Manufacturer marketing initiatives and retailer information sharing
Purchase on Springer.com
$39.95 / €34.95 / £29.95*
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.
This research examines a retailer’s incentive to share information with its supplier when the supplier can also undertake initiatives to increase retail demand. It is well known that a retailer is averse to sharing market information with a manufacturer due to concern for a manufacturer’s strategic use of such information. This research shows that despite such strategic exploitation of market information, a retailer may want to establish information sharing channels with its supplier. Information sharing essentially shifts power upstream which, in turn, enhances the manufacturer’s incentive to bear costs to boost retail demand: the manufacturer is induced to invest merely by knowing that information is on its way. Hence, the retailer benefits from information sharing ex ante despite the costly ex post exploitation by the manufacturer. This finding is a stark contrast to the most of previous results which consistently point out how bad it is for the manufacturer to have the retailer’s demand information before setting prices. In fact, due to the investment effect, information sharing can lead to gains for the retailer, manufacturer, and consumers alike.
- Arya, A., Frimor, H., Mittendorf, B. (2010). Discretionary disclosure of proprietary information in a multi-segment firm. Management Science, 56(4), 645–658. CrossRef
- Arya, A., Mittendorf, B., Yoon, D.-H. (2012). Incentives for information transparency in the presence of suppliers and competitors. Working paper.
- Baron, D. (1988). Regulation and legislative choice. RAND Journal of Economics, 19(3), 467–477. CrossRef
- Bergen, M., & John, G. (1997). Understanding cooperative advertising participation rates in conventional channels. Journal of Marketing Research, 34(3), 357–369. CrossRef
- Besanko, D., & Perry, M.K. (1993). Equilibrium incentives for exclusive dealing in a differentiated products oligopoly. RAND Journal of Economics, 24(4), 646–667. CrossRef
- Botosan, C.A., & Stanford, M. (2005). Managers’ motives to withhold segment disclosures and the effect of SFAS No. 131 on analysts’ information environment. The Accounting Review, 80(3), 751–771. CrossRef
- Cachon, G.P., & Fisher, M. (2000). Supply chain inventory management and the value of shared information. Management Science, 46(8), 1032–1048. CrossRef
- Chu, W., & Desai, P.S. (1995). Channel coordination mechanism for customer satisfaction. Marketing Science, 14(4), 343–359. CrossRef
- Coughlan, A., Anderson, E., Stern, L.W., El-Ansary, A. (2001). Marketing channels. Upper Saddle River, New Jersey: Prentice-Hall, Inc.
- Desiraju, R., & Moorthy, S. (1997). Managing a distribution channel under asymmetric information with performance requirements. Management Science, 43(12), 1628–1644. CrossRef
- Discount Store News (1998). VF corp. wields vmi power, S8–S9.
- Dukes, A., Gal-Or, E., Geylani, T. (2011). Who benefits from bilateral information exchange in a retail channel? Economics Letters, 112, 210–212. CrossRef
- Fisher, M.L., Hammond, J.H., Obermeyer, W.R., Raman, A. (1994). Making supply meet demand. Harvard Business Review, (pp. 83–93).
- Gal-Or, E. (1985). Information sharing in oligopoly. Econometrica, 53(2), 329–344. CrossRef
- Gal-Or, E. (1986). Information transmission–Cournot and Bertrand equilibria. Review of Economic Studies, 53(1), 85–92. CrossRef
- Gal-Or, E., Geylani, T., Dukes, A. (2008). Information sharing in a channel with partially informed retailers. Marketing Science, 27(4), 642–658. CrossRef
- Gavirneni, S., Kapuscinski, R., Tayur, S. (1999). Value of information in capacitated supply chain. Management Science, 45(1), 16–24. CrossRef
- Grossman, S. (1981). The informational role of warranties and private disclosure about product quality. Journal of Law and Economics, 24, 461–489. CrossRef
- Guo, L. (2009). The benefits of downstream information acquisition. Marketing Science, 28(3), 457–471. CrossRef
- Guo, L., & Iyer, G. (2010). Information acquisition and sharing in a vertical relationship. Marketing Science, 29(3), 483–506. CrossRef
- Gupta, S., & Loulou, R. (1998). Process innovation, product differentiation, and channel structure: strategic incentives in a duopoly. Marketing Science, 17(4), 301–316. CrossRef
- He, C., Marklund, J., Vossen, T. (2008). Vertical information sharing in a volatile market. Marketing Science, 27(3), 513–530. CrossRef
- Lee, H.L., So, K.C., Tang, C.S. (2000). The value of information sharing in a two-level supply chain. Management Science, 46(5), 626–643. CrossRef
- Li, L. (1985). Cournot oligopoly with information sharing. RAND Journal of Economics, 16(4), 521–536. CrossRef
- Li, L. (2002). Information sharing in a supply chain with horizontal competition. Management Science, 48(9), 1196–1212. CrossRef
- Li, L., & Zhang, H. (2008). Confidentiality and information sharing in supply chain coordination. Management Science, 54(8), 1467–1481. CrossRef
- Narayanan, V.G., & Raman, A. (2004). Aligning incentives in supply chains. Harvard Business Review (pp. 2–10).
- Raghunathan, S. (2001). Information sharing in a supply chain: a note on its value when demand is nonstationary. Management Science, 47(4), 605–610. CrossRef
- Sender, I. (1998). Microplanning jeanswear for the masses. Chain Store Age Executive, 74(1), 60–62.
- Shapiro, C. (1986). Exchange of cost information in oligopoly. Review of Economic Studies, 53(3), 433–446. CrossRef
- Singh, N., & Vives, X. (1984). Price and quantity competition in a differentiated duopoly. RAND Journal of Economics, 15(4), 546–554. CrossRef
- Srinivasan, K., Kekre, S., Mukhopadhyay, T. (1994). Impact of electronic data interchange technology on JIT shipments. Management Science, 40(10), 1291–1304. CrossRef
- Street, D.L., Nichols, N.B., Gray, S.J. (2000). Segment disclosures under SFAS No. 131: has business segment reporting improved? Accounting Horizons, 14(3), 259–285. CrossRef
- Supermarket News (2009). Big retailers, share data: GMA.
- Wang, E.T.G., & Seidmann, A. (1995). Electronic data interchange: competitive externalities and strategic implementation policies. Management Science, 41(3), 401–418. CrossRef
- Manufacturer marketing initiatives and retailer information sharing
Quantitative Marketing and Economics
Volume 11, Issue 2 , pp 263-287
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Information sharing
- Supply chain management
- Marketing investment
- Industry Sectors
- Author Affiliations
- 1. Fisher College of Business, Ohio State University, 454 Fisher Hall, 2100 Neil Avenue, Columbus, OH, 43210, USA
- 2. School of Management, Yale University, 135 Prospect Street, New Haven, CT, 06520, USA
- 3. Yonsei School of Business, Yonsei University, 50 Yonsei-ro, Seodaemun-gu, Seoul, 120-749, Korea