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March 18, 2022
UNDERSTANDING THE PLASTICS RECYCLING VALUE CHAIN

The word ‘recycling’ means “the action or process of converting waste into a reusable material” according to the Definitions from Oxford Languages.

However, the act of recycling is a complex process that starts with the correct disposal of waste items and results with the re-use of a value-added material that is beneficial to consumers.

The full recovery process from waste to re-use as part of a new product involves collecting, sorting, and separating at the source. Often complex processing and conversions occur and the recovered material passes through multiple changes before being returned to a new-life with a consumer.

It is then up to the consumer whether the material will be used to either minimise the cost of waste disposal or maximise the net-profit of re-purposing the object – this is when the recycling loop is complete.

In other words, the same plastic item, for example, a cold drink bottle, changes from either being a “waste problem” into “cost” or a “waste problem” into “value” – when fully recycled and re-used. It takes the skill of the recycler to know how to preserve the value in the material as it moves through this process.

USER VALUE VS. PERCEIVED CONSUMER BENEFITS

USER VALUE VS. PERCEIVED CONSUMER BENEFITS

In the recycling sector, a marketing manager needs to know how to add value by increasing the benefits of recycled plastic to the consumer. Meaning that the marketing manager needs to understand the exact needs of the customers and at what point in the value chain, the customer is positioned to purchase.

FOR EXAMPLE

When selling a resin compound directly to a moulder for electrical goods, the buyer at the moulding company needs a good quality polymer that will meet the technical specification at the lowest price for the moulded part.

Once these demands meet the electrical goods manufacturer standard and have been manufactured, the electrical goods will then be sold into a retailer and then to a business or to the consumer.

Only once the final purchase has been made (resin compounder to manufacturer to retailer and then to a business or consumer) all of the attributes of the product has been evaluated against the consumer’s list of important benefits, including; brand, functionality, style, design, energy consumption, reliability, environmental impact – this increasing part of the purchasing decision made by the customer.

As the marketplace has become more and more competitive, the customer is be faced with multiple choices for one individual item. When selecting an item for purchase, the consumer is looking at price versus functionality and then a list of the perceived benefits from the brand – it’s these perceived benefits that will influence the customer to make a final purchase.

The perceived benefits of the product’s unique history and environmental impact all the way down the value chain to the customer who purchases the item at a retail store makes the marketing job of the product more complex.

This is where the importance of the upstream supply chain comes in – the end user needs to understand the value as well as the importance of the final product. In other words, the polymer producer, manufacturer, supplier and retailer need to set up a fully traceable inward supply stream with clearly defined segregation between the different groups (recyclables and newly produced), so that the consumer is able to perceive all benefits of the final product.

Once this principle has become well-defined, segregation has been confirmed and built into the company’s operating model, other benefits start to appear. For example, the carbon impact of the raw material to the final product may label the polymer producer, manufacturer, supplier and retailer as environmentally conscious or “green”. This is then understood and used by retailers as a way to show the sustainable value of products.