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Is Persuasive Advertising Always Combative in a Distribution Channel?

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  • Chi-Cheng Wu

    (Department of Business Management, National Sun Yat-Sen University, Kaohsiung 80424, Taiwan, Republic of China)

  • Ying-Ju Chen

    (Industrial Engineering and Operations Research Department, University of California, Berkeley, Berkeley, California 94720)

  • Chih-Jen Wang

    (Department of Business Management, Cheng Shiu University, Kaohsiung County 83347, Taiwan, Republic of China)

Abstract

The existing marketing literature suggests that persuasive advertising elicits counteractions from competing manufacturers and consequently leads to wasteful cancellation of the advertising effects. Thus, persuasive advertising is widely perceived to be combative in nature. A series of previously published papers demonstrates that appropriate targeting may partially mitigate the combative nature of persuasive advertising in that either the rival manufacturer or the retailer may benefit. In this paper, we complement their results by demonstrating the possibility that every channel member may benefit from persuasive advertising, i.e., a Pareto improvement along the distribution channel, thereby leading to the conclusion that persuasive advertising need not result in channel conflict.

Suggested Citation

  • Chi-Cheng Wu & Ying-Ju Chen & Chih-Jen Wang, 2009. "Is Persuasive Advertising Always Combative in a Distribution Channel?," Marketing Science, INFORMS, vol. 28(6), pages 1157-1163, 11-12.
    • Handle: RePEc:inm:ormksc:v:28:y:2009:i:6:p:1157-1163
    DOI: 10.1287/mksc.1090.0528
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    References listed on IDEAS

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    1. Kelton, Christina M L & Kelton, W David, 1982. "Advertising and Intraindustry Brand Shift in the U.S. Brewing Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 30(3), pages 293-303, March.
    2. Yuxin Chen & Yogesh V. Joshi & Jagmohan S. Raju & Z. John Zhang, 2009. "A Theory of Combative Advertising," Marketing Science, INFORMS, vol. 28(1), pages 1-19, 01-02.
    3. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
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    Cited by:

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    2. Zhang, Jianqiang & Cao, Qingning & He, Xiuli, 2020. "Manufacturer encroachment with advertising," Omega, Elsevier, vol. 91(C).
    3. Yenipazarli, Arda, 2024. "Strategic incentives for comparative advertising investments in non-zero-sum competition and economic consequences," European Journal of Operational Research, Elsevier, vol. 312(3), pages 1059-1073.
    4. Khim-Yong Goh & Cheng-Suang Heng & Zhijie Lin, 2013. "Social Media Brand Community and Consumer Behavior: Quantifying the Relative Impact of User- and Marketer-Generated Content," Information Systems Research, INFORMS, vol. 24(1), pages 88-107, March.
    5. Yuxiang Zhang & Weijun Zhong, 2024. "“Anchoring Effect†of Privacy in Targeted Persuasive Advertising Competition," SAGE Open, , vol. 14(2), pages 21582440241, June.
    6. Lei Yan & Yuxiang Zhang & Shue Mei & Weijun Zhong, 2024. "Personalized pricing with persuasive advertising and the value of consumer information: a duopoly framework," Electronic Commerce Research, Springer, vol. 24(3), pages 1533-1562, September.
    7. Quan Zheng & Honggang Hu & Xiajun Amy Pan, 2023. "Implications of product substitutability in a distribution channel," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1636-1653, June.
    8. Wu, Xiangxiang & Zha, Yong & Yu, Yugang, 2022. "Asymmetric retailers’ sales effort competition in the presence of a manufacturer’s help," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    9. He, Qiao-Chu & Chen, Ying-Ju, 2018. "Dynamic pricing of electronic products with consumer reviews," Omega, Elsevier, vol. 80(C), pages 123-134.
    10. Kolay, Sreya, 2015. "Manufacturer-provided services vs. Retailer-provided services: Effect on product quality, channel profits and consumer welfare," International Journal of Research in Marketing, Elsevier, vol. 32(2), pages 124-154.
    11. Xiaodong Yang & Gangshu (George) Cai & Charles A. Ingene & Jihong Zhang, 2020. "Manufacturer Strategy on Service Provision in Competitive Channels," Production and Operations Management, Production and Operations Management Society, vol. 29(1), pages 72-89, January.
    12. Grillo, Edoardo, 2016. "The hidden cost of raising voters’ expectations: Reference dependence and politicians’ credibility," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 126-143.

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