INTRODUCTION

Analysing the potential market for refurbished smart phone

A refurbished smartphone refers to a model that has been returned to the manufacturer, tested for
problems, and restored to full-functioning, factory-standard condition. Most major cell phone
retailers offer refurbished phones at a highly discounted price

Relevance of the Study Objective

• As smartphones are being replaced at an increasing rate, it ✓ To investigate perceived consumer risks and benefits
becomes more and more important to find ways to reuse associated with refurbished phones
(parts of) existing phones
• Refurbishing is a promising strategy to contribute to the ✓ To study the impact of various incentives that companies can
Circular economy and reduce the detrimental impact of employ to improve consumers’ purchase intention of
smartphone consumption refurbished phone
• Commercially viable for companies
Current Market Scenario ✓ Identify the distinct Customer groups for the refurbished
• Refurbished smartphones market is on the rise smartphone market and the most potential buyer groups
• Expected growth in U.S. market is 55 million units by 2020
• In India online market place for buying refurbished ✓ Investigate consumer responses towards refurbished
smartphones have been initiated by amazon, ebay, snapdeal smartphones and the effects of various incentives for
etc. different customer groups.

*http://blog.hylamobile.com/refurbished-mobile-device-market-new-recycling-frontier
 APPROACH

Theoretical framework of the consumer decision-making process when purchasing refurbished smartphones
PRE PURCHASE Initial ORIENTATION Final EVALUATION
Purchase POST PURCHASE
PHASE consideration PHASE Consideration PHASE
Decision PHASE
Set Set
Need
INITIAL Recognition
BARRIERS BENEFIT-RISK
RESPONSES

• Benefits:
• Lack of Awareness :prevents consumers from considering
• Financial Benefit
the purchase of a refurbished smartphone [1]
• Environmental Benefits
• Misconception of the refurbishing concept : difference
from second-hand smartphones is not directly clear to Risks:
some consumers [2] • Performance Risk [5]
• Financial Risk [6]

Individual Difference influencing adoption

Customer Involvment : Consumer Value
Knowledge about Environmental
Interest that customer Innovativeness: Consciousness Consciousness: Social Adjustive Funcion: Value Expressive Function:
product
has in this product Inclined to try new Keen on receiving How consumers see use Derire to use product that
Sustainability is a
category things Value for Money of products on Public fts ones identlty/ beliefs
determining factor in
decision
METHODOLOGY

Questionnaire
• Analysed the contribution of each
factor towards purchase intentions

• No. of respondents :
Step 1 using multiple stepwise Regression

96
• 7-point Likert scale
• Used cluster analysis to identify
Questions based on: different customer segments on the
basis of psychographic differences
➢ Purchase intentions Step 2
➢ Impact of Incentives
➢ Individual
Psychographic
differences • Repeated Measures Anova was used
to study the impact of incentives on
purchase intentions
Step 3
Effects of awareness, risks and benefits on the purchase intention of refurbished smartphones
Independent Variables METHODOLOGY MULTIPLE REGRESSION

Awareness of Refurbishing RESULTS:

Financial Benefits
✓ The regression model explained 40.2 % variations in purchase
intentions
Environmental Benefits ✓ positive effect found for :
✓ Financial Benefits (β=0.356)
Performance Risk
Dependent ✓ Value Consciousness (β=0.256)
Variable
Financial Risk ✓ Negative Effect found for:
✓ Performance Risk (β= -0.196)
Consumer Involvement
✓ Customer innovativeness (β= -0.202)
Purchase Intention
Product class knowledge ✓ Social Adjustive Function (β= -0.025)

Consumer Innovativeness

Value Consciousnes

Environmental Consciousness

Social Adjustive Function

Value Expressive Function

potential of incentives in increasing the purchase intention of refurbished smartphones

Upgraded Battery
METHODOLOGY: Repeated Measures ANOVA
Upgraded Performance
IDENTIFICATION OF POTENTIAL INCENTIVES: EXPLORATORY RESEACH
Upgraded Screen

Upgraded Internal Storage

Upgraded Camera

More Innovative features RESULTS:

Updated appearance
✓ upgraded battery had the highest score, hence highest
Guaranteed Software Updates potential for increasing the chance to purchase a
Longer Trial period refurbished smartphone
Extendable Protection warranty ✓ Product Related Incentives had the highest score
coverage ✓ Customer preferences in order
Extendable protection warranty period 1. Upgraded Battery
Leasing option 2. Guaranteed software Updates
Information on refurbishing process
3. Upgraded Performance
4. quality certification
Classification System 5. classification system
Unbiased testimonials 6. information on the process
Quality certifications
CLUSTER ANALYSIS
To investigate differences between various customer groups concerning their evaluation of refurbished smartphones

