The retailer's brand promotion strategy under competition: The impact of supply uncertainty |
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| Institution: | 1. College of Economics and Management, Huazhong Agricultural University, Hubei, 430000, China;2. Institute of Agricultural Economy and Development, Chinese Academy of Agricultural Sciences, Beijing, 100081, China;3. School of Economics and Management, Yantai University, Yantai, 264005, China;1. School of Management, Hefei University of Technology, Hefei, China;2. Key Laboratory of Process Optimization and Intelligent Decision-Making, Ministry of Education, Hefei, China;3. Laboratory of Applied Brain and Cognitive Sciences, School of Business and Management, Shanghai International Studies University, Shanghai, China;1. School of Business Administration, Shandong Technology and Business University, Yantai, 264005, China;2. Business School, Chengdu University, Chengdu, 610106, China;3. School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, 611731, China;1. Department of Management, University of Bologna, Via Capo di Lucca, 34, 40126, Bologna, Italy;2. University of Pisa, Department of Business Administration and Management, Via Cosimo Ridolfi, 10, Pisa, 56124, Italy;3. University of Florence, Department of Economics and Business Sciences, Via delle Pandette, 9, Florence, 50127, Italy;1. Galatasaray University, Faculty of Economics and Administrative Sciences, Department of Business Administration, 34353, Istanbul, Turkey;2. Yalova University, Institute of Graduate Studies, Department of Business Administration, 77200, Yalova, Turkey;1. International Institute of Finance, School of Management, University of Science and Technology of China, Jinzhai Road 96, HF 230026, AH Province, PR China;2. School of Management, Hefei University of Technology, Hefei, AH Province 230009, PR China |
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| Abstract: | While retailers are committed to promoting product brands to increase sales quantity and brand visibility, retailers are exposed to supply uncertainty. Therefore, we explore the brand promotion strategies of retailers in a competitive model. We then investigate the decision model under three different brand strategies and explore the equilibrium outcomes of stakeholders under supply uncertainty. In addition, we analyze and discuss social welfare under different scenarios. The results show that when the promotion cost is high (i.e., the cost effect dominates the market expansion effect), neither retailer promotes the product brand. When the promotion cost is low (i.e., the market expansion effect dominates the cost effect), both retailers tend to promote the product brands. When the promotion cost and market expansion match each other, only one retailer promotes the product brand becomes the equilibrium strategy. It is worth noting that when both retailers promote the product brand, the retailer falls into a prisoner's dilemma. In addition, we find that the supply uncertainty level diminishes the cost affordability and the motivation of retailers to promote the product brands. Interestingly, the supply uncertainty level reduces the possibility of retailers being in a prisoner's dilemma. Besides, market expansion (supply uncertainty) contributes to improving (diminishing) social welfare. |
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| Keywords: | Retailer competition Supply uncertainty Brand promotion Supply chain management Social welfare |
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