Abstract
In the digital platform era, omni-channel marketing is widely adopted. The efficiency of marketing investment will affect the revenues and profits of the firms. On one hand, the firms endeavour to adjust their marketing strategies to maximize their profits; on the other hand, the retailer and manufacturer have their own risk preferences, which will affect their decision making in omni-channel marketing strategies. We address these emerging issues by conducting a theoretical mean-risk analysis. We find that the optimal online marketing investment is not always larger than the offline counterpart, even when the online ads’ influence is large. We uncover that the integrated omni-channel marketing effect is a critical factor which affects the expected profits derived from both channels. Furthermore, we extend the analysis by considering the risk preferences of the retailer and manufacturer as well as demand uncertainty and correlation. Important managerial insights are generated.
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