Research of Direct Market with Advertising in E-commerce

This paper studied the direct channel and advertising in E-commerce. With the rapid development of the Internet, many manufacturers nowadays use this technology to engage in direct sales. The mix of retailing with a direct channel adds anew dimension of competition and complementarities to a produces distribution channels. However, this also muses some questions between charnels. To study these questions we first established traditional channel model and dual market channel with competitive advertising model. Then, we present demand functions and profit functions of direct and retail market channel. Considering Stackelberg Game, we also give some propositions.