Servicizing as an alternative to selling for a durable goods manufacturer

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2019

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Kanatlı, Mehmet Ali

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Servicizing is the activity of selling the services provided by the product rather than the product itself. It has been considered as an alternative business model that might be environmentally superior to the conventional selling business model. Servicizing promises pooling of consumer use and products with higher durability. However, it can also inﬂate demand/consumption and result in a bigger environmental impact overall. This thesis compares selling and servicizing business models for a monopolist durable-goods manufacturer. Durability and price decisions of the ﬁrm, and usage level decisions of consumers are modeled as endogenous. Under this setting, we compare the proﬁtability and environmental performance of the two business models. We ﬁnd that servicizing business model leads to more durable product design. We identify the conditions which enable servicizing to be superior regarding proﬁtability and environmental impact.

Subject Keywords

Service industries., Keywords: Servicizing, Environmental impact, Proﬁtability, Durability.

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http://etd.lib.metu.edu.tr/upload/12624168/index.pdf
https://hdl.handle.net/11511/44246

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Graduate School of Natural and Applied Sciences, Thesis

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Citation Formats

M. A. Kanatlı, “Servicizing as an alternative to selling for a durable goods manufacturer,” Thesis (M.S.) -- Graduate School of Natural and Applied Sciences. Industrial Engineering., Middle East Technical University, 2019.