TY - JOUR
T1 - Production outsourcing for limited-edition luxury goods with consideration of consumers’ origin preferences
AU - Niu, Baozhuang
AU - Chen, Lei
AU - Xie, Fengfeng
N1 - Funding Information:
The authors are grateful to the editor and reviewers for their helpful comments. This work was supported by NSFC Excellent Young Scientists Fund, China (No. 71822202), NSFC, China (No. 71571194), Chang Jiang Scholars Program, China (Niu Baozhuang 2017), the Fundamental Research Funds for the Central Universities. The corresponding author is Xie Fengfeng.
Funding Information:
The authors are grateful to the editor and reviewers for their helpful comments. This work was supported by NSFC Excellent Young Scientists Fund , China (No. 71822202 ), NSFC , China (No. 71571194 ), Chang Jiang Scholars Program , China (Niu Baozhuang 2017), the Fundamental Research Funds for the Central Universities . The corresponding author is Xie Fengfeng.
Publisher Copyright:
© 2020 Elsevier Ltd
PY - 2020/8
Y1 - 2020/8
N2 - Origin decisions related to the manufacture of limited-edition luxury goods can be critical for luxury brands, because consumers often have strong origin preferences. We hence study two competing luxury brands’ production outsourcing decisions by incorporating tradeoffs among competition intensity, origin preferences, and quantity limits. Interestingly, we find that when luxury brands have the option, they tend to outsource production to an overseas contract manufacturer even when origin preferences for overseas goods are not strong and the downstream competition is mild. Correspondingly, if a brand's rival has no outsourcing options, its profit might be hurt when origin preferences for overseas goods and competition intensity are both moderate.
AB - Origin decisions related to the manufacture of limited-edition luxury goods can be critical for luxury brands, because consumers often have strong origin preferences. We hence study two competing luxury brands’ production outsourcing decisions by incorporating tradeoffs among competition intensity, origin preferences, and quantity limits. Interestingly, we find that when luxury brands have the option, they tend to outsource production to an overseas contract manufacturer even when origin preferences for overseas goods are not strong and the downstream competition is mild. Correspondingly, if a brand's rival has no outsourcing options, its profit might be hurt when origin preferences for overseas goods and competition intensity are both moderate.
KW - Limited-edition luxury goods
KW - Markup pricing
KW - Origin preference
KW - Production outsourcing
UR - http://www.scopus.com/inward/record.url?scp=85086160978&partnerID=8YFLogxK
U2 - 10.1016/j.tre.2020.101975
DO - 10.1016/j.tre.2020.101975
M3 - Article
SN - 1366-5545
VL - 140
JO - Transportation Research, Part E: Logistics and Transportation Review
JF - Transportation Research, Part E: Logistics and Transportation Review
M1 - 101975
ER -