Market success through recycling programs: Strategic options, consumer reactions, and contingency factors

Abstract

Environmental problems caused by waste are drawing growing concern worldwide. Such waste problems are even worse in many emerging markets, where waste is frequently mismanaged and thus causes significant environmental problems. To alleviate such waste problems and address stakeholders' growing environmental concerns, firms have launched recycling programs as one specific corporate social responsibility initiative. While past studies examine recycling programs from a technical perspective, very little research investigates the marketing benefits of such programs. This study draws on signaling theory to develop hypotheses about how firms can strategically design and market a recycling program to trigger positive consumer reactions. Using hierarchical linear modeling of survey data on mobile phone recycling programs across multiple brands, it finds that multiple strategic options of a recycling program (i.e., a product buyback program, product recycling convenience, and packaging recycling) differentially influence consumers’ brand attitudes, which consequently affect brand loyalty. Furthermore, an analysis of contingency factors (i.e., brand switching risk, public self-consciousness) suggests that a product recycling program affects brand attitudes only when the brand switching risk is low, and that packaging recycling affects brand attitudes more for consumers with higher public self-consciousness.