Can e-marketplace harness favorable winds? The interaction between brand spillover and sales channel design
摘要
Many e-marketplaces use well-known national brand (NB) sellers’ contract manufacturers and disclose that e-commerce brand (EB) products have the same contract manufacturers as NB products to take advantage of the NB’s spillover. This work investigates whether the e-marketplace should use such brand spillover to borrow the “favorable wind" of the well-known NB and the underlying mechanisms of strategy interaction between the e-marketplace’s brand spillover strategy and the NB seller’s sales channel design. Using game theory, we analyze the equilibrium outcomes in six scenarios characterized by the e-marketplace’s different brand spillover strategies and the NB seller’s different sales channel designs. We find that the e-marketplace should not blindly use brand spillover to borrow the “favorable wind" of the well-known NB since its optimal brand spillover strategy depends on the market factors like two brands’ competitive intensity, consumers’ recognition, the effectiveness of brand spillover. For the NB seller, optimizing sales channel can adjust the competition and cooperation relationship with the e-marketplace and further retard the damage caused by brand spillover to some extent. Adding an official channel or switching the reselling channel to the agency channel is an effective response to prevent the brand spillover under some conditions.