Abstract:
Customer participation in the new product development (NPD) process is becoming more common. Involving customers in the NPD process has been widely considered to enhance market adoption of co-created products and speed up time to market. However, several potential risks relevant to coordination among co-production activities have been raised in recent studies. Drawing on coordination theory, this dissertation examines the conditions under which customer participation in the NPD process improves or deteriorates new product success. The specific focus is on non-linear relationships between customer participation and market adoption and time to market. Furthermore, this dissertation investigates the differential effects on market adoption and time to market of when customers are engaged, the breadth of customer participation, NPD teams' capability to leverage customer insights, product individuality, and price positioning strategy of co-produced products. In Study 1, the hypotheses were tested using data from 647 NPD projects from SourceForge.net, a leading open source software development repository in which end users are involved in developing new software. To test generalizability of the results, Study 2 investigated the same hypotheses based on survey data from 159 NPD managers who have worked on NPD projects in which customers have been involved to some extent to co-create new products. The results of Study 1 show that customer participation enhances market adoption up to a certain point but degrades it beyond that point. Furthermore, the inverted U-shaped relationship between customer participation and market adoption is moderated by breadth of customer participation and the NPD team's co-production capability. With regard to time to market, the findings of Study 1 demonstrate that customer participation continuously slows time to market, confirming serious risks of customer participation. Although the curvilinear relationship found in Study 1 is not extended to various industries of Study 2, the results of Study 2 still indicate that the relationship between customer participation and market adoption is moderated by the timing and breadth of customer participation, and product individuality. The findings highlight a close analysis of benefits and costs of customer participation and provide insights into how and when customers should be engaged in the NPD process.
