Carbon emission reduction and precision marketing decisions of a platform supply chain

Abstract

Precision marketing is useful for understanding consumers' low-carbon awareness (CLA). Considering a consignment contract and a reselling contract with a fixed wholesale price, we develop Stackelberg game models between the manufacturer and the platform under different sales contracts. We investigate how precision marketing and contract format impact supply chain members' decision-making and consumer surplus. We find, in any case, the optimal decisions of supply chain members increase with CLA and the manufacturer’s emission reduction efficiency. However, the impact of the mean efficiency and accuracy efficiency of precision marketing and the precision marketing efficiency on the companies' decisions depends on the contract format and production costs. Precision marketing is beneficial for both the platform and consumers under each contract, but it is not always beneficial for the manufacturer. Regardless of whether precision marketing is used, both the platform and the manufacturer prefer the reselling contract if the wholesale price is moderate; otherwise, a transfer payment contract is needed for them to reach an agreement on which contract should be adopted. Precision marketing increases total carbon emissions under the reselling contract, while it decreases total carbon emissions under the consignment contract. Precision marketing increases social welfare under both contracts. With precision marketing, social welfare is greater under the reselling contract than under the consignment contract. This paper is the first to investigate the platform supply chain’s decision-making with different sales contracts considering the impact of precision marketing on both the mean value and accuracy improvement of uncertain market demand under low-carbon environment.