørgensen et al, , 2003Sigué and Chintagunta, 2009). In this paper we show that these effects play a critical role in how channel members schedule their advertising decisions.…”

“…For instance, β can take negative values when retailer advertising hurts the brand image or goodwill (Jørgensen et al, 2003). Conversely, β can takes positive values when the first-period retailer advertising contributes to enhancing the brand image or goodwill (Jørgensen et al, 2000). β is set to zero when retailer advertising does not have any impact on the second-period demand.…”

Cooperative advertising for competing manufacturers: The impact of long-term promotional effects

“…Taking into account the second-period retailer's profit (given by (16)), the retailer's total profit during the first and second periods is as follows:…”

Advertising and production of a seasonal good for a heterogeneous market

“…Although the infinite horizon formulation is the natural setting for the analysis of some dynamic optimization problems in advertising, as for instance in the recent papers (Jørgensen et al, 2001), (Weber, 2005), (Grosset and Viscolani, 2008), there are special situations for which a finite horizon formulation is obviously needed. Examples of this case are advertising for an event, as in (Jørgensen et al, 2006), introducing a new product, as in (Buratto et al, 2006a), and advertising for a seasonal product, as in (Favaretto and Viscolani, 2004).…”