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Warranty or education?: An analysis of marketing strategy choices for remanufactured products

Manman Wang (International Institute of Finance, School of Management, University of Science and Technology of China, Hefei, China)
Sheng Ang (International Institute of Finance, School of Management, University of Science and Technology of China, Hefei, China)
Feng Yang (International Institute of Finance, School of Management, University of Science and Technology of China, Hefei, China)
Jian Song (School of Business, Anhui University, Hefei, China)

Asia Pacific Journal of Marketing and Logistics

ISSN: 1355-5855

Article publication date: 5 April 2022

Issue publication date: 9 March 2023

400

Abstract

Purpose

Implementing effective marketing strategies can reduce consumers' perceived risks and promote the development of the remanufacturing market. The paper aims to explore the impact of two marketing strategies on the remanufacturing decisions of an original equipment manufacturer (OEM) and investigates the design of the optimal warranty service (WS) and consumer education (CE) strategies. Moreover, the authors also examine the optimal marketing strategy choices using the three criteria of OEM: profitability, consumer surplus and environmental impact (EI).

Design/methodology/approach

The authors develop a stylized model by game theory, which characterizes how an OEM that produces and sells both new and remanufactured products (RPs) should design the optimal remanufacturing marketing activity, and how to choose between different remanufacturing marketing strategies. Moreover, consumer's utility theory is used to describe consumers' perception of different remanufacturing marketing strategies to derive product demand.

Findings

The results reveal that increasing the warranty and education levels will not always improve the firm's profitability; the result depends heavily on the size of the functionality-oriented consumer (FOC) segment. Remanufacturing marketing strategies might harm the OEM, consumers and environment under certain conditions. Moreover, the optimal marketing strategy selections are jointly influenced by the FOC segment and the new production cost. There exist triple-win regions in which the OEM should not hesitate to perform WS and CE.

Originality/value

Few studies focus on the design and choice of remanufacturing marketing strategies, especially considering the role of consumer perceived behavior. This research contributes the behavioral remanufacturing marketing management and provides managerial implications for the implementation of OEM remanufacturing marketing strategy.

Keywords

Acknowledgements

This work was supported by the National Natural Science Foundation of China (71991464/71991460 and 71921001), Anhui Provincial Natural Science Foundation (2108085MG238) and Fundamental Research Funds for the Central Universities (WK2040000027 and WK2040160028).

Citation

Wang, M., Ang, S., Yang, F. and Song, J. (2023), "Warranty or education?: An analysis of marketing strategy choices for remanufactured products", Asia Pacific Journal of Marketing and Logistics, Vol. 35 No. 3, pp. 511-532. https://doi.org/10.1108/APJML-05-2021-0331

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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