The Effect of Reverse Logistics Activities on Brand Equity and Customer Satisfaction: A Case Study in Turkey

Introduction

Consumption of a vast variety of products has increased globally since the 1990s according to the growth of population and living standards. The increasing concern about environmental and energy conservation leads enterprises to reconsider their position in the international market. Regulatory pressure for environmental protection is especially influential for enterprises seeking to compete in the international market. After consumption, the firms are equally responsible for the consumption of raw material from the earth.

Environmental groups such as suppliers, customers and manufacturers in the supply chain expect to reduce harms caused to the natural environment by their products and operations. According to the aforementioned reasons, reverse logistics activities are developing daily for sustainable development. With the consumption of natural resources and growing population, adoption of reverse logistics implementation will turn into a necessity for every industry. Reverse logistics is defined as a management approach by which an enterprise takes back previously shipped products or parts from the point of consumption for repair, remanufacturing, reusing, reconditioning, recycling and disposal (Carter and Ellram, 1998; Dowlatshahi, 2010).The aim of taking back used materials and components is to be used again in the supply chain (Fagundes et al. 2017). The name was coined because it is based on the logistics implementations of redirecting products from their regular final destination with the goal of recapturing value or proper disposal inside an organization in the opposite direction of the usual activities of the supply chain (Mimouni et al. 2015; Rogers and Tibben-Lembke, 2001).

Reverse logistics has garnered attention nowadays by academicians and industrialists and it is outstanding in the quantity of studies published on reverse logistics in recent decades (Acar et al. 2015). Firms are experiencing environmental degradation at a high level due to pollution and a solution is urgently needed. In spite of this, only some enterprises are familiar with the redistribution of returns, and very few enterprises take responsibility for their goods. Enterprises perform these activities due to compliance with environmental regulations specific to the country or region (Brito et al. 2002). The emergence of stricter environmental regulations has forced businesses to begin considering environmental operations management with the list of reverse logistics activities (Govindan and Bouzon, 2018). Reverse logistics activities are needed in order to adapt vast processes such as the utilization of human resources, procedures, leadership values, innovation in technology and recovered quantities of products.

The Turkish government has paid attention to environmental management such as establishing more strict environmental regulations and promoting green production. Although existing studies have researched the importance of reverse logistics, its activities have yet to be well investigated regarding the relationship between reverse logistics, value and customer satisfaction. This study focuses on evaluating the implications of reverse logistics practices. We explore the five dimensions of justice in reverse logistics and how they affect brand equity and customer satisfaction. Turkey was selected for this case study because of its close proximity to the logistics and trade centers of Asia and Europe. The automation industry was chosen because building brand equity and corporate reputation are given significance in this sector. Automation service managers need to pay attention to reverse logistics activities in order to manage customer relationships and loyalty as well as to improve service quality and customer satisfaction.

Customer environmental awareness is mentioned as the customer word-of-mouth effect (Chen et al. 2018). Consumers have a chance to return products due to several known or unknown reasons such as customer dissatisfaction, defects or damage. Customer satisfaction is a post-decision experience (Martin et al. 2011). Brand equity and customer satisfaction are closely related to reverse logistics and has been identified to add incremental value, utility and fundamental capital for vast organizations (Ioannou and Rusu, 2012).