The joint effects of customer participation in various new product development stages

Abstract

The notion that customers provide distinct inputs that help tackle unique tasks in each new product development (NPD) phase leads firms to engage customers concurrently in various NPD stages rather than involving them only in one NPD stage. Involving customers in diverse NPD stages is based on the belief that the constructive effects of customer participation in each NPD phase could be supplementary. However, little is known about the joint effects of embracing customers in multiple NPD stages such as whether customer participation in a certain NPD stage enlarges or undermines the returns of customer participation in another NPD stage, and whether customer participation throughout the entire NPD process is really beneficial. Drawing upon the knowledge management perspective, this research investigates in which combination of NPD stages (ideation, development, and launch) engaging customers creates a synergistic or destructive impact on new product market performance. The results reveal that involving customers in both ideation and development stages and in both development and launch stages yields synergistic returns, whereas customer participation in both ideation and launch stages does not create any additional gains. Furthermore, customer participation across all three NPD stages does not improve new product market performance beyond the sole and joint effects of customer participation in two NPD stages. These noteworthy findings imply that the joint effects of customer participation do not always lead to synergistic impacts and depend on the value of customer knowledge and the difficulty of knowledge management of transferring and integrating customer knowledge gathered in various NPD stages. In a certain combination of NPD stages, where the difficulty of knowledge management becomes higher, customer participation cannot generate supplementary returns, and thus, firms can achieve a similar level of new product market performance with customer participation in limited NPD stages.