IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v57y2006i8d10.1057_palgrave.jors.2602069.html
   My bibliography  Save this article

Optimal cooperative advertising integration strategy for organizations adding a direct online channel

Author

Listed:
  • P D Berger

    (Boston University)

  • J Lee

    (Boston College)

  • B D Weinberg

    (Bentley College)

Abstract

Since the advent of the Web, retailers who served consumers offline (ie in stores or via catalogue) have grappled with how to effectively integrate the Internet into their marketing strategies and tactics. Clearly, how a firm elects to integrate the Internet into its retailing process, and how it coordinates offline and online strategic decisions, can impact its performance. In this paper, we examine integration decisions from a cooperative advertising perspective to determine the profitability of various integration strategies. We find that profit is greater when using a ‘partial-integration’ strategy rather than a ‘separation’ strategy; moreover, we find that profit is yet greater when using a ‘full-integration’ strategy rather than a ‘partial-integration’ strategy.

Suggested Citation

  • P D Berger & J Lee & B D Weinberg, 2006. "Optimal cooperative advertising integration strategy for organizations adding a direct online channel," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(8), pages 920-927, August.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:8:d:10.1057_palgrave.jors.2602069
    DOI: 10.1057/palgrave.jors.2602069
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2602069
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2602069?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Pradeep K. Chintagunta & Dipak Jain, 1992. "A Dynamic Model of Channel Member Strategies for Marketing Expenditures," Marketing Science, INFORMS, vol. 11(2), pages 168-188.
    2. John D. C. Little, 1970. "Models and Managers: The Concept of a Decision Calculus," Management Science, INFORMS, vol. 16(8), pages 466-485, April.
    3. Jorgensen, Steffen & Taboubi, Sihem & Zaccour, Georges, 2003. "Retail promotions with negative brand image effects: Is cooperation possible?," European Journal of Operational Research, Elsevier, vol. 150(2), pages 395-405, October.
    4. S. Chan Choi, 1991. "Price Competition in a Channel Structure with a Common Retailer," Marketing Science, INFORMS, vol. 10(4), pages 271-296.
    5. Leonard M. Lodish & Ellen Curtis & Michael Ness & M. Kerry Simpson, 1988. "Sales Force Sizing and Deployment Using a Decision Calculus Model at Syntex Laboratories," Interfaces, INFORMS, vol. 18(1), pages 5-20, February.
    6. M. L. Vidale & H. B. Wolfe, 1957. "An Operations-Research Study of Sales Response to Advertising," Operations Research, INFORMS, vol. 5(3), pages 370-381, June.
    7. Sarkar, Mitrabarun & Butler, Brian & Steinfield, Charles, 1998. "Cybermediaries in Electronic Marketspace: Toward Theory Building," Journal of Business Research, Elsevier, vol. 41(3), pages 215-221, March.
    8. Dominique M. Hanssens & Peter S. H. Leeflang & Dick R. Wittink, 2005. "Market response models and marketing practice," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 21(4‐5), pages 423-434, July.
    9. Bruner, Gordon II & Kumar, Anand, 2005. "Explaining consumer acceptance of handheld Internet devices," Journal of Business Research, Elsevier, vol. 58(5), pages 553-558, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul D Berger, 2016. "One man’s path to marketing analytics," Journal of Marketing Analytics, Palgrave Macmillan, vol. 4(1), pages 1-13, March.
    2. Neslin, Scott A. & Shankar, Venkatesh, 2009. "Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 70-81.
    3. SeyedEsfahani, Mir Mehdi & Biazaran, Maryam & Gharakhani, Mohsen, 2011. "A game theoretic approach to coordinate pricing and vertical co-op advertising in manufacturer-retailer supply chains," European Journal of Operational Research, Elsevier, vol. 211(2), pages 263-273, June.
    4. Haoyu Liu & Shulin Liu, 2019. "Considering In-App Advertising Mode, Platform-App Channel Coordination by a Sustainable Cooperative Advertising Mechanism," Sustainability, MDPI, vol. 12(1), pages 1-28, December.
    5. Guilan Yan & Yi He, 2020. "Coordinating pricing and advertising in a two-period fashion supply chain," 4OR, Springer, vol. 18(4), pages 419-438, December.
    6. Tagashira, Takumi & Minami, Chieko, 2019. "The Effect of Cross-Channel Integration on Cost Efficiency," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 68-83.
    7. Radhi, Mohannad & Zhang, Guoqing, 2019. "Optimal cross-channel return policy in dual-channel retailing systems," International Journal of Production Economics, Elsevier, vol. 210(C), pages 184-198.
    8. van Baal, Sebastian, 2014. "Should retailers harmonize marketing variables across their distribution channels? An investigation of cross-channel effects in multi-channel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 21(6), pages 1038-1046.
    9. Cao, Lanlan & Li, Li, 2015. "The Impact of Cross-Channel Integration on Retailers’ Sales Growth," Journal of Retailing, Elsevier, vol. 91(2), pages 198-216.
    10. Mirzabeiki, Vahid & Saghiri, Soroosh Sam, 2020. "From ambition to action: How to achieve integration in omni-channel?," Journal of Business Research, Elsevier, vol. 110(C), pages 1-11.
    11. Aust, Gerhard & Buscher, Udo, 2014. "Cooperative advertising models in supply chain management: A review," European Journal of Operational Research, Elsevier, vol. 234(1), pages 1-14.
