Referral service and customer incentive in online retail supply Chain

Yuangao Chen · Wenqing Zhang · Shuiqing Yang · Z.J. Wang · Sihui Chen

16 citations0/0 files storedJournal of Applied Research and Technology

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Supply Chain and Inventory Management Consumer Market Behavior and Pricing Sustainable Supply Chain Management

Abstract

This paper studies an online retail supply chain that includes one referral infomediary and one retailer, in which theinfomediary provides demand referral service to retailers and incentive rebates to customers. A linear dual-channeldemand with the effect of customer incentive and horizontal service cooperation model was established, and then theoptimal policies of infomediary and retailers in centralized and decentralized supply chain were analyzed. Moreover, ahorizontal cooperation contract based on customer incentive cost as well as referral service price was developed tocoordinate the supply chain. The results revealed that the contract contributed to profit optimization of online retailsupply chain and effective win-win cooperation. Finally, we analyze the impact of rebate sensitivity and market shareon these optimal policies and illustrate the results by some numerical examples.

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2009Effects of Word-of-Mouth versus Traditional Marketing: Findings from an Internet Social Networking Site 2008Online Consumer Review: Word-of-Mouth as a New Element of Marketing Communication Mix 2004Channel Conflict and Coordination in the E‐Commerce Age 2012What drives consumers to spread electronic word of mouth in online consumer-opinion platforms 2002Supply Chain Coordination Under Channel Rebates with Sales Effort Effects 2003Models for Supply Chains in E-Business 2004Coordinating Contracts for Decentralized Supply Chains with Retailer Promotional Effort 2008Quantifying the Long-Term Impact of Negative Word of Mouth on Cash Flows and Stock Prices

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