Selling Versus Leasing of Durable Goods: The Impact on Marketing Channels

Chau, Ngan N.; Schulz, Steven A.

doi:10.1080/1046669x.2013.830800

Cited by 3 publications

(3 citation statements)

References 37 publications

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“…Tang and Deo [11] analyzed the leasing price and duration competition between two retailers that only offer lease services. e model of Chau and Schulz [12] depicts two manufacturers supplying goods to the market through their own intermediaries. Manufacturers can decide whether to sell or lease their products to intermediaries, and intermediaries can also decide whether to lease or sell their goods to consumers.…”

Section: Selling Versus Leasingmentioning

confidence: 99%

“…Existing studies on the choice of enterprise leasing and selling modes all focus the mode selection of manufacturers who directly deal with consumers [3-5, 24, 25], or they focus on the retailers mode selection without considering different leasing preferences of consumers [11][12][13][14]. In the electronic products industry, the rise in consumer acceptance of leasing has brought new opportunities for retailers to transform to leasing modes.…”

Section: Consumers' Preferences For Leasingmentioning

confidence: 99%

“…Assume that the unit manufacturing cost of the electronic product is c. e manufacturer, as the leader, decides the wholesale price of the electronic product as w [26,27]. Assume that the manufacturer will be able to immediately respond to the entire product demand in the market, and there will be no shortage or overproduction of the electronic product [12].…”

Section: Problem Description and Modelingmentioning

confidence: 99%

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How Does the Electronic Products Retailer Transform Operational Modes Considering Consumer Preferences for Leasing?

Tian

2022

Mathematical Problems in Engineering

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Consumer interest in renting brand-new electronic products has increased recently. Some retailers started to lease them, but they remarkably depreciate shortly after leasing. If their rental income cannot bring in enough profit, should a retailer lease them? This paper uses consumer preferences for leasing to describe their rental utility. It develops an analytical framework to study how the retailer selects operational modes. In a supply chain consisting of a manufacturer and a retailer, three different operational modes are analyzed: pure selling (S), pure leasing (L), and hybrid selling-leasing (SL). Results mainly show that when consumer preferences for leasing exceed a certain threshold, both the manufacturer’s and the retailer’s profits can be increased if the retailer transforms the business operational mode from S to SL/L. When consumer preferences for leasing are within a certain range, the retailer’s profits can be increased if the operational mode is transformed from S/L to SL. This happens as both consumers’ lease and purchase requirements for electronic products are met after the transformation. The wholesale price, leasing price, selling price, and the manufacturer’s profit all rise in the SL mode as consumer preference for leasing rises, but the retailer’s profit falls. Only if the retailer cooperates with the manufacturer can the operational mode be transformed from S/L to SL when consumer preferences for leasing are lower, and the coordination contract can achieve Pareto improvement in the profits of both the manufacturer and the retailer.

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Section: Selling Versus Leasingmentioning

confidence: 99%

Section: Consumers' Preferences For Leasingmentioning

confidence: 99%