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Price and Rebate Optimization in Retail Platforms with Competition

Project: Research

  • Li, Hongyan Jenny (Participant)
  • Deng, Shiming, Huazhong university of Science and Technology, Wuhan (Participant)
  • Huazhong university of Science and Technology, Wuhan
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The project is motivated by the business practices in current retail platforms. Department stores and online retail sites are usually large retail channel which provides retailing venues and services for a group of suppliers. Many department store operators in China and Western countries generate the bulk of their revenue from commissions on concessionaire sales. Similar structures are also very common for online retail channel such as Amazon and Taobao (in China). Rebates are important sales promotion strategies for both suppliers and retail platform. Both the stores and their suppliers benefit from the increased customer
visits attracted by the rebate programs. However, who would be responsible for initiating the rebate program in supply chains? How the benefit and cost should be shared among parties. Moreover, the retail platform usually has multiple suppliers which may sale substitute or complementary products. When a department store plans a promotion program, the suppliers may choose to participate or not to participate the program. How the competition affect the rebate offering decisions. Our project targets at creating significant contribute to the understanding of rebates for retail platforms and their suppliers. The research will examine rebate efficiency in supply chain environment and study the incentive for each party in a supply chain in offering and participating rebate programs. This fills the gap between rebate research in marketing and
supply chain management. To provide guideline and analytic tools for companies to design their rebate program and evaluate the benefit and impact not only on the rebate issuing companies but also the entire supply chain behind that companies. To our best knowledge, this project will directly look into the possible joint rebate program between retail platform and their suppliers and study the efficiency from the perspectives of individual companies as well as the supply chain as a whole. The study will be interdisciplinary across OM, Behavioral Economics, marketing and Information Science areas. We aim at producing
three quality research papers overall.
Effective start/end date01/01/201431/12/2015

ID: 128990504