Upcoming Webinars

Vertical Cooperative Advertising: A Manufacturer’s Perspective

Event Info

icon_calendar.jpgNovember 17, 2020
icon_clock.jpg12noon PDT
icon_stopwatch.jpgDuration: 1 hour


Ilhyung Kim
Western Washington University

Ilhyung Kim is a Professor of Decision Sciences at Western Washington University. He holds a Ph.D. in Operations and Technology Management from the University of California, Los Angeles (UCLA). He teaches applied statistics, predictive analytics, and operations management. His current research interests are supply chain coordination, manufacturing and service systems design, and data mining.

Vertical cooperative advertising, where a manufacturer participates in his retailer’s local advertising, has been examined extensively in the operations research literature. Yet there are some controversies in the literature regarding when such cooperative advertising is beneficial. We attempt to reconcile these controversies by considering all relevant variables in a single framework. We find that the manufacturer’s participation in local advertising is a reasonable strategy for him only when the following conditions are met: The retail price is driven by the market, the manufacturer’s contribution margin is high compared to the retailer’s, and the demand is inelastic or moderately elastic.

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