BRP PDF
BRP PDF
BRP PDF
Submitted by
MINSIYA MAJEED
M170032MS
in partial fulfillment of Business Research Project for the award of the degree
of
i
CERTIFICATE
Certified that the business research project report “Customer Involvement In Green
Product Innovation: A Causal Study From Customer’s Perspective” is the bonafide
work of “Minsiya Majeed, M170032MS” MBA in SCHOOL OF MANAGEMENT
STUDIES, NATIONAL INSTITUTE OF TECHNOLOGY CALUCUT carried out
under my supervision during December 2018 to April 2019.
SUPERVISOR
<<Academic Designation>>
<<Name>>
(Office seal)
ii
DECLARATION
I certify that
a. The work contained in this business research project is original and has been done by myself
b. The work has not been submitted to any other Institute for any degree or diploma.
c. I have followed the guidelines provided by the Institute in writing the report.
d. I have conformed to the norms and guidelines given in the Ethical Code of Conduct of the
Institute.
e. Whenever I have used materials (data, theoretical analysis and text) from other sources, I
have given due credit to them by citing them in the text of the thesis and giving their details
in the references.
f. Whenever I have quoted written materials from other sources, I have put them under
quotation marks and given due credit to the sources by citing them and giving required
Minsiya Majeed
iii
ACKNOWLEDGEMENT
I would also like to express my heartfelt thanks to Dr T Radha ramanan HOD, School of
Management Studies, NIT Calicut for his mentorship and continuous support.
I would also like to thank all my teachers for their support and encouragement.
Minsiya Majeed
Master of Business Administration
School of Management Studies
National Institute of Technology, Calicut
iv
ABSTRACT
Although studies have concentrated on green product innovation, it didn’t focus from
customer’s perspective. To address this research gap, this study explores the impact of
customer involvement, knowledge and skill from the customer’s perspective based on the
creativity theory and reciprocity principle. The research hypothesizes were examined
through convenient sampling by collecting 200 responses from general consumers and by
using multiple linear regression. The results indicate that customer involvement, knowledge
and skill of customer have a significant impact on green product innovation.
v
CONTENTS
vi
List of Abbreviations
vii
List of tables
viii
List of Figures
1 Conceptual framework
2 Demographics
ix
CHAPTER 1: INTRODUCTION
Green products are the products which are environment or eco friendly and which does not
harm environment by means of energy, pollution and any toxic substances (Dangelico, 2017).
According to Commission (2001) green product innovation are the products that have low
negative impacts and risks to the environment, utilize less resources and prevent waste
generation in the product’s disposal phase.
Firms are focusing on developing green product for a number of reasons. The poor product
design and poor product disposal that harm environment will make a serious issue to the
environment in future and therefore it is necessary for a firm to integrate green into product
innovation (Lin et al., 2013). This will not only enhances environment performance (Jabbour
et al., 2015) but also make the firm as a differentiator from the competitor and thereby firm
gains competitive advantage in the market (Lin et al., 2013). Thus adapting green product
innovation will help the firm to achieve sustainability in the market (Dangelico and Pujari,
2010) and to achieve business targets and firm performance. This firm performance includes
both financial benefits like market share, sales, and profitability and non financial benefits
such as brand image and reputation (Weng et al., 2015).
In order to adapt green product innovation firms should consider the drivers of green product
innovation. The pressure from stakeholders like employees and suppliers, customer demand
for green products, market pressure from competitors and government regulations forces
firms to develop green products (Melander, 2017). Hence both external (competitors and
government) and internal stakeholders (customer, supplier and employees) influence green
product innovation (Weng et al., 2015).
There are lots of studies which talks about external collaboration for product innovations and
among them the most important are suppliers and customers (Melander, 2017, Melander,
2018, Zhao et al., 2018). According to Melander (2017) the long term collaboration of
customers and suppliers is a strategic decision for the success of green product innovation as
it build trust and enables knowledge sharing.
