Separate and bundling selling strategies for complementary products in a participative pricing mechanism

Hemmati, M.; Ghomi, S. M. T. Fatemi; Sajadieh, Mohsen S.

doi:10.1016/j.cie.2023.109018

Cited by 9 publications

(6 citation statements)

References 41 publications

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“…Furthermore, an increase in marginal cost c affects an increase in the sales price and a decrease in the customer demand and profit of manufacturer π * m2 . Like Hemmati et al [10] and Cao et al [26], when the marginal cost c between bundling and unbundling differs significantly, customers prefer to purchase products from manufacturer 1 as it has a lower price. Thus, providing a base warranty and bundling strategy is more profitable for both manufacturers under this circumstance.…”

Section: B Mixed Bundling Scenariomentioning

confidence: 97%

“…In a duopolistic supply chain network, Jena and Ghadge [27] examined bundling decisions and advertising efforts under various power structures and price competition. Hemmati et al [10] developed two sales strategies-bundling and separate sales-for pricing complementary products using participating customer bidding.…”

Section: B Bundling Strategy In Pricing Decisionsmentioning

confidence: 99%

“…In the real-world market, prices in the unbundling strategy are typically higher than those in the bundling strategy due to a particular discount. According to Hemmati et al [10] and Cao et al [26], we consider the marginal cost in unbundling strategy c. The manufacturer 2 incurs extended warranty cost T = 1/2 kt 2 , where k is the extended warranty cost coefficient [20].…”

Section: Problem Description and Study Assumptionsmentioning

confidence: 99%

“…Apple competes with Samsung by providing a bundled base warranty and an unbundled extended warranty to gain a competitive advantage in the global smartphone market. Referring to previous studies [6], [10], other relevant parameters have been selected to effectively manage results while ensuring analytical tractability. These parameter settings are as follows: w = 0.6, β = 1.5, c = 0.1, k = 2, υ 1 = 0.1, and υ 2 = 0.4.…”

Section: A Numerical and Sensitivity Analysismentioning

confidence: 99%

“…In marketing theory, ''bundling strategy'' is the term used to describe when two or more complementary or interrelated products or services are sold as a bundle. This strategy usually offers lower prices than when each product is purchased separately or unbundled [10], [11]. In terms of warranty strategies, bundling product pricing with a warranty can increase perceived value and customer satisfaction.…”

Section: Introductionmentioning

confidence: 99%

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Warranty and Bundling Strategies for Pricing Decisions in a Duopoly

Andriani

Tseng

2023

IEEE Access

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This study examines pricing decisions by considering two manufacturers' warranty and bundling strategies using spatial competition in a duopolistic market. With the development of advanced technology and evolving societal needs, manufacturers now sell a product with its complement-a warrantyusing either a bundled base warranty or an unbundled extended warranty strategy. To investigate the impact of the bundling strategy on warranty and pricing models, we develop two scenarios for the pure bundling and mixed bundling scenarios. By constructing a Nash equilibrium model and assessing customer preferences, we determine the optimal warranty length and level of customer demand corresponding to a manufacturer's pricing and strategic decisions. The analysis demonstrates that one manufacturer's strategic decisions are interdependent with those of its competitor. Moreover, a longer warranty period in the unbundled extended warranty strategy not only attracts customers and increases demand but also imposes additional costs on manufacturers. As a result, while providing more personalized features and flexibility, the unbundled extended warranty strategy is not always more profitable. Thus, a manufacturer must carefully evaluate its warranty and bundling strategies when making pricing decisions to gain a competitive advantage. Finally, numerical and sensitivity analyzes confirm the results of the theoretical analysis and provide managerial insights.

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Section: B Mixed Bundling Scenariomentioning

confidence: 97%

Section: B Bundling Strategy In Pricing Decisionsmentioning

confidence: 99%