CASUAL
SUPPORTER
METHODOLOGY : K MEANS CLUSTER ANALYSIS “I like sustainable
Using seven variables measuring the individual products, but I
see my
differences smartphone
• Involvement SUSTAINABILIT
• Product_Class_Knowledge EXPERT mostly as a
• Consumer_Innovativeness TECHIE tool”
Y ENTHUSIAST
• Value_Consciousness “I set high
“I happily pay the
• Enviornmental_Consciousness price for any
demands for the
• Social_Adjustive_Function sustainable
smartphone I use”
alternative”
• Value_Expressive_Function
CUSTOMER
SEGMENTS
CLUSTER ANALYSIS RESULTS: PROUD
CONSERVATIV
POWER USER
E CRITIC
• The one-way ANOVA over the six clusters was “I select my
“I’m not fully
significant at p < 0.05 smartphone based
on both convinced by
• Significant differences between clusters regarding the performance and sustainable
response to refurbished Smartphones SUSCEPTIBLE electronics”
symbolism””
• Clusters ‘Casual Supporter’ and ‘Susceptible follower’ FOLLOWER
has a higher purchase intention of refurbished “I want a
smartphones smartphone that
• Most of the clusters had preference for product expresses who I
am””
incentives
 CLUSTER ANALYSIS RESULTS
Casual Susceptible
Final Cluster Centers Suporter Follower Conservative Critic Sustainability enthusiast Expert-techie Proud Power User
1 2 3 4 5 6
% of Respondents 10 18 19 11 22 20
Involvement 4.51 5.31 4.09 5.09 5.68 6.15
Product_Class_Knowledge 3.23 4.2 2.91 4.09 4.95 5.73
Consumer_Innovativeness 2.17 2.96 2.07 1.55 3.85 4.17
Value_Consciousness 6.1 4.94 5.12 2.55 5.85 6.2
Enviornmental_Consciousness 5.43 6.28 5.86 6.55 5.85 5.67
Social_Adjustive_Function 2.2 4.22 2.02 1.94 1.74 3.7
Value_Expressive_Function 3.43 5.24 2.91 4.61 2.26 5.03

Purchase Intensions 5.90 5.22 5.42 5.91 5.18 5.20

General attitude 5.58 5.69 5.78 6.18 5.67 5.56
Awareness Of Refurbishing 4.20 3.82 4.16 3.79 4.55 4.68
Financial benefits, 5.47 5.09 4.95 5.30 5.00 5.02
Environmental benefits 5.97 6.31 6.35 6.45 6.38 6.30
Performance risk 4.33 4.41 3.47 3.64 4.15 4.53
Financial risk 3.67 3.74 3.39 3.24 3.70 3.83
INTERPRETATION OF CLUSTERS
• High purchase Intention

Conservative critic
Casual Supporters

Sustainability
enthusiast
• See less perceived Risk • relatively negative attitude towards the
purchase intention is the highest of all • highest motivation to use sustainable proposition of refurbished smartphones
customer groups products, the proposition of a • The scores for many incentives are lower than
Perceive less performance risk refurbished smartphone is appealing those of the other customer groups, hence
• Low Involvement to them persuading may be challenging
• See more as more as a utilitarian tool • do not desire the newest features. • low involvement in and knowledge about
than a status symbol or • Price is less important smartphones
extension of their personality • Prefer smartphones with standard
• low level of innovativeness and features
conservative purchase behaviour • The purchase intention of
• Influenced by incentives battery, Sustainability Enthusiasts is influenced
guaranteed software updates and an most by the product-related
upgraded performance incentives of guaranteed software
updates, an upgraded battery, and
upgraded performance.
Susceptible follower

Proud power-user

Expert techie
• high scores for both the value- • highest scores for involvement and knowledge.
• involved in and knowledgeable about
expressive and social-adjustive • innovative, which suggests that Proud Power-
smartphones and like to have the
functions of smartphones, hence Users tend to buy the latest available
latest technology
may believe that a refurbished technology
• low purchase intention
smartphone does not fit their • Low purchase Intention
• response towards the incentives
personality or that this is perceived • Price is an important factor in making a
reflects their expertise and desire for
as such by their peers purchase decision.
new technology and high performance
• Being unfamiliar with refurbishing, • Express strong value-expressive and social-
acquiring more information on the adjustive functions of smartphones
process will also • Being an expert user, the Proud power-user is
• increase their purchase intention familiar with the practice of refurbishing, but
their initial evaluation is rather negative.
• Have relatively high scores for the product
related incentives
CONCLUSION
Contributions through research

• Improved understanding of consumers’ purchase intentions

• Insight in the effectiveness of specific incentives to increase consumers’ purchase intentions
• Knowledge about different consumer groups, attitudes

Outcomes

Insights can help companies to focus their product marketing and positioning strategies on specific
customer groups

Limitations Future Scope

Limited to smartphones only The research can be extrapolated to other

Our research did not investigate the refurbished products
role of brands The research can be expanded to multiple
Respondents may have experienced geographies and age groups
difficulty in imagining these effects
LITERATURE REVIEW
• PERCEIVED PERFORMANCE RISK
Guide and
Li, 2010; Michaud and Llerena, 2011; Van Weelden et al., 2016;
Wang et al., 2013
• FINANCIAL RISK
Hamzaoui Essoussi and Linton, 2010; Michaud and
Llerena, 2011; Wang et al., 2013
• UNCERTAINTY ABOUT THE PERFORMANCE
Van Weelden et al., 2016; Wang and Hazen, 2016;
Wang et al., 2013
• CONSUMER AWARENESS
Michaud and Llerena, 2011; Van Weelden et al., 2016;
Wang et al., 2013
• INFORMATION ABOUT INDIVIDUAL PRODUCTS
Michaud and Llerena, 2011; Van Weelden et al.,
2016; Wang et al., 2013
• ENVIRONMENTAL CONSCIOUSNESS
Kim and Choi, 2005
• SOCIAL-ADJUSTIVE FUNCTION
Grewal et al., 2004
• VALUE-EXPRESSIVE FUNCTION
Grewal et al., 2004; Mugge et al., 2009
• VALUE CONSCIOUSNESS
Guide and Li, 2010; Hamzaoui Essoussi and Linton,
2010; Michaud and Llerena, 2011; Wang et al., 2013
• CONSUMER INNOVATIVENESS
Atasu et al., 2010; Guide and Li, 2010; Jimenez-Parra
et al., 2014
THANK YOU