Among other primary stakeholders, customers are the potential source of innovation (Joshi
and Sharma, 2004) and also customer benefit plays an important role in environment friendly
innovation (Dangelico, 2016, Kammerer, 2009). With the involvement of customers,
1
organizations can develop products based on customers demand and preferences and hence
involving customer in the early stage of green products innovation helps to make necessary
changes and further it avoid wastage of time (Zhao et al., 2018) there by it will lower the
chance of product failure (Lagrosen, 2005) and also increase the efficiency of green product
innovation (Zhao et al., 2018). Hence the importance of customer involvement in green
product innovation is prominent (De Medeiros et al., 2014). Therefore the best strategy that a
firm can follow is collaborating customer to the innovation process (Herregodts). So it is
necessary to identify the factors that influence customers to take part in green product
innovation. According to Zhao et al. (2018) the impact of customer involvement on green
product innovation will be stronger when there is a high uncertainty such as demand
uncertainty and technological uncertainty which act as a moderating role of customer
involvement on green product innovation. This study is done from firm’s perspective and the
author calls for further researches from customer’s perspective to make the innovation
process effective. In addition, not much study has taken knowledge and skill of customers to
identify its impact on green product innovation. Therefore this study focuses on analyzing
customer involvement in green product innovation from customer’s perspective and the
impact of knowledge and skill of customers.
1.1 OBJECTIVE
2
CHAPTER: 2 LITERATURE REVIEW
Green product innovation includes modifications made to product structure, quality and
wellbeing, to decrease the effect of the whole product life cycle on the earth, for example, the
decrease of poisons at production arrange, efficient utilization of vitality, and using
biodegradable bundling (Kammerer, 2009). The effect of production on nature can be mostly
credited to the utilization phase (like fuel utilization and carbon dioxide discharges of
vehicles) and the transfer stage, (for example, the utilization of and inevitable disposing of
overwhelming metal batteries). To put it plainly, green product innovation puts accentuation
on the decrease of the effect of manufacturing, use, and transfer on nature (Dangelico and
Pontrandolfo, 2010)
Green products development is a primary objective of firms with respect to the increasing
environmental pressures (Dangelico et al., 2017; Lin et al., 2013). The input from customers
plays a prominent role for the success of green product innovation. Low degrees of customer
involvement will leads to receive inaccurate or distorted information, which further results in
a low level of green product innovation.
The importance of identifying and satisfying customer needs to achieve sustained success has
been emphasized in the marketing literature (Raju et al., 2011, Kirca et al., 2005, Liao et al.,
2011). Firms can achieve their market‐ sensing and customer‐ linking capabilities by
focusing on customers and this can lead to superior performance (Im and Workman Jr, 2004).
Since market introduction drives a nonstop and proactive mien toward reacting to client
needs and underscores more prominent utilization of client data, it is observed to be
conductive to green product development (Chen et al., 2015). (Feng et al., 2012) further
recognized customer involvement as a vital part of market introduction and recommended
that corresponding data collected from customers can advise firms regarding issues in new
product improvement that they may have neglected. Thus, customer involvement is probably
going to help firms to make necessary changes in the beginning period of green product
development and to abstain from wastage of time.
Customer involvement gives chances to seeking data and arrangements in the outer learning
space, which can help firms to get to integral assets and abilities advantageously (Laursen
3
and Salter, 2006). Customer involvement enables firms to acquire the passage ticket to join
the richness ties and networks kept up by different firms (Cai et al., 2010). By associating
with countless in the systems, firms can assemble data from a wide scope of sources.
