Quantitative Marketing and Economics

, Volume 11, Issue 2, pp 263–287 | Cite as

Manufacturer marketing initiatives and retailer information sharing

Article

Abstract

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.

Keywords

Disclosure Information sharing Supply chain management Marketing investment 

JEL Classification

D82 L11 M31 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Fisher College of BusinessOhio State UniversityColumbusUSA
  2. 2.School of ManagementYale UniversityNew HavenUSA
  3. 3.Yonsei School of BusinessYonsei UniversitySeodaemun-guKorea

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