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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 19 Disposal, Recycling, and ReUse Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives After completing this chapter, you should be able to: Understand that disposition is a growth industry that provides many marketing opportunities Recognize that product disposition is an increasingly important area for public policy Discuss some of the practical implications that disposition has for managers Explain the differences between voluntary and involuntary disposition Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives (continued) Describe the social, individual and situational factors that affect disposition choices Realize how understanding disposition provides key insights into consumption behavior. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Overview Disposition Disposal encompasses all those behaviors that consuming units undertake to divest themselves of undesired goods and services. Why and the Wheel of Consumption: consumer disposition? Disposition is a growth industry providing many marketing opportunities. Disposition is an important area for policy activity. Disposition has practical implications for managers. Disposition provides insight into consumption behaviors. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Disposition Disposition tactics: storing or keeping the product disposing of it temporarily disposing of it permanently green approach; minimizing the need for disposition deconsumption: consuming less. Backward channel of distribution: move goods in the opposite direction from traditional channels that move goods from producers to consumers Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Historical and Cross-Cultural Perspectives on Disposition Garbage was often left where it lay in human dwellings with layers of new flooring occasionally laid over the waste. In ancient times, pottery was equivalent of modern containers made of glass or plastic; it was extensively recycled. In the late Middle Ages in Europe, failure to deal with urban solid-waste disposal led to the Black Plague. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The Disposition Process Disposition Physical or spatial detachment from a possession object Detachment from the meanings and emotions associated with objects. A Model consists of two interrelated components: of Disposition: The physical disposition cycle starts when raw materials enter the manufacture process and then are distributed to households or firms that acquire, use, and dispose of them. Exhibit 19.1 Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Disposition Chains Simple Reuse Secondhand Reuse (lateral recycling) Occurs when a product is given away as a gift or through inheritance to friends, family or strangers or sold to another household or traded for another product Secondhand Trade Occurs when a product is reused by the consumer for its original purpose or for a different purpose Takes place when ownership for the used products is first transferred to an intermediary before distribution to new users. Resource Recovery (recycling) Takes place when the product or its parts are used as a secondary resource in the production of new products. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Other Disposition Issues Special treatment of waste products Voluntary disposition Exhibit 19.1 People make considered decisions about disposition, including selling, trading, giving away, recycling, throwing away, abandoning, using up, and destroying Exhibit 19.2 Involuntary disposition Loss of products through legal and illegal transfer, loss, destruction, etc. Exhibit 19.3 Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Profiles of Disposition Behaviors Discard it: simply throwing something away waste-making society: one in which people’s first thought is to discard rather than reuse or recycle unwanted possessions Sell it: swap meets: consumers get together in informal markets to buy or trade their used goods Electronic flea markets: Internet auction sites Donate it: giving things away Gift it: form of consumer acquisition preinheritance: living bequests of household resources. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Profiles of Disposition Behaviors Store it: storage is a basic consumer necessity time-marked goods remind people who they once were, invite comparison with who they are now, and highlight how they have changed Recycle it: close-loop manufacturing, where simplified recycling is built into products from the design phase on Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Situational and Individual Factors Affecting Disposal Choices Factors intrinsic to the product: materials, purchase price, replacement cost Competitive pressures Situational factors extrinsic to the product: finances, storage space, fashion change, use context, method of acquisition, legal considerations, downstream externalities. Life status changes: occurs when consumers experience a shift in their social roles. Psychological reactance: a response to a threat to behavioral freedom Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Segmentation and Psychographic Factors Affecting Disposition Marketing plans: attempt to satisfy customer needs attempt to achieve organizational goals sustainable marketing (Donald Fuller) marketing plans should be constructed so that they are compatible with ecosystems. Segmentation: green segments - consumers whose acquisition behavior is affected by proenvironmental attitudes and behaviors. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Segmentation and Psychographic Factors (continued) Four types of segments for environmentally responsible buying (ERB) What the product is made of Where the product comes from Who the product comes from Demographic and psychographic factors: motivation, knowledge, affect, experience, involvement, , age, education, income. Personal values such as altruism, biospheric orientation or earthfirst orientation relate to positive beliefs and attitudes toward recycling and waste reduction behaviors. Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Disposition as a Product Choice Criterion In many product choice situations, need for a clean, habitable ecosystem is not particularly associated with the exchange process. Environmental benefits remain an underlying or latent factor. Challenge for marketing managers to make ecological needs and concerns more salient. Prisoner’s dilemma: Everyone benefits if all comply; but if one person doesn’t comply, his or her immediate benefits may outweigh the general good. Private economic incentives are necessary to encourage cooperation. Recycled and green products Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Key Terms backward channel members backward channel of distribution biospheric orientation close-loop manufacturing deconsumption donation electronic flea markets garage sales Prisoner’s dilemma product biography psychological reactance recycling resource recovery secondhand reuse secondhand trade selling Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Key Terms (continued) green products green segments inheritance ISO 14000 lateral recycling model of disposition preinheritance selling simple reuse storage sustainable marketing swap meets time-marked goods waste-making society Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.