• Journal of Korean Society of Industrial and Systems Engineering
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• v.43 no.3
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• pp.21-28
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• 2020

Aftermarket refers to a market in which a company sells complementary goods, replacements of parts, and upgrade or maintenance services to consumers after selling them main durable goods. Intuitively, consumers who purchase main durable goods become major potential customers in subsequent aftermarket. Thus the existence of the aftermarket has a significant impact on pricing of the main durable goods as well as the aftermarket products. In this study, we analyze the effect of aftermarket on the pricing strategy for a company selling both main durable goods and aftermarket products. To do this we first divided the market into markets where the aftermarket products are indispensable and optional. Based on the proposed market types, the profit maximizing solutions are derived using two-period model, and the impacts of consumers' undervaluation of aftermarket product prices on pricing strategy are analyzed. The results can be summarized as follows : (1) Regardless of the market type, the total profits were found to be inversely proportional to the consumer's awareness accuracy of product prices in the aftermarket. This is in line with marketing efforts that sales companies have made intuitively to make consumers underestimate the cost of the aftermarket. (2) If aftermarket product is indispensable, only revenue from the aftermarket is sought. On the other hand, if aftermarket product is optional, revenue from the main durable good as well as the aftermarket product will be sought simultaneously. (3) Moreover, when aftermarket product is optional, the lower the awareness accuracy of consumers, the higher the price and profit of the main durable goods, while the lower the price and profit of the aftermarket products. This is contrary to the intuition that the lower the consumer's valuation of the costs of aftermarket, the more advantageous it would be to rely on aftermarket products rather than on main durable goods.

• Journal of Korean Institute of Industrial Engineers
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• v.26 no.1
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• pp.66-72
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• 2000

Inventory management of a product not to be produced any more has a great impact on the financial status of a company. Clearance pricing can make bigger sales volume together with great savings of inventory holding cost specially for a durable goods with relatively large inventory carrying cost and accordingly cash inflow can be improved. This paper deals with the inventory management by non-linear clearance pricing with the sales rate which depends on the accumulated sales volume and selling price.

• Journal of the Korean Operations Research and Management Science Society
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• v.10 no.1
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• pp.65-78
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• 1985

In this paper, the approach getting a total demand by forecasting the new demand and the replacement demand separately and adding them is used for long term forecasting of durable goods. Cross country analysis using the income as an independent variable and S-shaped growth curve as a fitting model is developed as a method of forecasting new demand. To get the replacement demand the methods using the number of ownership and the replacement rate and the methods using the past demand and the distribution of the product life are proposed. And the theoretical explannation for product life cycle's diversity, which is the one of the major considerations in the long term forecasting, is attempted by the combination of the new demand and the replacement demand patterns. This is applicated the long term forecasting of Korean passenger cars.

• Journal of the Korean Operations Research and Management Science Society
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• v.16 no.1
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• pp.45-58
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• 1991

The importance of marketing mix variables, replacement demand, and competition in a new product growth model has been cited by many researchers. In this paper, these factors are integrated with an aim to model company sales of competing durables. Based on the most popular new product growth model, numerous extensions and incorporations of contributions from related research fields are tried. Model parameters are estimated by the Kalman filter. And, the proposed model is applied to the sales of four consumer durable goods. Empirical applications show the benefits, as well as the limitations of the proposed model.

• Archives of design research
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• v.12 no.2
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• pp.97-106
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• 1999

The whole crisis of human being derived from environmental pollution has changed the human -centered paradigm into the ecological paradigm based on the harmony of human and nature, which have made it inevitable for designers to participate in the environmental problem-solving. In the line of this sense, it is necessary for designers to recognize the social and ethical responsibility for environmental pollution and to change into the designing for environment, not for sale itself. In accord with the context above, the purpose of this study is to suggest some clues for resolving environmental problems with the analysis of design for long-selling product, as we call, product durability analysis. That is, this study is under some assumptions that designing durable product and durable product itself are able to extend a product life cycle, delay a product disusing, reduce a rash development competition for new product among companies, mitigate consumption-oriented attitude of consumers, eliminate a waste of resources, and go far toward the environmental problem solving.

