National advertising,dual-channel coordination and firm performance |
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| Authors: | Zhi Pei Ruiliang Yan |
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| Institution: | 1. Department of Marketing, Spears School of Business, Oklahoma State University, Stillwater, OK 74078, USA;2. Department of Marketing & Management, College of Business & Entrepreneurship, Texas A&M University, Commerce, TX 75428, USA;1. Pennsylvania State University, Mont Alto, 1 Campus Drive, PA 17237, United States;2. John B. Goddard School of Business & Economics, Watts Business Building, Weber State University, Ogden, UT 84408-3803, USA;3. University of North Texas, College of Business, 1155 Union Circle #311160, Denton, TX 76203-5017, United States;4. Drury University, 900 North Benton, Springfield, MO 65802, United States;1. Department of Home Economics, Korea National Open University, 169 Dongsoong-Dong Jongro-Gu, Seoul 110-791, Republic of Korea;2. College of Business Administration, Ajou University, San 5 Wonchun-Dong Youngton-Gu, Suwon 443-749, Republic of Korea |
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| Abstract: | With the rapid development of e-commerce, many manufacturers nowadays opt to open an online channel to engage in direct online sales. The mix of retailing with an online channel adds a new dimension of competition and complementarity to a product's distribution channels. Our model focuses on the strategic effect of the manufacturer's national advertising on alleviating the channel competition. We use a game-theoretical model to show that opening an online channel with the added national advertising effectively alleviates the channel conflict and thus helps improve the whole channel and each channel member performance. Depending on the different product categories and the degree of channel substitutability, the manufacturer's investment in the national advertising also will be different. The value of national advertising increases as product is more compatible with online sales and channel substitutability increases. |
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