Counterfeiting is an important challenge in maintaining the security and sustainability of supply chains. This paper examines a supply chain consisting of a luxury goods manufacturer (and a retailer) in the presence of counterfeit goods. Inspired by the reality that both manufacturers and retailers have incentives to implement anti-counterfeiting, this paper combines the psychological impact of anti-counterfeiting efforts on consumers and discusses the impact of anti-counterfeiting efforts on pricing and profits. We find that: (1) anti-counterfeiting has a positive impact on the selling price of brand products and the firms’ profits. However, the impact on wholesale prices varies depending on who implements the anti-counterfeiting strategy. (2) Only when the quality of brand products is higher than the threshold, is the firm willing to input anti-counterfeiting efforts. Manufacturers in a reselling structure are more motivated to fight counterfeits. (3) Implementing anti-counterfeiting in a direct selling structure is the most effective strategy for manufacturers. Under a reselling structure, it is more beneficial for manufacturers to have the retailer input anti-counterfeiting efforts. Our study provides insights into the reasons why some manufacturers establish internal anti-counterfeiting teams under the direct selling structure, while others incentivize retailers to invest in anti-counterfeiting.

This paper analyzes how the brand company chooses to outsource customer acquisition and retention to the service supplier who is either risk neutral or averse when the customers can not only compare the marketing efforts on acquisition and retention but also have a probability not to respond to any effort. We examine four outsourcing strategies: Acquisition Outsource, Retention Outsource, Two-Service Combined Outsource and Two-Service Separated Outsource. For each outsourcing strategy, we establish the incentive contracts, determine the resulted marketing efforts, and evaluate the optimal expected profit for the brand company. Our main results reveal the significant impacts of both the customer effort comparison and the service provider’s risk preference. Customer effort comparison may help the brand company to offer better incentives to the service supplier without hurting his own profitability. The service supplier’s risk preference impacts on the brand company’s choice of outsourcing strategy. Through numerical study, we also examine how ignoring customer efforts comparison affects the brand company's profitability and the service supplier's utility, as well as the combined influence of cost efficiency and customer comparison efforts on the brand company.