Document Type

Article

Publication Date

8-2023

Publisher

Elsevier

Abstract

During the sharing boom, product lines and add-ons are significant for manufacturers who have established sharing platforms to provide sharing and rental services. In this paper, we consider a manufacturer that provides two products of different quality in the rental channel (i.e., the B2C sharing platform) and the sales channel. We investigate the manufacturer’s product-line selling strategies: either the manufacturer sells low-quality products and rents high-quality products (i.e., the LH product line), or the manufacturer sells high-quality products and rents low-quality products (i.e., the HL product line). We also examine whether to offer the add-on for rental products. The results show that the manufacturer will always offer the add-on. When the add-on value and the degree of quality differentiation are low, the manufacturer will offer the add-on and choose the HL product line; otherwise, the manufacturer will offer the add-on and choose the LH product line. Furthermore, reducing the add-on cost will not always increase the manufacturer’s profit. However, as the add-on cost decreases, the manufacturer will be more likely to offer the add-on and choose the HL product line. Finally, we extend the main model in several ways and verify the robustness of the results.

Comments

© 2023. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Available for download on Friday, August 01, 2025

Share

COinS