Abstract
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 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.
Highlights
IntroductionMany O2O platforms provide information, product and service to online customers and direct them to offline business partners
This paper studies a two-period marketing problem in an O2O supply chain consisting of a manufacturer and an offline retailer
The manufacturer owns an online channel which markets to the online customers and directs potential customers to the offline retailer
Summary
Many O2O platforms provide information, product and service to online customers and direct them to offline business partners. 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. Shangpin Home Collection is one of the make-to-order furniture manufacturers in China who operates in an O2O environment This company sells products mainly through offline franchisees. During the two-period of marketing, the sales effort of the manufacturer such as advertisement and the service provided by the franchisee is critical to enhance the demand of online channel.
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