Intertemporal Product Management with Strategic Consumers: The Value of Defective Product Returns

Published Online:https://doi.org/10.1287/msom.2021.0972

References

  • Apple (2017) Exchange and repair extension programs. Accessed May 10, 2020, https://www.apple.com/support/exchange_repair/.Google Scholar
  • Atasu A, Guide VD, Van Wassenhove LN (2008a) Product reuse economics in closed-loop supply chain research. Production Oper. Management 17(5):483–496.CrossrefGoogle Scholar
  • Atasu A, Guide VD, Van Wassenhove LN (2010) So what if remanufacturing cannibalizes my new product sales? California Management Rev. 52(2):56–76.CrossrefGoogle Scholar
  • Atasu A, Sarvary M, Van Wassenhove LN (2008b) Remanufacturing as a marketing strategy. Management Sci. 54(10):1731–1746.LinkGoogle Scholar
  • Besanko D, Winston WL (1990) Optimal price skimming by a monopolist facing rational consumers. Management Sci. 36(5):555–567.LinkGoogle Scholar
  • Broida R (2014) RefurbMe app finds refurbished Apple deals on the go. Accessed April 2, 2020, https://www.cnet.com/news/refurbme-app-finds-refurbished-apple-deals-on-the-go/.Google Scholar
  • Bulow JI (1982) Durable-goods monopolists. J. Political Econom. 90(2):314–332.CrossrefGoogle Scholar
  • Bulow JI (1986) An economic theory of planned obsolescence. Quart. J. Econom. 101(4):729–749.CrossrefGoogle Scholar
  • Business Wire (2011) Steady return rate for consumer electronics, CEA study finds: Most returns are exchanged for same product. Accessed December 19, 2020, https://www.businesswire.com/news/home/20111219006332/en/.Google Scholar
  • Calantone RJ, di Benedetto CA (1988) An integrative model of the new product development process. J. Product Innovation Management 5(3):201–215.CrossrefGoogle Scholar
  • Calmon AP, Jue-Rajasingh D, Romero G, Stenson J (2019) Operational strategies for distributing durable goods in the base of the pyramid. Working paper, INSEAD and Rotman School of Management, University of Toronto.Google Scholar
  • Chen BX, Sang-Hun C (2016) Accessed October 11, 2020, Why Samsung abandoned its Galaxy Note 7 flagship phone. https://nyti.ms/2dTV6Uf.Google Scholar
  • Clover J (2019) Apple refurbished products: Should you buy them? Accessed May 3, 2020, https://www.macrumors.com/guide/buying-refurbished-apple-products/.Google Scholar
  • Coase RH (1972) Durability and monopoly. J. Law Econom. 15(1):143–149.CrossrefGoogle Scholar
  • Coldewey D (2017) Nintendo blames Switch Joy-Con issue on “manufacturing variation,” offers fix. Accessed March 22, 2020, http://tcrn.ch/2mtBgEu.Google Scholar
  • Consumer Reports (2018) Should you buy refurbished electronics? Accessed April 20, 2020, http://www.consumerreports.org/electronics-computers/should-you-buy-refurbished-electronics/.Google Scholar
  • Davis S, Gerstner E, Hagerty M (1995) Money back guarantees in retailing: Matching products to consumer tastes. J. Retailing 71(1):7–22.CrossrefGoogle Scholar
  • Davis S, Hagerty M, Gerstner E (1998) Return policies and the optimal level of “hassle.” J. Econom. Bus. 50(5):445–460.CrossrefGoogle Scholar
  • Debo LG, Toktay LB, Van Wassenhove LN (2005) Market segmentation and product technology selection for remanufacturable products. Management Sci. 51(8):1193–1205.LinkGoogle Scholar
  • Desai P, Purohit D (1998) Leasing and selling: Optimal marketing strategies for a durable goods firm. Management Sci. 44(11, part 2):S19–S34.LinkGoogle Scholar
  • DPReview (2012) Refurbished/importing. Accessed December 3, 2020, https://www.dpreview.com/forums/thread/3345939.Google Scholar
  • Ferguson ME, Toktay LB (2006) The impact of competition on recovery strategies. Production Oper. Management 15(3):351–368.CrossrefGoogle Scholar
  • Ferguson ME, Guide VD, Souza GC (2006) Supply chain coordination for false failure returns. Manufacturing Service Oper. Management 8(4):376–393.LinkGoogle Scholar
  • Ferrer G, Swaminathan JM (2006) Managing new and remanufactured products. Management Sci. 52(1):15–26.LinkGoogle Scholar
  • Guide VD, Li J (2010) The potential for cannibalization of new products sales by remanufactured products. Decision Sci. 41(3):547–572.CrossrefGoogle Scholar
  • Guide VD, Souza GC, Van Wassenhove LN, Blackburn JD (2006) Time value of commercial product returns. Management Sci. 52(8):1200–1214.LinkGoogle Scholar
  • Heathman A (2017) We may finally know why Samsung’s Galaxy Note 7s “exploded.” Accessed January 24, 2020, http://www.wired.co.uk/article/galaxy-note-7-issues-what-happened.Google Scholar
