Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce? (2024)

Hu, L., Zhang, M. (2023). Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce? International Journal of Production Economics, 266, Article 109031. https://doi.org/10.1016/j.ijpe.2023.109031

Hu, Li ; Zhang, Mengwei ; Wen, Xin. / Optimal distribution strategy of coupons on e-commerce platforms : Sufficient or scarce?. In: International Journal of Production Economics. 2023 ; Vol. 266.

@article{e4b5504dc42e440da2417c342057f781,

title = "Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce?",

abstract = "With the growth of the digital economy, platform-led coupons are becoming an increasingly popular marketing approach. How to optimally design coupon strategies to achieve the coordination between the product merchant and platform has become critical in platform supply chain management. This paper studies a platform-led coupon distribution problem and analyzes the optimal strategies of the platform and merchant: who bears the coupon cost and how many coupons should be offered. We propose a Stackelberg game in which the platform acts as the leader and decides the coupon denomination. Then, the merchant, as the follower, decides the product's selling price. Consumers are divided into high-frequency and low-frequency consumers according to their heterogeneity in consumption frequency. Our analysis shows that when the platform bears the cost, under the combined effect of the highest denomination and the highest product selling price, the platform and the merchant can realize coupon cooperation under the supply-adequate strategy, which means the number of coupons can satisfy the shopping frequency of all consumers. When the merchant bears the cost, the platform still tends to distribute more coupons. However, the merchant will suffer due to the losses caused by the coupon costs. To reach coupon cooperation, the platform can give up the excessive exploitation of the merchant by adjusting the coupon denomination.",

keywords = "Cost bearing structure, Coupon quantity, Coupon strategy, E-commerce platform, Stackelberg game",

author = "Li Hu and Mengwei Zhang and Xin Wen",

note = "Funding Informatio: This research was supported by the National Natural Science Foundation of China (Nos. 72271115, 72202196, 71801210). Publisher Copyright: {\textcopyright} 2023 Elsevier B.V.",

year = "2023",

month = dec,

doi = "10.1016/j.ijpe.2023.109031",

language = "English",

volume = "266",

journal = "International Journal of Production Economics",

issn = "0925-5273",

publisher = "Elsevier",

}

Hu, L, Zhang, M 2023, 'Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce?', International Journal of Production Economics, vol. 266, 109031. https://doi.org/10.1016/j.ijpe.2023.109031

Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce? / Hu, Li; Zhang, Mengwei; Wen, Xin.
In: International Journal of Production Economics, Vol. 266, 109031, 12.2023.

Research output: Journal article publication › Journal article › Academic research › peer-review

TY - JOUR

T1 - Optimal distribution strategy of coupons on e-commerce platforms

T2 - Sufficient or scarce?

AU - Hu, Li

AU - Zhang, Mengwei

AU - Wen, Xin

N1 - Funding Informatio:This research was supported by the National Natural Science Foundation of China (Nos. 72271115, 72202196, 71801210).Publisher Copyright:© 2023 Elsevier B.V.

PY - 2023/12

Y1 - 2023/12

N2 - With the growth of the digital economy, platform-led coupons are becoming an increasingly popular marketing approach. How to optimally design coupon strategies to achieve the coordination between the product merchant and platform has become critical in platform supply chain management. This paper studies a platform-led coupon distribution problem and analyzes the optimal strategies of the platform and merchant: who bears the coupon cost and how many coupons should be offered. We propose a Stackelberg game in which the platform acts as the leader and decides the coupon denomination. Then, the merchant, as the follower, decides the product's selling price. Consumers are divided into high-frequency and low-frequency consumers according to their heterogeneity in consumption frequency. Our analysis shows that when the platform bears the cost, under the combined effect of the highest denomination and the highest product selling price, the platform and the merchant can realize coupon cooperation under the supply-adequate strategy, which means the number of coupons can satisfy the shopping frequency of all consumers. When the merchant bears the cost, the platform still tends to distribute more coupons. However, the merchant will suffer due to the losses caused by the coupon costs. To reach coupon cooperation, the platform can give up the excessive exploitation of the merchant by adjusting the coupon denomination.

AB - With the growth of the digital economy, platform-led coupons are becoming an increasingly popular marketing approach. How to optimally design coupon strategies to achieve the coordination between the product merchant and platform has become critical in platform supply chain management. This paper studies a platform-led coupon distribution problem and analyzes the optimal strategies of the platform and merchant: who bears the coupon cost and how many coupons should be offered. We propose a Stackelberg game in which the platform acts as the leader and decides the coupon denomination. Then, the merchant, as the follower, decides the product's selling price. Consumers are divided into high-frequency and low-frequency consumers according to their heterogeneity in consumption frequency. Our analysis shows that when the platform bears the cost, under the combined effect of the highest denomination and the highest product selling price, the platform and the merchant can realize coupon cooperation under the supply-adequate strategy, which means the number of coupons can satisfy the shopping frequency of all consumers. When the merchant bears the cost, the platform still tends to distribute more coupons. However, the merchant will suffer due to the losses caused by the coupon costs. To reach coupon cooperation, the platform can give up the excessive exploitation of the merchant by adjusting the coupon denomination.

KW - Cost bearing structure

KW - Coupon quantity

KW - Coupon strategy

KW - E-commerce platform

KW - Stackelberg game

UR - http://www.scopus.com/inward/record.url?scp=85172344656&partnerID=8YFLogxK

U2 - 10.1016/j.ijpe.2023.109031

DO - 10.1016/j.ijpe.2023.109031

M3 - Journal article

AN - SCOPUS:85172344656

SN - 0925-5273

VL - 266

JO - International Journal of Production Economics

JF - International Journal of Production Economics

M1 - 109031

ER -

Hu L, Zhang M, Wen X. Optimal distribution strategy of coupons on e-commerce platforms: Sufficient or scarce? International Journal of Production Economics. 2023 Dec;266:109031. doi: 10.1016/j.ijpe.2023.109031