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Buy-One-Get-One Promotions in a Two-Echelon Supply Chain | Management Science
Source: pubsonline.informs.org
Article summary:
1. BOGO promotions can outperform price reduction (PR) and everyday low price (EDLP) policies in a manufacturer-retailer supply chain, depending on the product and consumer behavior.
2. BOGO reduces double marginalization, but its effectiveness diminishes when PR expands market size more than BOGO.
3. When consumers stockpile without increasing consumption and/or production cost is high, EDLP is best.
Article analysis:
The article “Buy-One-Get-One Promotions in a Two-Echelon Supply Chain | Management Science” provides an analysis of buy-one-get-one (BOGO) promotions in a manufacturer–retailer supply chain. The authors identify conditions under which BOGO outperforms price reduction (PR) and everyday low price (EDLP) policies, as well as how BOGO reduces double marginalization. The article is generally reliable and trustworthy; however, there are some potential biases that should be noted.
First, the article does not explore counterarguments to the claims made about BOGO being better than PR or EDLP in certain situations. While the authors provide evidence for their claims, it would be beneficial to consider any potential drawbacks of using BOGO instead of other pricing strategies. Additionally, the article does not discuss any possible risks associated with using BOGO promotions, such as increased costs for manufacturers or retailers due to offering discounts on multiple units of a product at once.
Second, the article does not present both sides of the argument equally; rather, it focuses primarily on the benefits of using BOGO over other pricing strategies without considering any potential drawbacks or risks associated with it. This could lead readers to believe that BOGO is always preferable to other pricing strategies without considering all factors involved in making such decisions.
Finally, there is some promotional content included in the article that could be seen as biased towards promoting BOGO over other pricing strategies without providing sufficient evidence for why this might be true in all cases. For example, the authors state that “BOGO induces more consumers to buy and consume two units” without providing any evidence for this claim or exploring any potential drawbacks associated with this strategy.
In conclusion, while this article provides an interesting analysis of buy-one-get-one promotions in a two-echelon supply chain and identifies conditions under which they may outperform other pricing strategies, there are some potential biases that should be noted when evaluating its trustworthiness and reliability.