EconPapers    
Economics at your fingertips  
 

Pricing decision model for new and remanufactured short life-cycle products with green consumers

Shu-San Gan, I Nyoman Pujawan (), Didik Wahjudi and Yopi Yusuf Tanoto
Additional contact information
Shu-San Gan: Petra Christian University
I Nyoman Pujawan: Sepuluh Nopember Institute of Technology
Didik Wahjudi: Petra Christian University
Yopi Yusuf Tanoto: Petra Christian University

Journal of Revenue and Pricing Management, 2019, vol. 18, issue 5, 376-392

Abstract: Abstract Remanufacturing has been studied quite extensively during the last decades, as one of product recovery options that could extend product’s useful life and mitigate the environmental impact. Rapid innovation in technology accelerates obsolescence and hence product life cycles are getting shorter and wastes build up faster. Remanufacturing of short life-cycle product is an important alternative to mitigate the waste. However, since there are impacts in implementing remanufacturing, such as cannibalization, segmentation, and lower willingness to pay, pricing has become a significant aspect to ensure successful remanufacturing business. Several studies show that there exists green segment consumer, who has higher preference to purchase environmental-friendly products and higher willingness to pay for such products. In this paper, we study manufacturer’s and retailer’s pricing decision of short life-cycle product considering the green segment consumers, and propose two scenarios i.e. independently optimized profit scenario under Stackelberg game with manufacturer as the leader, and integrated scenario. The results show that the integrated scenario achieves higher profit compared to the independent one, and both players are better off under the integrated decision. We also find that the existence of green segment increases the profit of manufacturer and retailer to a certain level, before it erodes manufacturer’s profit when the green level is too high. In addition, price sensitivity of new and remanufactured products, demand’s speed of change, and remanufacturing cost influence the optimum prices as well as the optimum green level. For firms that are engaging in remanufacturing, managerial insights are also provided to assist managers in making pricing decisions when there exist green consumers.

Keywords: Pricing; Remanufacturing; Short life-cycle product; Green consumers (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1057/s41272-019-00201-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:pal:jorapm:v:18:y:2019:i:5:d:10.1057_s41272-019-00201-w

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41272

Access Statistics for this article

Journal of Revenue and Pricing Management is currently edited by Ian Yeoman

More articles in Journal of Revenue and Pricing Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-01-08
Handle: RePEc:pal:jorapm:v:18:y:2019:i:5:d:10.1057_s41272-019-00201-w