Warranty strategy: a solution to hybrid product woes?

Using an experimental design setting, this study investigates how global fi rms can make use of warranty strategies to influence consumers' evaluations of hybrid products that are designed in one country and manufactured in an other. The results confirm that consumers tend to perceive lower quality an d higher purchase risk when evaluating products manufactured in a country p erceived to be of lesser capability than its country of design (i.e., negat ive hybrid effects). However global firms with products that carry such neg ative hybrid effects call develop appropriate warranty strategy to overcome such biases. For instance the results show that consumers improve their as sessment of the quality and purchase risk of the negative hybrid products w hen these products carry warranty with wider coverage and longer duration t han the standard package, and when the firm providing the warranty has good warrantor reputation. Implications of these findings for international mar keting and research are also discussed.