Online retail platform cooperative promotion strategies with manufacturer competition

This study delved into the dynamics of cooperative sales promotion between a retail platform and its manufacturer suppliers. It was observed that retail platforms were increasingly inclined to collaborate with manufacturers on sales promotion initiatives, such as nationwide advertising campaigns, to enhance brand development. Adopting a differential game model, this paper investigated the retail platform's strategic decision regarding participation in cooperative promotions in scenarios ranging from monopoly to duopoly among manufacturers. The findings revealed that the platform's willingness to engage in cooperative promotions was significantly influenced by the commission fee, with the platform opting for such promotions only when the commission fee surpassed a critical threshold. Additionally, the study shed light on how the intensity of upstream competition shapes the platform's stance on cooperative promotions. Notably, the platform adopted a more lenient policy in a low-competition environment and a more stringent one in the face of heightened competition. This study contributed to the existing body of literature by addressing a gap in the understanding of cooperative promotion and advertising dynamics within the context of modern retail platforms and their supply chains, complementing the predominantly studied traditional reselling supply chains.