Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products

Abstract

In this paper, we investigate whether and how the presence of remanufactured products and the identity of the remanufacturer influence the perceived value of new products through a series of behavioral experiments. Our results demonstrate that the presence of products remanufactured and sold by the Original Equipment Manufacturer (OEM) can reduce the perceived value of new products by up to 8%. However, the presence of third-party remanufactured products can increase the perceived value of new products by up to 7%. These results suggest that deterring third-party competition via preemptive remanufacturing may reduce profits, while the presence of third-party competition may actually be beneficial for an OEM.

Remanufactured Products in Closed‐Loop Supply Chains for Consumer Goods

“…Comm.). This finding is at least somewhat in agreement with Agrawal et al (2014), who note that original brand remanufacturing, as opposed to third party remanufacturing, can be deleterious to the attractiveness of the original brand as a whole. Accordingly, high brand equity household and personal care product firms should carefully evaluate remanufacturing strategies as the lack of a brand equity effect indicates that the brand name provides no attractiveness gain.…”

Perceived quality of remanufactured products: construct and measure development

“…Based on these results, we define PQRP as one's judgment of the lifespan, performance, serviceability, and (when applicable) features of a product that has undergone a remanufacturing process. Thus, the primary contribution of this research is found in establishing this definition and associated PQRP measure, which is a direct response to the calls for research on consumer perceptions and other remanufactured product market related issues (Abbey et al, 2015;Agrawal et al, 2015;JimenezParra et al, 2014).…”

“…Thus, additional investigation into communicating quality considerations across the CLSC is needed. In fact, there have been a number of recent calls for research to investigate consumer markets and perception of remanufactured products with regard to their impact on the CLSC (Abbey et al, 2015;Agrawal, Atasu, & van Ittersum, 2015;Jimenez-Parra, Rubio, & Vicente-Molina, 2014;Pang, Casalin, Papagiannidis, Muyldermans, & Kei Tse, 2015). Guide and Van Wassenhove (2009) further stress the need for empirical research and assert that research has only now begun to investigate the market-related issues surrounding remanufacturing efforts.…”

Measurement of consumers' return intention index towards returning the used products

“…On the other hand, some of the consumers bought remanufactured products due to the linear effect of discounting (Majumdar andGroenevelt, 2011 &Debo et al2005) and positive effect of greenness (Atasu et al, 2008). Agrwal et al (2012) have examined the effect of the presence of remanufactured products and also identify the remanufacturer's influence on the perceived value of new products through behavioral experiments. They found that remanufactured products are sold by the OEM to reduce M A N U S C R I P T A C C E P T E D ACCEPTED MANUSCRIPT 5 the perceived value of new products in the absence of third party remanufacturer.…”