Summary: In this paper, we assume that the demand is sensitive to both the selling price and marketing expenditure, and that the seller decide order quantities. We consider the two-echelon supply chain models both as an non-cooperative and as a cooperative game. In the non-cooperative game scenario, Seller-Stackelberg and Buyer-Stackelberg models were considered. For the cooperative game, Pareto efficient solutions are obtained by optimizing the weighted sum of the seller’s and buyer’s objective functions. The result shows that order quantity, retail price and marketing expenditure are smaller in cooperative than in non-cooperative games. Finally, some cases are listed and sensitivity analysis is carried out.