  • Jerath K, Netessine S, Veeraraghavan S (2010) Revenue management with strategic customers: Last minute selling and opaque selling. Management Sci. 56(3):430–448.LinkGoogle Scholar
  • Ketzenberg ME, Zuidwijk RA (2009) Optimal ordering, pricing, and return policies for consumer goods. Production Oper. Management 18(3):344–360.CrossrefGoogle Scholar
  • Koenig S (2014) Breaking the product return cycle. i3: It Is Innovation, 79–80.Google Scholar
  • Lee SY, Kim M (2016) Samsung plans refurbished smartphone program. Accessed August 22, 2020, http://reut.rs/2bIxtLD.Google Scholar
  • Li J, Granados N, Netessine S (2014) Are consumers strategic? Structural estimation from the air-travel industry. Management Sci. 60(9):2114–2137.LinkGoogle Scholar
  • MacRumors (2012) How long until refurbished new iPad available? Accessed March 8, 2020, http://forums.macrumors.com/showthread.php?t=1336126.Google Scholar
  • Majumder P, Groenevelt H (2001) Competition in remanufacturing. Production Oper. Management 10(2):125–141.CrossrefGoogle Scholar
  • McWilliams B (2012) Money-back guarantees: Helping the low-quality retailer. Management Sci. 58(8):1521–1524.LinkGoogle Scholar
  • Moorthy S, Srinivasan K (1995) Signaling quality with a money-back guarantee: The role of transaction costs. Marketing Sci. 14(4):442–466.LinkGoogle Scholar
  • Oraiopoulos N, Ferguson ME, Toktay LB (2012) Relicensing as a secondary market strategy. Management Sci. 58(5):1022–1037.LinkGoogle Scholar
  • Orland K (2013) Nintendo undercutting Gamestop on refurbished portable hardware Accessed April 28, 2020, https://arstechnica.com/?post_type=post&p=255531.Google Scholar
  • Orsdemir A, Kemahlioglu-Ziya E, Parlakturk A (2014) Competitive quality choice and remanufacturing. Production Oper. Management 23(1):48–64.CrossrefGoogle Scholar
  • Ovchinnikov A (2011) Revenue and cost management for remanufactured products. Production Oper. Management 20(6):824–840.CrossrefGoogle Scholar
  • Petersen JA, Kumar V (2009) Are product returns a necessary evil? Antecedents and consequences. J. Marketing 73(2):35–51.CrossrefGoogle Scholar
  • Pince C, Ferguson M, Toktay B (2016) Extracting maximum value from consumer returns: Allocating between remarketing and refurbishing for warranty claims. Manufacturing Service Oper. Management 18(4):475–492.LinkGoogle Scholar
  • Ramachandran K, Krishnan V (2008) Design architecture and introduction timing for rapidly improving industrial products. Manufacturing Service Oper. Management 10(1):149–171.LinkGoogle Scholar
  • Reddit (2016) What is your experience with refurbished products? Accessed March 19, 2020, https://www.reddit.com/r/Frugal/comments/4b4w7y/what_is_your_experience_with_refurbished_products/.Google Scholar
  • Savaskan RC, Bhattacharya S, Van Wassenhove LN (2004) Closed-loop supply chain models with product remanufacturing. Management Sci. 50(2):239–252.LinkGoogle Scholar
  • Schneider J, Hall J (2011) Why most product launches fail. Harvard Bus. Rev. 89(4):21–23.Google Scholar
  • Singh N, Ramachandran K, Subramanian R (2020) Intertemporal product management with strategic consumers: The value of defective product returns. Preprint, submitted October 19, 2020, https://dx.doi.org/10.2139/ssrn.2511424.Google Scholar
  • Smith NC, Thomas RJ, Quelch J (1996) A strategic approach to managing product recalls. Harvard Bus. Rev. 74(5):102–112.Google Scholar
  • Stock J, Speh T, Shear H (2006) Many happy (product) returns. Harvard Bus. Rev. 80(7):16–17.Google Scholar
  • Stokey NL (1981) Rational expectations and durable goods pricing. Bell J. Econom. 12(1):112–128.CrossrefGoogle Scholar
  • Su X (2007) Intertemporal pricing with strategic customer behavior. Management Sci. 53(5):726–741.LinkGoogle Scholar
  • Su X (2009) Consumer returns policies and supply chain performance. Manufacturing Service Oper. Management 11(4):595–612.LinkGoogle Scholar
  • Subramanian R, Subramanyam R (2012) Key factors in the market for remanufactured products. Manufacturing Service Oper. Management 14(2):315–326.LinkGoogle Scholar
  • Vorasayan J, Ryan SM (2006) Optimal price and quantity of refurbished products. Production Oper. Management 15(3):369–383.CrossrefGoogle Scholar
  • Waldman M (1993) A new perspective on planned obsolescence. Quart. J. Econom. 108(1):273–283.CrossrefGoogle Scholar
  • Waldman M (2003) Durable goods theory for real world markets. J. Econom. Perspect. 17(1):131–154.CrossrefGoogle Scholar
  • Zhang F, Zhang R (2018) Trade-in remanufacturing, customer purchasing behavior, and government policy. Manufacturing Service Oper. Management 20(4):601–616.LinkGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.