Sales Effort and Coordination in an O2O Supply Chain with Two-Period of Marketing

Jing Shi
2020 Open Journal of Business and Management  
O2O supply chain has been a hot issue worldwide in recent years. This paper studies a two-period marketing problem in an O2O supply chain consisting of a manufacturer and an offline retailer. Besides the offline channel, the manufacturer owns an online channel which markets to the online customers and directs potential customers to the offline retailer. The retailer provides service for both the offline customers and the directed customers from online channel. The centralized and decentralized
more » ... and decentralized settings are both analyzed. The sales effort level of the retailer is higher than that of the manufacturer under centralized setting. The service levels of both retailer and manufacturer and supply chain profit under the decentralized setting are lower than that of the centralized setting. This paper finds that a two-way subsidy contract can fully coordinate the supply chain. The online customer can place the order online and then visit the brick-and-mortar store . At the same time, the offline customer can place order at the store. This kind of business is commonly seen in practice and has been studied a lot in literature. However, there is another kind of O2O business model. This research is motivated by the practice in furniture industry. Nowadays,
doi:10.4236/ojbm.2020.83065 fatcat:7piw3z7cuzdmdiji44uy2hnnoe