Trade Promotion and Product Line Design With Demand Uncertainty
研究了制造商在需求不确定市场中通过独立零售商销售时，如何优化贸易促销（发票外与扫描回扣）和产品线设计，发现扫描回扣政策在多产品下更有效管理需求风险，且产品线长度影响政策偏好。
This paper investigates a manufacturer's optimal decisions on trade promotion and product line design when selling through an independent retailer in an uncertain market. Two major types of trade promotion, off-invoice and scan-back, are examined. The results demonstrate that both demand uncertainty and trade promotion policies significantly influence the retailer's ordering behavior. Specifically, high market demand volatility may induce the retailer to place positive orders, but the scan-back policy provides weaker incentives for such orders than the off-invoice policy. Moreover, when the market exhibits discrete demand uncertainty, the manufacturer may prefer the scan-back policy over the off-invoice policy, regardless of whether a single product or a product line is offered. This preference becomes stronger as the product line length increases, suggesting that the scan-back policy is more effective at managing demand uncertainty across multiple products. This study further reveals that under demand uncertainty, product line extension can be achieved by reallocating demand risk, which the manufacturer accomplishes by adopting trade promotion strategies. We also identify a policy-dependent difference in the retailer's incentives. Under the off-invoice policy, the retailer is more willing to carry a longer product line compared to under the scan-back policy. Finally, the main results hold under robustness checks incorporating marginal cost concerns and random market-size probabilities. The findings of this study provide new insights into the joint design of trade promotion and product line strategies under demand uncertainty.