Cause-related Marketing Strategy in Supply Chain Considering Quality Differentiation

Cause-related marketing(CRM),as an organic combination of marketing and corporate social responsibility(CSR),has been widely used in the supply chain.However,the existing literature rarely studies the CRM strategy the in the supply chain.This paper explores the pricing decisions and CRM strategy of supply chain members by examining a supply chain system consisting of a manufacturer and a retailer,where the manufacturer produces two quality differentiated products.By developing a Stackelberg model for three scenarios,including the No CRM strategy,CRM strategy for the high-quality product,and CRM strategy for the low-quality product,this paper finds that the CRM strategy will result in higher wholesale and sales prices for the cause-related product.In addition,consumers’pro-sociality and the degree of product quality differentiation are critical to the manufacturer’s choice of CRM strategy.When the quality difference differs significantly,the manufacturer should implement CRM for the high-quality product in a market with low consumer pro-sociality and for the low-quality product in a market with high consumer pro-sociality;when the product quality difference is slight,the manufacturer should choose to implement CRM for the low-quality product regardless of consumer’s pro-sociality.Furthermore,the model is extended to that the retailer implements the CRM strategy and a retailer-led supply chain.The results indicate that CRM strategy in the supply chain is not influenced by the implementing entity or the supply chain leader.

In-house or Outsourcing R&D?Manufacturer Technology Strategy in the Presence of Market Follower Encroachment

Facing the threat of market follower encroachment,this paper constructs game theoretical models based on different channel structures and market structures,investigates following manufacturer's encroachment strategy and technology strategies,and discusses the impact of following manufacturer's strategy on quality decisions.The results show that encroachment always improves consumer surplus by slashing prices when leading manufacturer adopts in-house R&D(IRD);otherwise,it results in lower consumer surplus with mild competition if leading manufacturer is at a technological disadvantage.Furthermore,the technology strategies of following manufacturer are related to their R&D capabilities.The superior one is outsourcing R&D(ORD)for the manufacturers when their R&D capability is weak,otherwise,IRD is optimal.In a word,the leading manufacturer always prefers IRD under certain conditions,while the following manufacturer always prefers ORD.In addition,encroachment restrains quality innovative motivation under fixed or quality-sensitive R&D costs,but can improve quality level when consumers have a higher reference dependency for quality;meanwhile,the following manufacturer adopting ORD is always beneficial to quality improvement.