Should short warranty always be interpreted as low quality: the effect of brand advantages on warranty’s signalization
研究两个不同品牌声誉的制造商通过共同零售商销售产品时，品牌优势如何影响保修期决策，发现强势品牌可能通过提供更短保修期实现利润最大化。
Brand and warranty information have been always been accepted as signals of unknown product quality. Given this, offering an attractive warranty is suggested as an effective competitive strategy. However, manufacturers with strong brand tend to provide the minimal industry standard warranty period in reality. This paper considers two competing manufacturers with different brand reputations selling their products through common retailer. The demand of products depends on price, brand and warranty period. A model for this problem is proposed when the manufacturers decide the warranty periods and the wholesale prices meanwhile the retailer decides the retail prices. We find that brand reputations influence all the optimal decisions of each party. We show that under certain condition, the strong brand manufacturer realises his profit maximisation by providing a shorter warranty compared to the weaker brand manufacturer. To a certain extent, this brand advantage modifies signalisation of manufacturers’ warranty. Several numerical examples and managerial insights are presented and used to illustrate the model presented in this paper.