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The Contemporary Marketing Management Glossary

Circular Economy

Short Definition

An economic model designed to eliminate waste and keep products, materials, and resources in use for as long as possible through regeneration, reuse, and recycling.

Context

The concept of the Circular Economy (CE) emerged as a systemic alternative to the traditional linear economy based on “take–make–dispose.” It integrates ideas from industrial ecology, cradle-to-cradle design (McDonough & Braungart, 2002), and biomimicry, emphasizing cycles of renewal inspired by natural ecosystems. Modern CE frameworks have been promoted by organizations such as the Ellen MacArthur Foundation, which defines the model as restorative and regenerative by design.

Extended Definition

Circular Economy represents a fundamental shift in how value is created, distributed, and sustained within modern business and marketing systems.

In the perspective of Contemporary Marketing Management, it moves beyond the traditional goal of maximizing consumption and embraces a model of continuous value circulation, where design, production, and communication are all oriented toward durability, reuse, and regeneration.

This approach transforms marketing from a driver of demand into a facilitator of sustainable relationships—between companies, consumers, and the environment.

Rather than promoting newness for its own sake, the circular model encourages organizations to emphasize longevity, service, and shared responsibility.

In practical terms, it integrates multiple disciplines:

  • Strategic design, ensuring that products and services are conceived for reuse and modularity.

  • Supply chain innovation, supporting reverse logistics, material recovery, and renewable resource use.

  • Consumer engagement, turning customers into participants in circular systems through transparency and education.

  • Digital technologies, including IoT and data analytics, which enable traceability and closed-loop efficiency.

Within Contemporary Marketing Management, the Circular Economy represents not just an operational framework but a new marketing paradigm: one that measures success through resilience, reputation, and relevance rather than volume or velocity.

It challenges organizations to redefine growth as a continuous process of renewal—economic, environmental, and relational.

Contemporary Example

Companies like IKEA, Philips, and Patagonia have adopted circular strategies such as product take-back programs, modular design, and renewable material use. In B2B contexts, Michelin offers tire-as-a-service models, transforming a consumable good into a performance-based, circular offering that reduces waste and increases efficiency.

See also

Part of chapter: Glossary