Retailpriceandpromotionaleffortaretwoimportantparametersonwhichdemandofacommoditylargelydepends.Thispaperdevelopsandanalyzesatwo-echelonsupplychainwheremarketdemanddependsonbothretailpriceandsaleseffort.Thecentralizedmodelisstudiedasthebenchmarkcase,andthewholesaleprice-onlycontractisstudiedasthebasecaseinwhicheachentitytriestomaximizeitsinpidualprofit.Differentcontractmechanismsareimplementedtooutperformthebasecaseintermsofbothtotalchain'saswellasinpidualprofits.Comparisonsamongthecoordinatingcontractsareprovidedsothatanyentitymaychoosethebetteronefromavailablecontractsafterthecontractparametersarenegotiated.Themodelisextensivelyexaminedthroughanumericalexample.
