Title: Pricing new and remanufactured products: a strategic analysis of the selling and leasing models

Authors: Tao Zhou; Kai Li; Bohai Liu; Zhiying Kuang

Addresses: School of Management, Hefei University of Technology, Hefei, Anhui, China ' School of Management, Hefei University of Technology, Hefei, Anhui, China; Key Laboratory of Process Optimization and Intelligent Decision-making, Ministry of Education, Hefei, Anhui, China ' School of Management, Hefei University of Technology, Hefei, Anhui, China ' School of Management, Hefei University of Technology, Hefei, Anhui, China

Abstract: Growing environmental concerns have prompted firms to adopt sustainable practices, with remanufacturing emerging as a promising approach. However, implementing remanufacturing into business models presents challenges for firms. Our study examines the selling and leasing business models, analysing how ownership is transferred upon purchase or retained by the firm, and how returned product quality and customer perception impact remanufacturing, marketing, and the environment. We also identify conditions that favour each business model. Our findings indicate that the firm's remanufacturing preference is contingent upon the quality of returned products, with full remanufacturing being favoured for higher quality products and partial remanufacturing being employed for lower quality ones. Notably, a high level of returned product quality may not always be beneficial for the firm's remanufacturing profitability. The total environmental impact tends to decrease as the quality of returned products improves under certain conditions. Furthermore, a rise in the customer perception factor may lead to diminished profits and decreased environmental impact. Finally, our research indicates that the decision between adopting a leasing or selling model hinges on the quality of returned products, regardless of whether they were obtained through leasing or selling.

Keywords: business model; remanufacturing; pricing; product quality; customer perception; environmental impact.

DOI: 10.1504/IJSOM.2026.153859

International Journal of Services and Operations Management, 2026 Vol.54 No.1, pp.1 - 37

Received: 14 Jan 2024
Accepted: 25 Jan 2024
Published online: 29 May 2026 *

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