Cause-Related Marketing Strategy of a Transnational Supply Chain Considering Heterogeneity of Consumers' Public Welfare Preference

Abstract

With the further development of economic globalization, transnational supply chain is faced with three bottom line principles. Enterprises need to take social benefits into account while pursuing economic benefits. Cause-related marketing is an effective way for enterprises to improve corporate image, undertake social responsibility and obtain economics benefits at the same time. In this paper, we consider a two-echelon transnational supply chain structure composed of an overseas manufacturer and a domestic retailer, and both the manufacturer and the retailer can perform cause-related marketing. By comparing the size of equilibrium solution under the two scenarios, we analyze the impact of tariff and consumer public welfare preference on the results. The results show that the retailer's CRM level in RCRM scenario is higher than that in the MCRM scenario. The tariff will reduce the channel profit, and the consumer's preference for public welfare will improve the channel profit, the retailer's implementation of CRM will bring more profit to the supply chain. Keywords- Cause-related marketing, Supply chain management, Public welfare preference, Game theory