TY - JOUR
T1 - Implications of channel structure for marketing remanufactured products
AU - Xiong, Yu
AU - Yan, Wei
PY - 2016/2/1
Y1 - 2016/2/1
N2 - Even though more and more manufacturers are selling remanufactured products through their own e-channels or subcontracting the marketing activity to third parties, there is scant literature addressing the implications of channel structures for marketing remanufactured products. To fill this void, we analyse two two-period models in which a manufacturer sells remanufactured products either: 1) through its own e-channel (Model M); 2) through a third party (Model 3P). For both these models, we identify the remanufacturing cost savings thresholds that determine the strategic choice. Our analysis suggests that the retailer can benefit from the strategy of selling remanufactured products through a manufacturer-owned e-channel but that selling remanufactured products through a third party is always detrimental to the reseller. Among other results, we find that when the remanufacturing cost savings is not too pronounced, the manufacturer makes more profit in Model 3P, but when the remanufacturing cost savings is pronounced, the opposite is true.
AB - Even though more and more manufacturers are selling remanufactured products through their own e-channels or subcontracting the marketing activity to third parties, there is scant literature addressing the implications of channel structures for marketing remanufactured products. To fill this void, we analyse two two-period models in which a manufacturer sells remanufactured products either: 1) through its own e-channel (Model M); 2) through a third party (Model 3P). For both these models, we identify the remanufacturing cost savings thresholds that determine the strategic choice. Our analysis suggests that the retailer can benefit from the strategy of selling remanufactured products through a manufacturer-owned e-channel but that selling remanufactured products through a third party is always detrimental to the reseller. Among other results, we find that when the remanufacturing cost savings is not too pronounced, the manufacturer makes more profit in Model 3P, but when the remanufacturing cost savings is pronounced, the opposite is true.
KW - distribution channels
KW - remanufacturing
KW - market cannibalisation
KW - game theory
U2 - 10.1504/EJIE.2016.075110
DO - 10.1504/EJIE.2016.075110
M3 - Article
VL - 10
SP - 126
EP - 144
JO - European Journal of Industrial Engineering
JF - European Journal of Industrial Engineering
SN - 1751-5254
IS - 1
ER -