The optimal buyback promotion strategy considering consumers' multichannel psychological acquisition

Abstract

Purpose This paper aims to develop an optimal buyback promotion strategy for enterprises, including multibuyback strategy and self-buyback strategy, taking both the consumer's multichannel psychological acquisition attributes and remaining market into account. Design/methodology/approach Based on the game theory and Hotelling model, the authors formulate a new model to study the equilibrium of different buyback models, given the utility maximization of the consumers, the profit maximization and the constraint on nondecreasing market share of the enterprises, and the authors conduct comparative analysis. Findings Intuitively, enterprises buying back products of other brands would appeal to some consumers. However, the authors find that after implementing the multibuyback scheme, enterprises may not be able to seize competitors' markets or even lose their original customer base in the context considered in this article counterintuitive. In addition, the size of remaining market share and the consumer's multichannel psychological acquisition affect the choice of buyback promotion strategies. Moreover, after implementing multibuyback scheme, customers with old products subsidize those who receive additional discounts. Finally, the authors point out that the buyback strategy choices of companies with different goal-oriented are diverse. Practical implications This study has a very solid realistic background and provides guidance for enterprises to implement buyback promotion strategies. In addition, the authors unearth new influencing factors to provide a reasonable explanation for different buyback strategies in reality. Originality/value To the best of the authors’ knowledge, this study is one of the first to explore the multibuyback promotion strategy as a new buyback method, where the two influencing factors the authors have not been proposed so far.