Recently, Mercedes-Benz quietly reduced its warranty coverage by eliminating some free scheduled maintenance because the expense for the firm was too high. At the same time, Hyundai and others have expanded their warranties to build consumer confidence in their cars. They realize that extending the period of warranty coverage demonstrates they are making better cars in a very tangible way. These are examples of firms considering the ________ of product warranty.

Question

Quizplus · Accepted Answer

Mercedes-Benz and Hyundai's actions show that they are considering the costs versus benefits of their product warranties. Mercedes-Benz eliminated some free scheduled maintenance because the expense was too high, while Hyundai expanded their warranties to build consumer confidence in their cars. This decision-making process involves weighing the costs of offering a warranty against the benefits of increased consumer confidence and brand loyalty.

Recently, Mercedes-Benz Quietly Reduced Its Warranty Coverage by Eliminating Some