• Korean Journal of Rural Living Science
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• v.2
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• pp.51-62
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• 1991

• Asian Journal of Innovation and Policy
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• v.7 no.1
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• pp.207-234
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• 2018

A manufacturer of a durable good typically purchases supplies, including parts for assembly - that are also useful for repairs - from independent "original equipment suppliers" with which it contracts. The manufacturer is a branded monopolist of its final assembled product. To put into effect also a monopoly of the replacement parts, it must stipulate in its arrangements with independent suppliers of the parts that they not supply such patented parts to any other buyer. Durable good owners would then only be able to obtain their requirements of replacement parts from the same company that supplied the durable. This would amount to a tie-in of replacement parts to the direct purchase of new durables. And that describes the apparently widespread practice of automobile manufacturers in India, as exposed in a recent case before the Competition Commission of India (Samsher Kataria v Honda Siel Cars India Limited and others). Here, I will argue that such tie-in enabled automotive manufacturers to more fully appropriate consumer surplus, which induced them to lower the price of new cars, sell more cars and also sell more repair parts. The tie-in expanded the auto parts industry and promoted new entry. The main restraint on expansion of India's automotive manufacturing is not monopoly. It is government protection in the form of tariffs on automobiles and auto parts.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2006.11a
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• pp.161-164
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• 2006

The sales of consumer durables are composed of first time purchases and replacement purchases. Since the sales for most mature durable products are dominated by replacement sales, it is necessary to develop a model incorporating replacement component of sales in order to forecast total sales accurately. Several single product diffusion models incorporating replacement demand have been developed, but research addressing the multi-product diffusion models has not considered replacement sales. In this paper, we propose a model based on consumer choice behavior that simultaneously captures the diffusion and the replacement process for multi-product relationships. The proposed model enables the division of replacement sales into repurchase by previous users and transition purchase by users of different products. As a result, the model allows the partitioning of the total sales according to the customer groups (first-time buyers, repurchase buyers, and transition buyers), which allows companies to develop their production and marketing plans based on their customer mix. We apply the proposed model to the Korean automobile market, and compare the fitting and forecasting performance with other Bass-type multi-product models.

• Asia Marketing Journal
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• v.21 no.2
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• pp.73-98
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• 2019

As information and communication technology continue its remarkable development, the exchange of information online becomes as prevalent and frequent as face-to-face communication in daily life. Therefore, the management and application of WOM (word of mouth) practices will become more important than ever to companies. Currently, there are various types of communication channels for online WOM, and each channel has its own unique traits. Most of the previous research studies online WOM by examining the information inside a single communication channel, but this research chooses two different communication channels and analyzes the effects of online WOM with each channel's unique characteristics. More specifically, this research focuses on the expectation that the effects of information from Twitter and blogs on product sales may differ because Twitter and blogs, two different communication channels for online WOM, have their own unique traits. Our particular aim is to perform an in-depth examination on the effects of communication channel's volume and valence on product sales, two important attributes of online WOM. Furthermore, while most of the empirical research focuses on online WOM and analyzes its effect on markets of temporary experience goods, such as movies and books, this research highlights focuses on the automobile market, a durable goods market. The results of our analysis are as follows: First, regarding blogs, a positive valence significantly and positively affects the sales of products, and this result indicates that consumers are influenced more by the emotional aspect of a product presented in a post than by the number of blog posts. Second, regarding Twitter, the volume of online WOM significantly and positively affects sales, an indication that as the number of posts increase, the sales increase. Through this research, we suggest that even those firms that sell durable goods can increase sales through the management and application of online WOM. Moreover, according to the characteristics of communication channels, the effects of online WOM on sales differ. As a practical implication of this research, we suggest that companies can and should create marketing strategies appropriate to their targeted communication channels.

• The Journal of Industrial Distribution & Business
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• v.5 no.3
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• pp.5-14
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• 2014

Purpose - This study illustrates research product industrial engineering, which needs to be promoted to encourage knowledge intensive businesses. Research traditions related to industrial business products and a fuzzy multi criteria decision approach in technology management for product design industries have undergone continuous changes over time. However, there is no clarity on the present situation, and there is a need to reform business enterprises. Research design, data, and methodology - Using fuzzy theory and appraising multi-goal plans, the manner of promoting the competitive advantage of industrial businesses is analyzed using a case study. In the case study, various aspects are examined, such as product design and manufacture, fuzzy set decisions with multi attribute policy making, flaws in the present system, and a review of the related literature. Results - New fuzzy and multi criteria designs can improve the existing keyboard by solving product problems, resulting in a clear and durable typeface for a creative LED keyboard. Conclusion - Using a fuzzy set with multi attribute policy-making influences the achievements appraisal system and can help achieve the anticipated strategy goal of product design.