EXPERIMENTAL ANALYSIS ON INTERRELATING QUALITY AND WARRANTY TOWARDS NEW PRODUCT PROMOTION

Abstract

Everything is changing very fast and unpredictably. This radical changes taking place due to globalization in reshaping the industrial landscape of world economies. Customers are requiring smaller quantities of more customized products such way that they are to be treated individually. So most companies have much wider product ranges and are introducing more new products more quickly. So due to this change, industries has to focus on marketing the product through post sale factors like advertisement, service, warranty and etc., In which warranty become information rich in the context of new products promotion since it can be used also as advertising tool. As better warranty signals leads to higher product quality and provides greater assurance to customers. Product warranty has received the attention of researchers from many different disciplines and there are many different aspects to warranty, a proper study of the subject requires a framework to integrate these in an effective manner. This paper highlights issues related to quality, warranties and examines consumer’s perception on warranty with the objective of optimal utilization of warranty. An experimental analysis was done to which level quality is imposed to product, prior knowledge and the corresponding extra revenue generated to that of warranty. In which the result somewhat surprisingly suggest that, for experts, a better warranty leads to perceptions of higher quality, regardless of firm reputation. Tenderfoot on the other hand, tend to perceive a better warranty as a signal of higher quality only when the firm is reputable but not when its reputation is low