    12. Melis, Kristina & Campo, Katia & Breugelmans, Els & Lamey, Lien, 2015. "The Impact of the Multi-channel Retail Mix on Online Store Choice: Does Online Experience Matter?," Journal of Retailing, Elsevier, vol. 91(2), pages 272-288.
    13. Yan, Ruiliang & Wang, John & Zhou, Bin, 2010. "Channel integration and profit sharing in the dynamics of multi-channel firms," Journal of Retailing and Consumer Services, Elsevier, vol. 17(5), pages 430-440.
    14. Weinberg, Bruce D. & Parise, Salvatore & Guinan, Patricia J., 2007. "Multichannel marketing: Mindset and program development," Business Horizons, Elsevier, vol. 50(5), pages 385-394.
    15. Hu, Xiaojian & Qiu, Ju & Zhao, Ju & Li, Yang, 2023. "Can in-store recommendations for online-substitutive products integrate online and offline channels?," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    16. Qian, Zhifeng & Day, Steven James & Ignatius, Joshua & Dhamotharan, Lalitha & Chai, Junwu, 2024. "Digital advertising spillover, online-exclusive product launches, and manufacturer-remanufacturer competition," European Journal of Operational Research, Elsevier, vol. 313(2), pages 565-586.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anshuman Chutani & Suresh Sethi, 2012. "Cooperative Advertising in a Dynamic Retail Market Oligopoly," Dynamic Games and Applications, Springer, vol. 2(4), pages 347-375, December.
    2. Huang, Jian & Leng, Mingming & Liang, Liping, 2012. "Recent developments in dynamic advertising research," European Journal of Operational Research, Elsevier, vol. 220(3), pages 591-609.
    3. Xie, Jinxing & Wei, Jerry C., 2009. "Coordinating advertising and pricing in a manufacturer-retailer channel," European Journal of Operational Research, Elsevier, vol. 197(2), pages 785-791, September.
    4. Chan, Tat Y. & Narasimhan, Chakravarthi & Yoon, Yeujun, 2017. "Advertising and price competition in a manufacturer-retailer channel," International Journal of Research in Marketing, Elsevier, vol. 34(3), pages 694-716.
    5. Lu, Lijue & Navas, Jorge, 2021. "Advertising and quality improving strategies in a supply chain when facing potential crises," European Journal of Operational Research, Elsevier, vol. 288(3), pages 839-851.
    6. Alderighi, Marco & Bianchi, Carluccio & Lorenzini, Eleonora, 2016. "The impact of local food specialities on the decision to (re)visit a tourist destination: Market-expanding or business-stealing?," Tourism Management, Elsevier, vol. 57(C), pages 323-333.
    7. He, Yi & Wang, Hang & Guo, Qiang & Xu, Qingyun, 2019. "Coordination through cooperative advertising in a two-period consumer electronics supply chain," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 179-188.
    8. Marusia Ivanova, 2007. "Genesis and Evolution of Market Share Predictive Models," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 117-148.
    9. Minakshi Trivedi, 1998. "Distribution Channels: An Extension of Exclusive Retailership," Management Science, INFORMS, vol. 44(7), pages 896-909, July.
    10. Gou, Qinglong & Shao, Jing & Wang, Xin & Yu, Lili, 2020. "Co-op supply chains with a local media company: Models and analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    11. Juan Zhang & Qinglong Gou & Susan Li & Zhimin Huang, 2017. "Cooperative Advertising with Accrual Rate in a Dynamic Supply Chain," Dynamic Games and Applications, Springer, vol. 7(1), pages 112-130, March.
    12. Yang, Chaolin & Xiong, Yi, 2020. "Nonparametric advertising budget allocation with inventory constraint," European Journal of Operational Research, Elsevier, vol. 285(2), pages 631-641.
    13. Ingene, Charles A. & Taboubi, Sihem & Zaccour, Georges, 2012. "Game-Theoretic Coordination Mechanisms in Distribution Channels: Integration and Extensions for Models Without Competition," Journal of Retailing, Elsevier, vol. 88(4), pages 476-496.
    14. Parker, Philip M. & Sarvary, Miklos, 1997. "Formulating dynamic strategies using decision calculus," European Journal of Operational Research, Elsevier, vol. 98(3), pages 542-554, May.
    15. Nawel Amrouche & Guiomar Martín-Herrán & Georges Zaccour, 2008. "Feedback Stackelberg equilibrium strategies when the private label competes with the national brand," Annals of Operations Research, Springer, vol. 164(1), pages 79-95, November.
    16. V. Srinivasan & Chan Su Park & Dae Ryun Chang, 2005. "An Approach to the Measurement, Analysis, and Prediction of Brand Equity and Its Sources," Management Science, INFORMS, vol. 51(9), pages 1433-1448, September.
    17. Krafft, Manfred & Goetz, Oliver & Mantrala, Murali & Sotgiu, Francesca & Tillmanns, Sebastian, 2015. "The Evolution of Marketing Channel Research Domains and Methodologies: An Integrative Review and Future Directions," Journal of Retailing, Elsevier, vol. 91(4), pages 569-585.
    18. Marc Fischer & Sönke Albers & Nils Wagner & Monika Frie, 2011. "Practice Prize Winner --Dynamic Marketing Budget Allocation Across Countries, Products, and Marketing Activities," Marketing Science, INFORMS, vol. 30(4), pages 568-585, July.
    19. Greg Shaffer & Florian Zettelmeyer, 2004. "Advertising in a Distribution Channel," Marketing Science, INFORMS, vol. 23(4), pages 619-628, November.
    20. Lilien, Gary L. & Rangaswamy, Arvind & van Bruggen, Gerrit H. & Wierenga, Berend, 2002. "Bridging the marketing theory-practice gap with marketing engineering," Journal of Business Research, Elsevier, vol. 55(2), pages 111-121, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:57:y:2006:i:8:d:10.1057_palgrave.jors.2602069. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.