Modelling Cooperative Advertising Decisions in Franchising

Rajiv P. Dant · Paul D. Berger

185 citations0/0 files storedJournal of the Operational Research Society

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Supply Chain and Inventory Management Consumer Market Behavior and Pricing Franchising Strategies and Performance

Abstract

Advertising fee decisions in franchise systems are a frequent source of conflict between franchisors and franchisees. Such disagreements persist because the win-win potential of vertical cooperative advertising is not well appreciated. Our paper introduces a formal normative approach for analyzing, understanding and subsequently making these vertical cooperative advertising decisions within a franchising context in a manner that results in optimal system-wide returns. The model demonstrates that cooperative determination of franchisor's and franchisee's advertising contributions may yield superior payoffs for both exchange partners than the total payoff if the franchisor and franchisee seek to optimize their individual objective functions. Three types of models are developed and evaluated (i.e. deterministic, stochastic and under conditions of differing perceptions of the sales response functions to advertising). Conclusions hold under all three model variants. Industry implications are also presented.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 185 citations exist upstream.

References

2000Marketing management: analysis. planning. implementation and control 1992Agency Theory and Franchising: Some Empirical Results 1978The Theory of the Firm and the Structure of the Franchise Contract 1985The Economics of Franchise Contracts 1988An Empirical Look at Franchising as an Organizational Form 1972Vertical Cooperative Advertising Ventures

Cited by

2005The Economics of Franchising 1996Multi-unit franchising: Growth and management issues 2015Joint advertising, pricing and collection decisions in a closed-loop supply chain 1999The challenge of autonomy and dependence in franchised channels of distribution 2013Cooperative advertising models in supply chain management: A review 2017Sustainable manufacturing in a closed-loop supply chain considering emission reduction and remanufacturing 1998Control techniques and upward flow of information in franchising in distant markets: conceptualization and preliminary evidence 2012

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.