Customer Participation and the Trade-Off between New Product Innovativeness and Speed to Market

Abstract

To address the trade-off between new product innovativeness and speed to market caused by customer participation activities, the author differentiates two dimensions of customer participation—customer participation as an information resource (CPI) and customer participation as a codeveloper (CPC)—and explores the moderating effects of downstream customer network connectivity and new product development process interdependence and complexity. Matched data collected from 143 customer–component manufacturer dyads indicate that CPI has a negative influence on innovativeness when downstream customer network connectivity is high but a positive effect when it is low. In contrast, CPI has a positive effect on speed to market when downstream customer network connectivity is high and no significant effect when it is low. In addition, CPC undermines new product speed to market when process interdependence is high. In contrast, CPC can improve new product speed to market but hurt new product innovativeness when process interdependence is low. The results of this article provide specific managerial guidelines as to how to manage customer participation to improve new product innovativeness and speed to market.