T his study empirically investigates consumer perceptions of remanufactured consumer products in closed-loop supply chains. A multi-study approach led to increasing levels of measure refinement and facilitated examination of various assumptions researchers have made about the consumer market for remanufactured products. Based in part on the measure building studies, an experimental study examined remanufactured product perceptions from a national panel of consumers. The consumers responded to remanufactured product descriptions that manipulated price discount and brand equity. The results indicate that discounting had a consistently positive, linear effect on remanufactured product attractiveness. Curiously, the brand equity manipulation proved less important to consumers than specific remanufactured product quality perceptions. The results also show that green consumers and consumers who consider remanufactured products green typically found remanufactured products significantly more attractive. Finally, the findings introduce the concept of negative attribute perceptions, such as disgust, that had a significantly detrimental effect on remanufactured product attractiveness.
This paper examines attention checks and manipulation validations to detect inattentive respondents in primary empirical data collection. These prima facie attention checks range from the simple such as reverse scaling first proposed a century ago to more recent and involved methods such as evaluating response patterns and timed responses via online data capture tools. The attention check validations also range from easily implemented mechanisms such as automatic detection through directed queries to highly intensive investigation of responses by the researcher. The latter has the potential to introduce inadvertent researcher bias as the researcher's judgment may impact the interpretation of the data. The empirical findings of the present work reveal that construct and scale validations show consistently significant improvement in the fit statisticsda finding of great use for researchers working predominantly with scales and constructs for their empirical models. However, based on the rudimentary experimental models employed in the analysis, attention checks generally do not show a consistent, systematic improvement in the significance of test statistics for experimental manipulations. This latter result indicates that, by their very nature, attention checks may trigger an inherent trade-off between loss of sample subjectsdlowered power and increased Type II errordand the potential of capitalizing on chance alonedthe possibility that the previously significant results were in fact the result of Type I error. The analysis also shows that the attrition rates due to attention checksdupwards of 70% in some observed samplesdare far larger than typically assumed. Such loss rates raise the specter that studies not validating attention may inadvertently increase their Type I error rate. The manuscript provides general guidelines for various attention checks, discusses the psychological nuances of the methods, and highlights the delicate balance among incentive alignment, monetary compensation, and the subsequently triggered mood of respondents."To avoid any space error or any tendency to a stereotyped response, it seems desirable to have the different statements so worded that about one-half of them have one end of the attitude continuum corresponding to the left or upper part of the reaction alternatives … These two kinds of statements ought to be distributed throughout the attitude test in a chance or haphazard manner." eRensis Likert (1932)
R ecent research indicates that consumers hold significant concerns about the quality of remanufactured products. To better understand this phenomenon, this manuscript combines surveys and experimental studies to identify the antecedents of perceived quality-in the form of perceived risk of functionality and cosmetic defects-and their significant impact on consumers' willingness to pay (wtp) for remanufactured electronics products. The study also controls for alternative explanations for wtp suggested in the literature, such as consumers' wtp for new products, environmental beliefs, disgust aversion toward used products, brand perceptions, risk aversion, and various demographic traits. Importantly, the study empirically estimates the magnitude and distribution of discount factors for remanufactured electronics productsthe ratio between wtp for a remanufactured product and wtp for a corresponding new product-among consumers. Finally, the manuscript analytically compares a monopolist's decision to include remanufactured products in its portfolio under both the empirically derived discount factor distributions and the classical linear demand model, which assumes constant discount factors. Interestingly, the classical linear demand model remains reasonably robust for high-level insights, such as the presence of cannibalization and market expansion effects. However, the analytical model that uses the empirically-derived distributions of discount factors demonstrates significantly higher profitability than predicted by the classical linear model. This fundamental link between risk perceptions, wtp for remanufactured products, and profitability provides new insights on how to manage demand and product pricing in closed-loop supply chains. Additional Supporting Information may be found in the online version of this article:Appendix S1: Measures and Design Used in Study 2. Appendix S2: Additional Statistical Analysis from Study 2. Appendix S3: Questionnaires used in Study 3.
This work investigates the optimal pricing of new and remanufactured products using a model of consumer preferences based on extensive experimentation. The experimental investigation reveals two distinct segments of consumers. One segment is relatively indifferent between new and remanufactured products and displays high sensitivity to price discounts. The second segment shows strong preferences for new products-with an accompanying aversion to remanufactured products-and realtively low sensitivity to price discounts. The pricing analysis examines several scenarios involving a new product manufacturer, ranging from a simple monopolist scenario to a more complex scenario involving competition with third-party remanufacturers. In contrast to the usual finding that new product prices should decrease when competitive remanufactured products enter the market, the introduction of market segments reveals a robust finding across all scenarios: when remanufactured products enter the market, the optimal price of the new product should increase. Through appropriate pricing of new products, the OEM can mitigate the effects of cannibalization and increase profitability.
Consumer product returns in the United States are approaching three-hundred billion dollars annually. In the majority of cases, the returned products are perfectly functional convenience returns. Managers have a multi-billion dollar profit opportunity to reuse the products by strategically employing remanufacturing. Yet, remanufacturing has multiple barriers that must be understood and addressed. This article addresses several key managerial issues regarding remanufactured consumer products. First, will consumers buy remanufactured products? Second, will the green consumer segment desire remanufactured products? Third, will remanufactured product sales cannibalize new product sales? Finally, this article provides guidance regarding pricing and cannibalization mitigation strategies.
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