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Purpose

This research explores how digital coupons can be leveraged to reduce channel competition and enhance collaboration in the manufacturer-reseller business-to-business (B2B) market–an area that has not been previously addressed in the literature.

Design/methodology/approach

We employ a game-theoretical approach to analyze and compare different scenarios, deriving optimal marketing strategies for business managers.

Findings

Our results reveal that, compared to manufacturer-funded digital coupons, two novel mechanisms - reseller-funded digital coupons and cost-sharing of digital coupons -are more effective in mitigating channel competition and benefiting both the manufacturer and reseller. However, a key challenge arises: While manufacturers prefer a cost-sharing approach, resellers favor fully funding their own digital coupons. To reconcile these preferences, we introduce an innovative hybrid mechanism that combines quantity discounts with cost-sharing of digital coupons. This approach effectively reduces channel conflict and maximizes benefits for all parties in the online-to-offline (O2O) B2B market.

Originality/value

This research fills a critical gap in the literature on O2O coordination by developing innovative strategies to reduce channel competition in the manufacturer-reseller B2B market. Our findings are particularly relevant as e-commerce continues to grow while traditional offline retailing maintains a significant market presence.

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