Optimal cooperative advertising integration strategy for organizations adding a direct online channel

Since the advent of the Web, retailers who served consumers offline (ie in stores or via catalogue) have grappled with how to effectively integrate the Internet into their marketing strategies and tactics. Clearly, how a firm elects to integrate the Internet into its retailing process, and how it co...

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Bibliographic Details
Published in:The Journal of the Operational Research Society 2006-08, Vol.57 (8), p.920-927
Main Authors: Berger, P D, Lee, J, Weinberg, B D
Format: Article
Language:English
Subjects:
Advertising
Applied sciences
Case-Oriented Papers
Consumers
Cooperation
Cooperative advertising
Customers
Direct sales
Electronic commerce
electronic retailing
Exact sciences and technology
Firm modelling
Integration by parts
integration strategies
Interactive marketing
Internet
Market strategy
Marketing
Objective functions
online selling
Operational research and scientific management
Operational research. Management science
Operations research
Profitability
Profits
Rentals
Retail cooperatives
Retail stores
Retailing industry
Sales management
Sales promotions
Studies
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Summary:Since the advent of the Web, retailers who served consumers offline (ie in stores or via catalogue) have grappled with how to effectively integrate the Internet into their marketing strategies and tactics. Clearly, how a firm elects to integrate the Internet into its retailing process, and how it coordinates offline and online strategic decisions, can impact its performance. In this paper, we examine integration decisions from a cooperative advertising perspective to determine the profitability of various integration strategies. We find that profit is greater when using a 'partial-integration' strategy rather than a 'separation' strategy; moreover, we find that profit is yet greater when using a 'full-integration' strategy rather than a 'partial-integration' strategy.
ISSN:0160-5682
1476-9360
DOI:10.1057/palgrave.jors.2602069