Green Product and Packaging Design with Consumer Engagement

44 Pages Posted: 11 Sep 2020 Last revised: 7 Mar 2022

See all articles by Yunlong Peng

Yunlong Peng

Tsinghua University - School of Economics & Management

Fei Gao

Indiana University Bloomington

Jian Chen

Tsinghua University - School of Economics and Management

Date Written: March 4, 2022

Abstract

In this paper, we consider a firm selling a product with packaging. Many firms have recently
allowed for consumer engagement in the "bring-your-own-container" (BYOC) program, where
consumers can contribute to reducing packaging waste via using their own reusable packaging.
We develop a stylized model to study the firm's pricing, green product and packaging design
decisions when it chooses to implement the BYOC program. We further study one common
government regulation, i.e., the environmental standard on product packaging. Our main results
follow. First, it could be profitable for a firm to offer consumers who engage in the BYOC
program a discount larger than the save in packaging cost. Second, after the implementation
of the BYOC program, while the firm tends to spend less effort on the environmental quality
of its disposable packaging, it may take more effort to reduce the negative environmental
impact of its product. Third, a stricter environmental standard on packaging can induce
the firm to make both packaging and the product itself greener; even so, it may surprisingly
hurt the environment overall, due to its impact on firm's decisions regarding its BYOC program.

Keywords: Green product design, green packaging design, consumer engagement, pricing

Suggested Citation

Peng, Yunlong and Gao, Fei and Chen, Jian, Green Product and Packaging Design with Consumer Engagement (March 4, 2022). Available at SSRN: https://ssrn.com/abstract=3679449 or http://dx.doi.org/10.2139/ssrn.3679449

Yunlong Peng (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Fei Gao

Indiana University Bloomington ( email )

1309 E 10th St
Bloomington, IN 47405
United States

Jian Chen

Tsinghua University - School of Economics and Management ( email )

Beijing, 100084
China

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