Title: Channel competition, manufacturer incentive and supply chain coordination

Authors: Zhi Pei; John Wang; Barbara Ross Wooldridge; Jie Sun

Addresses: Soules College of Business, The University of Texas at Tyler, Tyler, TX 75799, USA ' Feliciano School of Business, Montclair State University, Montclair, NJ 07043, USA ' Soules College of Business, The University of Texas at Tyler, Tyler, TX 75799, USA ' Business School of Zhijiang College, Zhejiang University of Technology, Shaoxing, Zhejiang 312030, China

Abstract: COVID-19 created a surge in e-commerce usage, leading to fierce channel competition between the manufacturer's online sales and the offline retailer. Hence, the imperative need for effective and innovative optimisation strategies to mitigate channel competition. Manufacturer-coupons are widely practiced in market, yet research on the importance they play in coordinating channel competition to achieve optimisation in channel distributions is scarce. This research addresses this gap by examining the effectiveness of manufacturer-coupons on the coordination of the manufacturer's online sales and offline retailer's sales. The findings indicate that issuing a manufacturer-coupon to the customers who buy from the offline retailer reduces the competition in the different channel distributions, but cost sharing of the retailer coupon is a better strategy. We thus examine if profit sharing is an effective strategy to facilitate the use of manufacturer-coupon in the market. After comparing different scenarios, we conclude that advanced profit-sharing can be effective in making manufacturer-coupon prevalent in the market and thus alleviate channel competition effectively.

Keywords: e-commerce; channel competition; manufacturer-coupon; coordination strategies; game theory.

DOI: 10.1504/IJADS.2024.141826

International Journal of Applied Decision Sciences, 2024 Vol.17 No.6, pp.749 - 771

Received: 05 Dec 2022
Accepted: 05 Mar 2023
Published online: 02 Oct 2024 *

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