Purchase intention of frugal household appliances among generation y in Germany – modified tam approach

Abstract

Frugal innovations are characterized by a focus on the core product functions, high product quality, and the reduction of raw material and financial resources across the entire value chain. They were initially developed for people in emerging countries and focused on the unmet needs of people at the bottom of the pyramid (BOP). Different researches show that frugal innovations could also be interesting for people in industrialized countries. Existing literature indicates that customers in developed countries have different acceptance factors for frugal innovations than customers in emerging countries. The present study refers to this gap. For the first research, potential users of Generation Y from Germany are used. This generation comprised a large consumer group of more than 15 million people. They are characterized by their interest in sustainable products and social fairness. Household appliances such as washing machines, dishwashers, or coffee machines are used as a potential product group for frugal innovation in developed countries like Germany. They have been an integral part of daily life in industrialized countries for many years, but they are expensive and often highly sophisticated with many functions. The basis for the study is the Technology Acceptance Model (TAM) expanded based on the literature. A total of 12 hypotheses were derived and combined into a study model. The subject of the research was Generation Y in Germany. For model testing, a dataset of 463 participants was generated through an online survey from December 2020 to January 2021. A multi-equation structural model was created and evaluated with the variance-based procedure PLS-SEM to analyze the relationships. The results confirmed that even in the case of frugal household appliances, the opinion of third parties influences the usefulness and the purchase intention in Generation Y. Furthermore, there was an influence of environmental awareness on the attitude towards use. Despite the affinity for technological applications, the ease of use of a frugal household appliance was shown to influence the usefulness of frugal household appliances. Contrary to expectations, the performance expectations of household appliances and the possible price advantage did not influence usefulness within this consumer group. This study concluded with indications for future research approaches in this research area.