The Impact of Two Types of Customer Involvement on New Product Development: Contingent and Substitutive Effects

Journal of Product Innovation Management, Forthcoming

44 Pages Posted: 20 Jul 2016

See all articles by Anna Shaojie Cui

Anna Shaojie Cui

University of Illinois at Chicago - College of Business Administration

Fang Wu

University of Texas at Dallas

Date Written: 2016

Abstract

More and more companies are actively involving their customers in the new product development (NPD) process. However, there is little consensus regarding the contribution of customer involvement to new product outcomes. A better understanding of this contribution can shed light on whether and when it is worthwhile to involve customers and thus provide firms better guidelines for making such decisions. This study examines the effects of two forms of customer involvement on new product outcomes: the traditional form of customer involvement as an information source (CIS) and the more active form of customer involvement as co-developers (CIC). We offer a better understanding of whether customer involvement can lead to successful innovation by:

(1) identifying conditions that impact the effects of CIS and CIC on NPD outcomes,

(2) contrasting the conditional effects of CIS and CIC to understand how they influence NPD outcomes differently,

(3) examining the potential substitutive relationship between CIS and CIC to understand their joint effects in improving innovation.

We find that an experimental NPD approach that emphasizes trial and error learning moderates the relationship between customer involvement and new product outcomes. Specifically, we discover contrasting contingent effects of CIS and CIC: CIS is more beneficial for new product outcomes when firms take a more experimental NPD approach, whereas the effect of CIC is stronger when the NPD process is characterized with lower experimentation. We also find that CIS and CIC substitute for each other in their contribution to new product outcomes. These findings suggest that each of the two forms of customer involvement has its unique advantages and is suitable for different conditions. When considering the adoption of CIC, firms should take into consideration their learning approaches as well as the effectiveness of CIS in the NPD process.

Keywords: customer involvement, co-development, experimentation, trial and error learning, innovation, new product development

Suggested Citation

Cui, Anna Shaojie and Wu, Fang, The Impact of Two Types of Customer Involvement on New Product Development: Contingent and Substitutive Effects (2016). Journal of Product Innovation Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2811869

Anna Shaojie Cui (Contact Author)

University of Illinois at Chicago - College of Business Administration ( email )

601 South Morgan Street
11th Floor
Chicago, IL 60607
United States

Fang Wu

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
145
Abstract Views
613
rank
201,173
PlumX Metrics