TY - JOUR
T1 - A game-theoretic model for co-promotions
T2 - Choosing a complementary versus an independent product ally
AU - Karray, Salma
AU - Sigué, Simon Pierre
N1 - Publisher Copyright:
© 2015 Elsevier Ltd.
PY - 2015/7/1
Y1 - 2015/7/1
N2 - This paper studies the optimal choice of promotional partners in a three-firm market where two firms sell complementary products and a third firm sells an independent product. Game-theoretic models are developed to investigate the following scenarios: no promotional partnership, partnership between the two complementary products, partnership between a complementary product and the independent product, and partnership between the three products. Equilibrium Nash solutions are obtained and conditions under which each of the four scenarios above can be implemented are identified. Results show that these conditions depend on various parameters, mainly the degree of product complementarity, the effectiveness of individual promotion, the effectiveness of joint promotion, and the base demand for each product. Commonly, a partnership between a complementary product and the independent product is optimal when the price effect of the complementary product is large, while the partnership between the two complementary products is more appealing when the effect of individual promotion is large enough. When feasible, a promotional partnership between the three products is preferred, except in some specified conditions.
AB - This paper studies the optimal choice of promotional partners in a three-firm market where two firms sell complementary products and a third firm sells an independent product. Game-theoretic models are developed to investigate the following scenarios: no promotional partnership, partnership between the two complementary products, partnership between a complementary product and the independent product, and partnership between the three products. Equilibrium Nash solutions are obtained and conditions under which each of the four scenarios above can be implemented are identified. Results show that these conditions depend on various parameters, mainly the degree of product complementarity, the effectiveness of individual promotion, the effectiveness of joint promotion, and the base demand for each product. Commonly, a partnership between a complementary product and the independent product is optimal when the price effect of the complementary product is large, while the partnership between the two complementary products is more appealing when the effect of individual promotion is large enough. When feasible, a promotional partnership between the three products is preferred, except in some specified conditions.
KW - Complementary product
KW - Game theory
KW - Independent product
KW - Joint promotion
KW - Marketing-OR interface
KW - Promotional alliance
UR - http://www.scopus.com/inward/record.url?scp=84922980553&partnerID=8YFLogxK
U2 - 10.1016/j.omega.2015.01.008
DO - 10.1016/j.omega.2015.01.008
M3 - Journal Article
AN - SCOPUS:84922980553
SN - 0305-0483
VL - 54
SP - 84
EP - 100
JO - Omega
JF - Omega
ER -