Joint Advertisement and Trade-In Marketing Strategy in Closed-Loop Supply Chain

Abstract

With environmental problems becoming severe, many firms, including HP, Huawei, and Apple are simultaneously implementing trade-in programs and advertising to stimulate market demand. Offering trade-in service by the manufacturer is a method of price discrimination by providing replacement consumers with a rebate when they purchase new products. With the recycled, used products, the manufacturer can benefit through a strict series—via a remanufacturing process. Although numerous literatures have investigated the pricing strategy and advertising decisions in the closed-loop supply chain (CLSC), to the best of our knowledge, there is little research that analyzes and compares the economic and social performance of these two marketing strategies. To fill this gap, we establish two supply chain models with two periods, namely, an advertisement model and a joint model, while the equilibrium purchasing behavior of the replacement consumers can be characterized under three conditions: (1) all of the replacement consumers purchasing new products (ATA); (2) partial replacement consumers purchasing (PTA); (3) no replacement consumers purchasing (NTA). These three conditions are decided by the numerous relationships of the parameters. Solving the optimal decisions of the manufacturer in both models, the critical value in the joint model is higher in the advertisement model, which indicates that developing the trade-in program can enhance the robustness of the business model. Furthermore, through numerical example, we find that the market demand in the joint model is higher than in the advertisement model, and the cost of marketing strategy in the joint model is lower in the advertisement model, which means that the efficiency of the marketing strategy is higher than the single marketing strategy. As a result, comparing the economic and social performance between the two models, we conclude that the advertisement elasticity of the market demand is the key factor of the manufacturer’s profits and total social welfare.

Evaluation of Waste Electronic Product Trade-in Strategies in Predictive Twin Disassembly Systems in the Era of Blockchain

“…The literature on trade-in policies is expansive in both economics and closed-loop supply chain management [6,63]. Researchers addressed many issues involved in product take-back acquisition decisions: the existence of a secondary market in monopolistic firms [7]; competition between OEMs and remanufacturers in monopoly markets [6,64,65] or duopoly ecosystems [66][67][68][69]; the comparison between trade-ins and different marketing strategies [7,70,71]; the trade-off between online or offline platforms [72,73]; the analysis of buyback and discounts programs [62]; and the optimal rebate decision in business-to-consumer foundation [74][75][76]. Some researchers approached the problem from a quality-dependence perspective [5,77], while the others neglected the condition of the returned products [78].…”

Modeling a Logistics Hub Using the Digital Footprint Method—The Implication for Open Innovation Engineering

“…The specific strategy chosen for handling cargo and, accordingly, scientifically grounded control algorithms serves as an ideological platform for modeling; respectively, the business model is the same platform for designing and planning business processes [26,27]. The main requirement for building business processes is formulated strictly and concisely: to create value for consumers and exclude any unnecessary or obviously needless activitiesit applies to each individual business process and to all of their organizational set of processes that form a particular business [28][29][30][31][32].…”

Stronger Together? Tourists’ Behavioral Responses to Joint Brand Advertising

“…Compared to single brand advertising, featuring of an additional travel intermediary brand should attract product interest. This could be due to increased synergy or the combined effect of joint branding (Chen et al 2020). It is proposed here that the appearance of a travel intermediary brand in the same advertisement helps to increase the tourist's interest in the destination.…”