Product after-sales service bundling and marketing strategy evolution

WANG Xianjia, LÜ Shaojie, QUAN Ji

Systems Engineering - Theory & Practice ›› 2018, Vol. 38 ›› Issue (7) : 1740-1749.

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Systems Engineering - Theory & Practice ›› 2018, Vol. 38 ›› Issue (7) : 1740-1749. DOI: 10.12011/1000-6788(2018)07-1740-10

Product after-sales service bundling and marketing strategy evolution

  • WANG Xianjia1,2, LÜ Shaojie1, QUAN Ji3
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Abstract

Product after-sales service has become an unneglectable impact on consumer behavior, companies usually provide consumers with better after-sales service by bundling or separate selling. The Hotelling model and replicator dynamics evolutionary game model which consider the heterogeneity of consumers and competition-oriented enterprises are built to analyze short-term equilibrium pricing and long-term evolutionarily stable marketing strategy. Our research finds that the higher cost of after-sales service would encourage one party to adopt the bundling strategy and benefit both, and the bundling strategy would coexist with the separate selling strategy. The higher proportion of the non-base consumers, the more beneficial to separate selling strategy which will be the evolutionarily stable strategy ultimately. Compared to the competitive-oriented enterprises, the profit-oriented enterprises are more inclined to choose bundling strategy. The analysis of simulation shows that the irrational enterprises choosing following strategy will be eliminated when the after-sales service cost is high, and this type of enterprise will exist in the market when the after-sales service cost is low.

Key words

after-sales service / heterogeneous consumer / bundling / competitor orientation / evolutionary game theory

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WANG Xianjia, LÜ Shaojie, QUAN Ji. Product after-sales service bundling and marketing strategy evolution. Systems Engineering - Theory & Practice, 2018, 38(7): 1740-1749 https://doi.org/10.12011/1000-6788(2018)07-1740-10

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Funding

National Natural Science Foundation of China (71231007, 71501149)
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