Manufacturer’s Sharing Servitization Transformation and Product Pricing Strategy

Zhenfeng Liu, Ya Xiao and Jian Feng
Additional contact information
Zhenfeng Liu: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Ya Xiao: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Jian Feng: China Institute of FTZ Supply Chain, Shanghai Maritime University, Shanghai 201306, China

Sustainability, 2021, vol. 13, issue 3, 1-20

Abstract: The sharing market includes the idle product sharing by the owner and the firm’s new product sharing. Companies participating in the sharing economy choose to withdraw from the market because it is always difficult to make a profit, due to heavy asset investment, but there is no such worry for owners who do not need cost input. At the same time, we have observed that the sharing products launched by companies are difficult to meet the rental needs of consumers. Based on the above findings, we have constructed a model where there is a market where a monopolistic manufacturer sells and rents out at the same time, and owners who purchased new products can choose to rent out products when they are idle. Because of the uncoordinated supply and demand matching of the sharing market and the excessively high unit cost input, our research found that: (1) the barriers for the manufacturer to enter the sharing market are always high—for example, the manufacturer will choose to enter the sharing market only when consumers have a high rate of availability of sharing products. Only when the cost of products in the sharing market is not low will the manufacturer choose to provide sharing services; (2) the competition between the two products in the sharing market weakens the demand cannibalize in the sales market; (3) the manufacturer enters the sharing market to promote the owner’s income. The owner’s earnings will increase with the rising of sharing products’ availability.

Keywords: sharing economy; product launching; pricing strategy; sharing service transformation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/3/1503/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/3/1503/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:3:p:1503-:d:490850

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().