Cooperative advertising models in supply chain management: A review

• We review OR literature on (vertical) cooperative advertising.
• We give a comprehensive survey on relevant mathematical models.
• Main criteria are general model setting, demand functions and game-theoretic concepts.

This paper reviews articles on cooperative advertising, a topic which has gained substantial interest in the recent years. Thereby, we first briefly distinguish five different definitions of cooperative advertising which can be found in operations research literature. After that, we concentrate on vertical cooperative advertising, which is the most common object of investigation and is understood as a financial agreement where a manufacturer offers to pay a certain share of his retailer’s advertising expenditures. In total, we identified 58 scientific papers considering mathematical modeling of vertical cooperative advertising. These articles are then analyzed with regard to their general model setting (e.g., the underlying supply chain structure and design of the cooperative advertising program). After that, we explain the different demand and cost functions that are employed, whereupon we distinguish between static and dynamic models. The last dimension of our review is dedicated to the game-theoretic concepts which are mostly used to reflect different forms of distribution of power within the channel.