Coordination of a sustainable supply chain contributing in a cause-related marketing campaign

Abstract

This paper investigates a two-echelon supply chain coordination problem in presence of consumer social awareness (CSA) when SC contributes in a cause-related marketing campaign. The channel consists of a manufacturer and a retailer where the manufacturer contributes in a CM campaign by donating a sum per sold item to the CM campaign. Two scenarios are analysed: (1) In the first scenario, the donation size as a portion of retail price is the only decision variable and paid by the manufacturer (2) In the second scenario, in addition to the donation size, retail price is a decision variable. In the first scenario, a cost sharing contract is proposed to improve channel performance while in the second scenario a collaborative model is developed to coordinate decisions of channel members. The numerical investigations illustrate that the proposed collaborative model not only increases the channel/members profit, but also creates a more socially concerned SC with lower retail prices. Moreover, the developed model helps supply chain managers to more effectively contribute in a CM campaign by making decision correctly on donation size.