Abstract

This study explores the influences of characteristics of components and depth of trade-in on consumers' product replacement decisions when component producers of modular products adopt trade-in promotion. The degree of global performance individual component governing and the degree of innovation of the new advanced product would determine consumers' perceived benefits. And in turn, along with perceived price, decided by depth of trade-ins, would result in impact on perceived value. In addition, the degree of global performance individual component governing and perceived benefits may have positive relationships with switching costs. Consumer's replacement decision then can be guided by perceived value and switching costs. Through a between-subject factorial design, we manipulates characteristics of components and depth of trade-in, and incorporates in perceived benefits, perceived price, perceived value, and switching costs as endogenous variables, to explore the ways consumers undergo to make replacement decisions. Except for the influences of the degree of global performance individual component governing on switching cost, and in turn on consumer replacement decisions, all other hypotheses are supported.