Consumer Markets in Closed-Loop Supply Chains

Abstract

Though product reuse through closed-loop supply chains has many benefits for firms, as outlined throughout this book, consumers may not fully appreciate the benefits of buying previously used products. This conjecture led to a series of studies related to how consumers perceive reused products produced in a closed-loop supply chain. Specifically, this chapter summarizes the results from a series of studies that examined how consumers perceive remanufactured and refurbished products. The studies ranged from measuring simple reactions to remanufactured products through experimental manipulation of discount levels and brand equity as a means to determine the appeal of remanufactured products in the general U.S. consumer market. The findings breakdown into multiple levers that prompt consumer interest in remanufactured products including the usually assumed consumer greenness, quality perceptions, discounts, and brand equity. However, the studies also revealed the issue of aversion toward remanufactured products through both disgust and a segment of consumers who only desire new products.

Designing a circular business strategy: 7 years of evolution at a large washing machine manufacturer

“…In addition, for the economy and budget leases, remanufactured machines are used. It is well known that consumers are less eager to pay for remanufactured products than for newly manufactured ones in a sales system (Abbey et al, 2015; Atasu et al, 2010; Guide & Li, 2010; Kleber et al, 2018; Souza, 2013), mainly due to the lower perceived quality of remanufactured products (Abbey et al, 2017; Abbey & Guide, 2016). Prices drive customer preferences to the greatest extent (Hunka et al, 2021).…”