Warranty planning and development framework: a case study of a high‐tech multinational firm

Purpose – 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. Design/methodology/approach – 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. Findings – 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. Research limitations/implications – 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. Practical implications – 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. Originality/value – 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.