Furthermore, customer involvement extends the connection between a central firm and its
customers. Through customer involvement, manufacturers and customers develop a mutual
understanding and basic methods for cooperating, which improve the productivity of green
product innovation (Zhao et al., 2018). Customer involvement can likewise expand the
effectiveness of social affair data identified with customer request and inclinations. Given its
broad systems, customer involvement establishes data diverts in an inventory network that
lessen the measure of time required for firms to gather information and knowledge (Laursen
and Salter, 2006). Firms actualizing customer involvement may source what they need all the
more proficiently and in this way encourage green product innovation. Moreover, the quickly
sourced information can expand the effectiveness of problem‐ solving exercises, which
further impact green product innovation (Zhao et al., 2018). According to the reciprocity
principle, firms should direct green product innovation to satisfy customer need on
eco‐ friendly products to keep up the respective relationship.
According to creativity theory, it is the creative talent that enables consumers to come up
with novel and useful ideas and qualifies them to make valuable and innovative contributions
to a producer’s new product development process (Füller et al., 2012). Several attributes like
lead userness, skill, (Franke et al., 2006), experience, knowledge, divergent thinking,
cognitive style, task motivation (Füller et al., 2012), innovativeness and adoption behavior
(Füller et al., 2008) can be used to examine consumers’ creativity (Füller et al., 2012). For the
success of green product innovation, it is necessary to consider the attributes that leads to
consumers’ creativity. Hence for the study, knowledge and skill are used as variables to
identify its impact on green product innovation.
4
RESEARCH GAP
RESPONDENTS
VARIABLES
FINDINGS
AUTHOR
TITLE
SI NO
5
HUT eristics also differently affect participa
TER, qualify their interest in open nts
K. & consum innovation activities.
HAU ers for
TZ, J. open
2012. innovat
ion
projects
? An
explora
tion of
asymm
etrical
effects.
6
4 FRA Finding User A high intensity of The lead-user Online
NKE, comme innovation, lead-user theory so far commun
N., rcially expected characteristics contains ity
VON attracti benefit, displayed by a user has merely member
HIPP ve user innovation a positive impact on situation- s of kite
EL, E. innovat attractiveness the likelihood that the specific surfing
& ions: A , commercial respective user yields a variables. It
SCHR test of attractiveness commercially would be
EIER, lead‐ u attractive innovation. interesting to
M. ser analyze how
2006. theory. far a high
intensity of
lead user
characteristics
correlate with
individual
factors like
personality
trait
7
qualified community
member.
8
innovation
performance
in the
different
stages of the
development
in the
Taiwanese
manufacturing
industry.
9
9 Claud To tell Product There are benefits at To include students
ia or not innovation, the corporate level both younger , users
Costa to tell? New product (higher perceptions of (Generation and
and The development, innovation ability) to Z) and older professi
Rita impact Innovation inform the market generations onals
Coelh of adoption, about consumer (Generation X
odoV commu Product involvement, and baby
ale nicating complexity particularly when boomers).
2018. consum consumers and
The study of
erpartic company professionals
customer
ipation work together.
involvement
in new The product
in
product complexity plays a
development
develop critical role in
stage.
men translating the
perceptions of greater
corporate abilities
(innovation) in
purchase intention, and
it is particularly
beneficial for low-
complexity products.
10 Anna Utilizin Customer The impact of To examine Member
S. Cui g involvement, customer involvement other s of the
& custom Customer co on product contingent Product
Fang er creation, performance is factors such Develop
Wu. knowle Knowledge contingent upon the as change of ment
2015. dge in management, firm’s technological market and
innovat product capability demand and Manage
ion: Innovation technological ment
anteced turbulence Associat
ents that may ion
and influence the (PDMA
10
impact benefit of )
of customer
custom involvement.
erinvol
vement
on new
product
perform
ance.
12 Anna The Customer CIS is more beneficial How CIS and Member
Shaoji Impact involvement, for new product CIC may s of the
e Cui of new product outcomes when firms contribute to Product
and Custom development. take a more these Develop
Fang er experimental NPD outcomes ment
Wu Involve approach. differently and
2016. ment depending on Manage
on New The effect of CIC is the firm’s ment
11
Product stronger when the NPD experimental Associat
Develo process is NPD ion
pment: characterized with approach. (PDMA
Conting lower experimentation. )
To examine
ent and CIS and CIC also
other
Substit substitute for each
contingent
utive other in their
factors that
Effects contribution to new
will offer a
* product outcomes.
more
When considering the
complete
adoption of CIC, firms
understanding
should take into
of when
account their learning
customer
approaches as well as
involvement
the effectiveness of
is able to
CIS in the NPD
improve
process
innovation
performance.
