Digital coupon marketing strategies to mitigate channel competition in the business-to-business market

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.