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- Title
Service cooperation and marketing strategies of infomediary and online retailer with eWOM effect.
- Authors
Chen, Yuangao; Yang, Shuiqing; Wang, Zhoujing
- Abstract
In contemporary electronic commerce, an infomediary displays electronic word-of-mouth (eWOM) information of customers and links shoppers to retail websites, thus acting as an intermediary between buyers and sellers. This paper studies an online supply chain system in which the infomediary presents demand-referral services to online retailers based on eWOM of customer information. It is assumed that online demand is affected by retailer price, referral service effort, and eWOM. The demand function is extended and developed based on Bass's model. A Stackelberg game model of service cooperation is presented, and then the optimal decisions on retailers' prices and infomediary service efforts in the decentralized supply chain are analyzed. Moreover, the profits and cumulative sales in supply chain equilibrium are analyzed under several parameters. A computational experiment is implemented to verify the validity and effectiveness of the model. The results show that price sensitivity has a significant negative effect on cumulative retailer sales and the profits of retailers and infomediary, but the effect of service sensitivity and sales periods on profits is absolutely positive. Specifically, eWOM has two different impacts on the profit of the retailer and infomediary respectively. Finally, conclusions and management implications for supply chain parties are presented, along with some possible directions for further research.
- Subjects
MARKETING planning; INTERNET stores; COORDINATION (Human services); MARKETING agreements; BUSINESS to consumer transactions; EMAIL systems in marketing; YOUNG adults; HIGHER education
- Publication
Information Technology & Management, 2016, Vol 17, Issue 2, p109
- ISSN
1385-951X
- Publication type
Article
- DOI
10.1007/s10799-015-0237-1