A Study on Retailers Double Channel Sales Promotion Strategy Based on O2O Business Mode

• 1、Wuhan universityof science and technology school of management, Wuhan 430081
• 2、Center for industrial policy and management research

Abstract：Different from taditional price competition between channels, the retailers running with O2O(Online to Offline) business mode are apt to adopt the same price tactic in the two channels. Therefore, a combination of online and offline sales promotion strategy becoming the key factor of retailers' profiting process. By establishing and solving demand models with consideration of the relatinship between price and sales promotion effort level, we find the retailers optimal price, promotion effort level, and supply chain profit, under the situations of centralized decision-making and decentralized decision making, respectively. Then, we compared the solutions between the situations of with promotion and without promotion. The results shows that when the promotion factor fall into a certain scope, the retailers' promotion activity can increase the profit. Furthermore, in order to coordinate the supply chain under the influence of the promotion, sales promotion cost sharing mechanism is adopted in this paper. Research shows that promotion cost sharing mechanism can increase the overall profit of the supply chain, so as to realize the coordination of the supply chain.

Keywords： O2O Retailers double channels Promotional effort level Sales promotion cost sharing Supply chain coordination