Study On Selling And Leasing Strategies For Durable Goods In Direct Channel And Distribution Channel

As one of the most evident manifestations of the sustained and healthy development of China’s national economy, people’s living standards have been enhanced, which leads to the prosperity of durable goods market. Changes about durable goods consumption have witnessed major improvements of China’s economic.TV and refrigerators, which are representatives of "The old four items" and "The new four items" in the initial stage of reform and opening, have spread to every household. Now, people are focusing on upscale durables such as real estate and luxury cars. From the latest Goldman’s research, with the increasing purchasing power of the middle class, the consumption of commodities has peaked, then the world’s consumption will go into the durable goods and services era. Specially, there is an optimistic prospect about the consumption of luxury cars, household appliances and other durable goods.Durable goods manufacturers ushered in an unprecedented development opportunity, because of improving living standards and the boom market of durables. Meanwhile, after China joined the WTO, numbers of international corporations are accessing to China market in succession. How domestic enterprises meet the challenge is a significant and worth-researching problem, especially in the aspects of making reasonable and effective production plans and of developing competitive strategy to survive and improve in response to cut-throat competition at home and abroad. In order to win more market share and profits in the future fierce competition in the market, durable goods manufacturers must improve product quality, upgrade production technology, and diver sales strategy to meet consumer demands.On the basis of qualitative and quantitative analysis, this paper studies the selling and leasing strategy under direct channel and distribution channel. The main contents are as follows:first, we explore the background and significance, and summarize the existing literature on durable goods consumption. Then, the durable goods consumption in the condition of direct sales channel in two service periods is analyzed based on Stackelberg game. This part mainly studies two questions:(1) selling strategy of durable goods monopolist under direct channel;(2) the combination of selling and leasing strategy of durable goods monopolist under direct sales channel. Finally, the durable goods consumption in the condition of distribution channel in two service periods is analyzed based on Stackelberg game. This part mainly considers the following questions:(1) selling strategy of durable goods under distribution channel;(2) the combination of selling and leasing strategy of durable goods under distribution channel.The broad conclusions can be drawn in this study are as follows:First, the market share and channel profits of durable goods will be reduced, when the marginal cost of the product increases. The characteristics of long life cycle and high prices of durable goods impose constraints on consumer purchasing power.Secondly, after the comparison between two strategies:pure selling strategy, and the combination of selling and leasing strategy, we come to a conclusion that channel profits of the latter strategy are not always greater than that of selling strategy.Finally, by the numerical examples, we find that the total profits in the distribution channel, with a lower marginal cost, are always larger than that in the direct channel. However, the market share of durable goods in distribution channel is always lower than that in the direct channel.