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Effects of accrual constraints in cooperative advertising programs for distribution channels with one manufacturer and two retailers.

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Title: Effects of accrual constraints in cooperative advertising programs for distribution channels with one manufacturer and two retailers.
Authors: Liu, Bin1 (AUTHOR) liubin14@mails.tsinghua.edu.cn, Xie, Jinxing1 (AUTHOR) xiejx@tsinghua.edu.cn, Zhong, Feimin2 (AUTHOR) zhongfeimin@hnu.edu.cn
Source: International Transactions in Operational Research. May2025, Vol. 32 Issue 3, p1712-1750. 39p.
Subjects: Profit margins, Stream channelization, Consumer cooperatives, Game theory, Prices
Abstract: This paper considers a distribution channel with one manufacturer and two independent retailers and investigates how the accrual rate in a cooperative advertising program affects channel members' performances. When the two retailers' profit margins are the same, the accrual rate cannot benefit the manufacturer, which coincides with previous studies. However, if the retailers hold different profit margins, the accrual rate may benefit the manufacturer, which is never reported in existing literature. Specifically, when the market faced by the higher‐profit‐margin retailer exhibits a lower advertising efficacy, the manufacturer always prefers using an accrual rate if his profit margin is sufficiently high. Numerical simulations show that even when the manufacturer's profit margin is low, using an accrual rate may also lead to a Pareto improvement for the channel members. The main findings can be extended to the scenario with more than two retailers or with endogenously decided prices of channel members. [ABSTRACT FROM AUTHOR]
Copyright of International Transactions in Operational Research is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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  Data: Effects of accrual constraints in cooperative advertising programs for distribution channels with one manufacturer and two retailers.
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  Data: <searchLink fieldCode="AR" term="%22Liu%2C+Bin%22">Liu, Bin</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> liubin14@mails.tsinghua.edu.cn</i><br /><searchLink fieldCode="AR" term="%22Xie%2C+Jinxing%22">Xie, Jinxing</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> xiejx@tsinghua.edu.cn</i><br /><searchLink fieldCode="AR" term="%22Zhong%2C+Feimin%22">Zhong, Feimin</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> zhongfeimin@hnu.edu.cn</i>
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  Data: <searchLink fieldCode="JN" term="%22International+Transactions+in+Operational+Research%22">International Transactions in Operational Research</searchLink>. May2025, Vol. 32 Issue 3, p1712-1750. 39p.
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  Data: <searchLink fieldCode="DE" term="%22Profit+margins%22">Profit margins</searchLink><br /><searchLink fieldCode="DE" term="%22Stream+channelization%22">Stream channelization</searchLink><br /><searchLink fieldCode="DE" term="%22Consumer+cooperatives%22">Consumer cooperatives</searchLink><br /><searchLink fieldCode="DE" term="%22Game+theory%22">Game theory</searchLink><br /><searchLink fieldCode="DE" term="%22Prices%22">Prices</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: This paper considers a distribution channel with one manufacturer and two independent retailers and investigates how the accrual rate in a cooperative advertising program affects channel members' performances. When the two retailers' profit margins are the same, the accrual rate cannot benefit the manufacturer, which coincides with previous studies. However, if the retailers hold different profit margins, the accrual rate may benefit the manufacturer, which is never reported in existing literature. Specifically, when the market faced by the higher‐profit‐margin retailer exhibits a lower advertising efficacy, the manufacturer always prefers using an accrual rate if his profit margin is sufficiently high. Numerical simulations show that even when the manufacturer's profit margin is low, using an accrual rate may also lead to a Pareto improvement for the channel members. The main findings can be extended to the scenario with more than two retailers or with endogenously decided prices of channel members. [ABSTRACT FROM AUTHOR]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of International Transactions in Operational Research is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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        Value: 10.1111/itor.13361
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        Text: English
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        PageCount: 39
        StartPage: 1712
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      – SubjectFull: Profit margins
        Type: general
      – SubjectFull: Stream channelization
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      – SubjectFull: Consumer cooperatives
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      – SubjectFull: Game theory
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      – SubjectFull: Prices
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              M: 05
              Text: May2025
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              Y: 2025
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