Consumer Valuation of Remanufactured Products: A Comparative Study of Product Categories and Business Models

Abstract

Understanding consumer valuation of remanufactured products is vital to the success of the remanufacturing business. However, whether and how product categories and business models influence the consumer valuation have not been investigated in detail. To test the effects of product categories and business models on the consumer valuation and acceptance of remanufactured products empirically, this study presents a survey on the relative value of remanufactured products perceived by the consumers. Six product categories (low-end laptops, high-end laptops, smartphones, gaming consoles, printers, and water purifiers) and two business models (the buying model and the rental model) were selected as the factors. Negative perception (NP), purchase intention (PI), and acceptable prices (APs) were used as measures of the perceived value. A group of 95 students from a Korean university participated in the survey. Statistical hypothesis testing shows that both the product categories and the business models cause significant differences in the relative value of remanufactured products. Especially, the results indicate that certain product categories are more advantageous for remanufacturing from a consumer-demand viewpoint. The results also show that the suitability of the rental model varies across the product categories; for certain categories, the rental model can be a better option for remanufacturing.

Remanufactured products: A systematic review from the consumer perspective

“…But they only considered purchasing online, RP design, brand reputation, and availability in conventional distribution channels, even though there are various aspects such as quality, knowledge, advertisements, price discounts, etc., regarding the marketing-mix related constructs. Business models like buying vs. rental also affect purchase intention [ 44 ]. The reviewed papers show us that the most studied marketing-mix-related construct is product.…”

“…Consumers’ willingness to pay a premium price for RPs [ 31 ], negative perception toward RPs [ 44 ], repulsion or disgust effect differs [ 1 ], the attractiveness of RPs [ 2 ] between product categories. For instance, while discounted prices positively affect the attractiveness of remanufactured technology, household, and personal care products, green attributes don’t significantly affect remanufactured personal care product attractiveness [ 2 ].…”

Monte Carlo Simulation of the Effect of Heterogeneous Too-Cheap Prices on the Average Price Preference for Remanufactured Products

“…For the simulation, the distributions of TC and WTP were first identified. Survey data from Lee and Kwak [5] were adopted to fit and model TC and WTP.…”

“…As the circular economy is emerging as a new paradigm for sustainable production and consumption, remanufacturing, a vital component of the circular economy, is attracting increasing attention from both academia and industry [1][2][3][4][5]. Remanufacturing is the process of restoring used products to a like-new state by reconditioning or replacing certain parts [6][7][8].…”

“…As consumers may judge the quality of the product from its price, overdiscounting or cheap prices may signal inferior quality, leading to a lowered preference [22,23]. Similarly, Lee and Kwak [5] recently reported empirical evidence highlighting the existence of a too-cheap price (TC), that is, the minimal acceptable price below which a customer does not purchase the product due to concerns over product quality. Their survey demonstrated that customers have both a WTP and a TC for remanufactured products.…”