The purpose of this paper is to address what a sound warranty policy entails by identifying the key variables involved in the development of a warranty program.
The sample population was composed of employees in the US division involved with high‐tech product warranties. A survey questionnaire was used to collect data from the participants.
The paper finds that the formality of the warranty policy should depend on its complexity. Differences exist between types of warranty based on the product knowledge of the buyer. Although a standardized warranty is easy to administer, as the product line diversifies, it becomes more challenging to standardize.
This study can be expanded by examining how companies balance the cost/quality/warranty ability of the product, the techniques used to allocate warranty costs, and to evaluate multiple companies/industries, perhaps with a longitudinal focus.
The formality can be used to communicate the product warranty throughout the organization. Each department has a responsibility to the customer, so team members from service, product development, and marketing should plan and develop the warranty. A standardized warranty can send a clearer message to a customer about a firm's products. Simplifying front and back‐end processing and streamlining support structures can reduce costs.
In this paper, the identified key variable is brought out in warranty management framework. The development of this framework will satisfy a current, critical need to provide guidelines with all the steps needed to develop a warranty policy.
