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Competitive effects of informative advertising in distribution channels

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  • Jianqiang Zhang
  • Weijun Zhong
  • Shue Mei

Abstract

Informative advertising and persuasive advertising play quite different roles in the efficiency of distribution channels. A recent study observes that a direct channel structure outperforms an indirect one in the presence of advertising competition between manufacturers, assuming that advertising is persuasive. On the contrary, taking the informative view of advertising, this paper demonstrates an opposite result: Disintegration does make competing manufacturers better off for highly substitutable goods. We further discuss the optimum control of informative advertising under the indirect channel scenario, showing that retailers are more effective than manufacturers as advertisers. Copyright Springer Science+Business Media, LLC 2012

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  • Jianqiang Zhang & Weijun Zhong & Shue Mei, 2012. "Competitive effects of informative advertising in distribution channels," Marketing Letters, Springer, vol. 23(3), pages 561-584, September.
    • Handle: RePEc:kap:mktlet:v:23:y:2012:i:3:p:561-584
    DOI: 10.1007/s11002-011-9161-2
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    3. Zhang, Jianqiang & Liang, Qi & Huang, Jian, 2016. "Forward advertising: A competitive analysis of new product preannouncement," Information Economics and Policy, Elsevier, vol. 37(C), pages 3-12.
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    6. Yan Wang & Shue Mei & Weijun Zhong, 2022. "Advertising or recommender systems? A game‐theoretic analysis of online retailer platforms' decision‐making," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2119-2132, September.
    7. Qing Hu & Tomomichi Mizuno, 2021. "Endogenous timing and manufacturer advertising: A note," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 309-320, May.
    8. Zhang, Jianqiang & He, Xiuli, 2019. "Targeted advertising by asymmetric firms," Omega, Elsevier, vol. 89(C), pages 136-150.

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