Decision analysis of promotion strategies for new green products: the role of secondary platforms and spillover effects

Abstract

Driven by the concept of low-carbon development, many firms use intelligent technology to promote newly launched green products. Meanwhile, more and more independent remanufacturers (IRs) sell remanufactured products through secondary e-commerce platforms, competing with new products. The promotion of new products will inevitably spill over to remanufactured products, potentially exacerbating the challenge of product cannibalization. However, the existing literature lacks comprehensive insights into firms’ green promotion strategies in the presence of secondary platforms and spillover effect. We employ game-theoretic models to integrate promotion strategies for new green product with remanufacturing dynamics, examining their impact on the supply chain and its constituent members. We distinguish between two promotion modes: individual implementation as characterized by non-cooperative strategies employed either by the manufacturer or the retailer, and cooperative strategies based on cost-sharing contracts between the manufacturer and the retailer. Our main findings suggest that the higher promotion effort does not universally translate into increased sales. Only when the manufacturer’s promotion capability is relatively limited can the manufacturer and the retailer achieve a win–win situation through cooperation under the scenario where full remanufacturing does not occur. Additionally, despite the potential hindrance of the promotion strategy on IRs’ engagement in full remanufacturing activities, consistent promotion proves beneficial in augmenting IRs’ profitability. We then contrast our model with the case of Apple Inc, illustrating how promotion spillover causes cannibalization in a firm that combines manufacturing, retailing and remanufacturing functions.