Green consumer behaviour: an experimental analysis of willingness to pay for remanufactured products

Abstract

Products' end-of-life management has recently become a critical business issue. One of the possible end-of-life strategies is remanufacturing, which can provide competitive advantages through material and energy savings. Beyond industrial organization challenges, there is a question about the interest of developing a green marketing strategy for remanufactured products. Indeed, remanufactured products can be considered as green products since their industrial process has environmental benefits. Our paper asks whether consumers are willing to pay for remanufactured products, especially when they are informed that these products are 'green'. We use experimental auctions to elicit consumers' WTP for specific characteristics of remanufactured products. Our study indicates that consumers tend to value the remanufactured product less than the conventional one unless they are informed about their respective environmental impacts. We find no evidence that consumers are willing to pay a premium for the green (i.e. remanufactured) product. However, providing environmental information to consumers has an effect on their WTP for the conventional product: they generally decrease significantly their WTP for the conventional (and thus most polluting) product.

Introducing Sustainability in Value Models to Support Design Decision Making: A Systematic Review

“…Price premium for green products is limited [33] and willingness to buy is strongly related to the ability of informing customers about the benefit of purchasing green [34,35]. The consumption of environment-friendly alternatives seems also affected by frequency of use [36] and level of functional risk [37].…”

An Analysis of the Green Product Attributes that Entice Green Purchasing- A Study Done in Bangalore City

“…The fact remains the same that until and unless customers are not receiving proper information about the green product, it is quite normal that they will consider green product as an inferior one when compared to the conventional product (Michaud and Llerena, 2011). At the same time, customers will not buy a product just because it is green; they are not ready to compromise with its quality (Braimah and Tweneboah-Koduah, 2011).…”

Prediction of Consumer Behavior Regarding Purchasing Remanufactured Products: A Logistics Regression Model

“…Michaud and Llerena (2011) investigate consumers' willingness to pay (WTP) for remanufactured products by using experimental auctions. They concluded that a large number of consumers assume remanufactured products to have a lower quality level than that of new products.…”