Determinants of extended warranty prices for consumer durables
© Emerald Group Publishing Limited. Purpose – Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. Although this stream of research has focused on initial product warranties offered by the manufacturer, studies of extended warranties, wh...
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th-mahidol.432852019-03-14T15:04:21Z Determinants of extended warranty prices for consumer durables Hooman Estelami Peter De Maeyer Nicholas Estelami Fordham University Mahidol University Business, Management and Accounting © Emerald Group Publishing Limited. Purpose – Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. Although this stream of research has focused on initial product warranties offered by the manufacturer, studies of extended warranties, which protect consumers against product breakdowns beyond the warranty constraints of the manufacturer, are relatively scarce. This paper aims to empirically establish the effects of variables which influence the pricing of extended warranties for consumer durables. Design/methodology/approach – Using data on over 8,000 product offers in six durable goods categories, drivers of the annual premiums for extended warranties are empirically identified. Bivariate and multi-level hierarchical linear regression methods are used to establish the effects of factors which may drive the prices of extended warranties. Findings – The results reveal that the standardized annual premiums for extended warranties systematically vary across product categories and brands and are further affected by the retailer’s decision to use odd price endings for the sold product and the extended warranty. The influences of warranty length and price level of the protected product on extended warranty premiums are also empirically established. Research limitations/implications – The findings indicate systematic variations in extended warranty prices as a result of the factors studied. Future research can extend this line of inquiry by utilizing alternative means of data gathering. Practical implications – Given that marketers often cross-sell many consumer durable goods with extended warranty policies, and considering the growth in consumer spending in this category, as well as the high retail margins associated with extended warranties, this paper contributes to the understanding of the mechanism by which extended warranty prices are determined in the marketplace. Originality/value – This is the first study to examine the determinants of extended warranty prices, as past studies have been normative and non-empirical in nature. 2018-12-11T02:28:22Z 2019-03-14T08:04:21Z 2018-12-11T02:28:22Z 2019-03-14T08:04:21Z 2016-01-01 Article Journal of Product and Brand Management. Vol.25, No.7 (2016), 687-699 10.1108/JPBM-09-2015-0971 10610421 2-s2.0-85038429876 https://repository.li.mahidol.ac.th/handle/123456789/43285 Mahidol University SCOPUS https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85038429876&origin=inward |
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Business, Management and Accounting Hooman Estelami Peter De Maeyer Nicholas Estelami Determinants of extended warranty prices for consumer durables |
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© Emerald Group Publishing Limited. Purpose – Research in marketing has extensively examined the signaling effects of product warranties on consumer perceptions. Although this stream of research has focused on initial product warranties offered by the manufacturer, studies of extended warranties, which protect consumers against product breakdowns beyond the warranty constraints of the manufacturer, are relatively scarce. This paper aims to empirically establish the effects of variables which influence the pricing of extended warranties for consumer durables. Design/methodology/approach – Using data on over 8,000 product offers in six durable goods categories, drivers of the annual premiums for extended warranties are empirically identified. Bivariate and multi-level hierarchical linear regression methods are used to establish the effects of factors which may drive the prices of extended warranties. Findings – The results reveal that the standardized annual premiums for extended warranties systematically vary across product categories and brands and are further affected by the retailer’s decision to use odd price endings for the sold product and the extended warranty. The influences of warranty length and price level of the protected product on extended warranty premiums are also empirically established. Research limitations/implications – The findings indicate systematic variations in extended warranty prices as a result of the factors studied. Future research can extend this line of inquiry by utilizing alternative means of data gathering. Practical implications – Given that marketers often cross-sell many consumer durable goods with extended warranty policies, and considering the growth in consumer spending in this category, as well as the high retail margins associated with extended warranties, this paper contributes to the understanding of the mechanism by which extended warranty prices are determined in the marketplace. Originality/value – This is the first study to examine the determinants of extended warranty prices, as past studies have been normative and non-empirical in nature. |
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Fordham University |
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Fordham University Hooman Estelami Peter De Maeyer Nicholas Estelami |
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Article |
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Hooman Estelami Peter De Maeyer Nicholas Estelami |
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Hooman Estelami |
title |
Determinants of extended warranty prices for consumer durables |
title_short |
Determinants of extended warranty prices for consumer durables |
title_full |
Determinants of extended warranty prices for consumer durables |
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Determinants of extended warranty prices for consumer durables |
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Determinants of extended warranty prices for consumer durables |
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determinants of extended warranty prices for consumer durables |
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2018 |
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https://repository.li.mahidol.ac.th/handle/123456789/43285 |
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