Research On Pricing Strategy Of Manufacturing/Remanufacturing System In Different Market Structure

With the issue of relate laws, statutes, supporting policies and the growing of consumers' environmental awareness, remanufacturing industry contains a huge business opportunity. It is foreseeable that there will be more and more manufacturing companies involved in waste products remanufacturing activities. Since the prices of remanufactured products directly affect the sales of new products and remanufactured products in the market, companies must control and coordinate their prices to achieve the rational allocation of new products and remanufactured products in market segments, to gain maximum profits.Based on the consideration of market structures, this paper focused on two situations:(1) under monopoly conditions, the pricing decision situation of manufacturers who produce new and remanufactured products at the same time; (2) under external competition conditions, the pricing decision situation of manufacturers and remanufactures and the possible responding strategies taken by manufactures. Based on the above two situations, the paper built a two-stage pricing decisions model of manufacturing/remanufacturing system respectively, and further analyzed how the consumer preferences and recovery rate affected the product pricing and manufacturer revenue.Research indicates that:under monopoly conditions, through coordinating new and remanufactured products and making out reasonable prices, the manufacturer can obtain more revenue comparing to by only producing new products. Under external competition conditions, manufacturers and remanufactures move the balance through gaming. Manufacturers can take some responding strategies to prevent the entry of competitors. In addition, the results retrieved from two other market structures show that both consumer preference rate and recovery rate have notable influence on remanufactured products prices and the system revenue.