Research on Sale Strategies of Extended Service in Product Service Supply Chain

Abstract

Abstract:

Drawing up a product service supply chain composed of a product manufacturer and a retailer who provides extended warranty service, this paper explores the unbundling and bundling strategies of product and extended warranty service. We establish the optimal decision model of the manufacturer and the retailer under each of the two strategies and analyze the optimal decisions and profits of the manufacturer and the retailer. By comparing profits of the manufacturer, the retailer and the supply chain system under the two strategies, we illustrate the impacts of strategy selection on the supply chain members and the whole supply chain profits under different scenarios. In addition, the optimal sales strategy of the product service supply chain for each situation is obtained. The results show that when the bundling strategy is unfavorable (favorable) to manufacturer and retailer, they will choose the unbundling (bundling) strategy; when the bundling strategy is favorable to the retailer but detrimental to the manufacturer, the manufacturer may sometimes offer a wholesale price attractive enough for the retailer to adopt unbundling strategy. Otherwise, the manufacturer can only choose the optimal wholesale under bundling strategy.

Key words: product service supply chain, extended warranty service, bundling, unbundling

Dan Bin, Gao Yan, Zhang Shuguang. Research on Sale Strategies of Extended Service in Product Service Supply Chain[J]. , 2020, 32(4): 171-182.

References

[1] 马建华,艾兴政,唐小我. 基于延保服务的竞争供应链纵向渠道结构选择[J]. 系统工程学报, 2015,30(4):539-574
[2] 杨慧,宋华明,俞安平. 服务型制造模式的竞争优势分析与实证研究——基于江苏200家制造企业数据[J]. 管理评论, 2014,26(3):89-99
[3] Maull R., Smart A., Liang L. A Process Model of Product Service Supply Chains[J]. Production Planning & Control, 2014,25(13-14):1091-1106
[4] 易余胤,姚俊江. 基于网络外部性的延保服务供应链模型研究[J]. 管理工程学报, 2016,30(3):141-150
[5] Li K., Mallik S., Chhajed D. Design of Extended Warranties in Supply Chains under Additive Demand[J]. Production and Operations Management, 2012,21(4):730-746
[6] 但斌,娄云,马崧萱,等. 服务促进销售的产品服务供应链定价与优化策略[J]. 管理评论, 2017,29(6):113-124
[7] McCardle K. F., Rajaram K., Tang C. S. Bundling Retail Products:Models and Analysis[J]. European Journal of Operational Research, 2007,177(2):1197-1217
[8] Sheikhzadeh M., Elahi E. Product Bundling:Impacts of Product Heterogeneity and Risk Considerations[J]. International Journal of Production Economics, 2013,144(1):209-222
[9] Bakos Y., Brynjolfsson E. Bundling Information Goods:Pricing, Profits, and Efficiency[J]. Management Science, 1999,45(12):1613-1630
[10] Prasad A., Venkatesh R., Mahajan V. Optimal Bundling of Technological Products with Network Externality[J]. Management Science, 2010,56(12):2224-2236
[11] 王丽丽,吕巍,黄静,等. 捆绑价格促销对冲动性购买影响研究[J]. 管理评论, 2008,20(17):17-24
[12] Kameshwaran S., Viswanadham N., Desai V. Bundling and Pricing of Product with After-Sale Services[J]. International Journal of Operational Research, 2009,6(1):92-109
[13] Ferrer J. C., Mora H., Olivares F. On Pricing of Multiple Bundles of Products and Services[J]. European Journal of Operational Research, 2010,206(1):197-208
[14] Herrmann A., Huber F., Coulter R. H. Product and Service Bundling Decisions and Their Effects on Purchase Intention[J]. Pricing Strategy and Practice, 1997,5(3):99-107
[15] Cao Q., Geng X., Zhang J. Strategic Role of Retailer Bundling in a Distribution Channel[J]. Journal of Retailing, 2015,91(1):50-67
[16] Girju M., Prasad A., Ratchford B. T. Pure Components versus Pure Bundling in a Marketing Channel[J]. Journal of Retailing, 2013,89(4):423-437
[17] Bhargava H. K. Retailer-Driven Product Bundling in a Distribution Channel[J]. Marketing Science, 2012,31(6):1014-1021
[18] Wang Y., Sun L., Qu R., et al. Price and Service Competition with Maintenance Service Bundling[J]. Journal of Systems Science and Systems Engineering, 2015,24(2):168-189
[19] Meyer J., Shankar V. Pricing Strategies for Hybrid Bundles:Analytical Model and Insights[J]. Journal of Retailing, 2016,92(2):133-146
[20] Venkatesh R., Kamakura W. A. Optimal Bundling and Pricing under a Monopoly:Contrasting Complements and Substitutes from Independently Valued Products[J]. The Journal of Business, 2003,76(2):211-231