Cooperative Promotion of Cross-Market Firms Adopting 3D Printing Technology

Abstract

Traditionally, firms often run independent promotional activities to attract consumers and improve their competitiveness. With the rapid development of three-dimensional (3D) printing, also known as additive manufacturing, a growing number of firms in different markets cooperate to conduct cooperative promotion to meet consumer demand. Different from independent promotion, which means that firms promote their products through their individual promotional activities, when they carry out cooperative promotion, in addition to their individual promotional activities, they also carry out a series of cooperative promotional activities to promote their products. For such cross-market cooperation, it is of importance to consider the unit cost of production and the promotion cost to achieve competitive advantage and sustainability of the supply chain. We develop game-theoretic models to investigate the factors that make firms pursue cooperative promotion and how cooperative promotion affects their optimal decisions. We find that whether or not the firms join cooperative promotion mainly depends on the impacts of price, individual promotional activities, and cooperative promotional activities on demand, as well as the unit cost of production. Whether or not firms are willing to make more contribution to cooperative promotion depends on the difference between the efforts of individual promotional activities and cooperative promotional activities. In addition, as the consumer demand for the product increases, the firms will also increase their investments in cooperative and independent promotional activities. Moreover, as the unit cost of production and the impact of cooperative promotional activities on demand change, pursuing cooperative promotion is not necessarily more profitable than pursuing independent promotion.