To examine
the impact of
CIC on
existing NPD
processes.
12
Product sustainability innovations. turing
Innovat and
ion: telecom
Externa industry
l and
Internal
Capabil
ities
13
involve effect on the influence
ment of community
experience and
community trust.
Perceived value plays a
significant mediating
role between subject
factors and customers’
willingness to
participate in value co-
creation.
15 Stefan Custom Product The use of formal Quantitative Case
Lagro er development, methods for customer studies on studies,
sen involve Customer involvement is found customer compani
2014. ment in satisfaction, to be limited. involvement es in
new Relationship There are creative in different Sweden.
product marketing, ways of using cross- levels of
develop Innovation, functional teams in relationships
ment A Team small companies. with the firm.
relation working
ship
marketi
ng
perspec
tive
14
and Knowle novelty, customers who are may also wholesa
Vera dge Knowledge closely related to the affect the le,
Blaze during costs innovating firm results creation of retailing
vic the in more highly relevant knowledge , and
2014. Innovat knowledge at a low and its use. financial
ion cost and
Process technolo
gy-
driven
services
15
and Characteristi positively influences countries.
How do cs, only product
To analyze
Differe Motivations differentiation. With
the effect of
nt for Green regards to factors
firm
Antece Product affecting market
characteristics
dents Development performance of green
on green
Affect . products, prospect of
product
Market market benefits,
characteristics
Perfor availability of new
and market
mance? technologies, firm
performance
A foreign ownership,
over time.
Survey product radicalness and
of differentiation show a
Italian positive influence,
Compa while firm age displays
nies a negative effect.
with
Eco-
Labels
16
The and green innovation
role of performance, but does
internal not moderate the
integrat relationship between
ion green supplier
integration and green
innovation
performance.
The effects of
interaction term on
green innovation
performance and the
moderating effects of
internal integration on
the relationship
between green supplier
integration and green
innovation
performance are
significantly different
across different firm
sizes.
20 Dayua The Legitimacy Legitimacy pressure Future studies Top 100
n Li a, impact pressure, from stakeholders has should focus listed
Mi of Green a significantly positive on other firms, compani
Zheng legitim product influence on both within es in
, acy innovation, corporate green different China
Cuicu pressur Green product innovation and scales and from
i Cao, e and process process innovation. different 2008 to
Xiaoh corpora innovation, Corporate profitability countries. 2012
ong te Corporate positively affects green
Che, profitab profitability. product innovation and
Sheng ility on it has no significant
17
gang green influence on green
Ren , innovat process innovation.
Min ion:
Corporate profitability
Huan Eviden
positively moderates
g ce from
the relationship
2016. China
between legitimacy
top 100
pressure and green
product innovation.
Table 1.
18
CHAPTER 3: RESEARCH METHODOLOGY
Figure 1
Convenient sampling was done for data collection. The respondents were general
consumers. The sample size were calculated using the thumb rule (Roscoe, 1975),
The total number of questions prepared for the survey was 20; hence the sample size
calculated was 200.
19
Questionnaire was used as data collection instrument. There were three sections in the
questionnaire. In section I, it collected information about the consumer’s demographic
data such as gender, education and occupation. In the second section, it collected the
feedback of customers regarding the independent variables (customer involvement,
knowledge and skill of customers). In the last section, the opinion of customers about
green product innovation is collected.
From the responses collected, 58% were male and 42% were female under which
majority of the respondents were students (87.5%) followed by teaching staff (9.5%) and
non teaching staff (3%) and also majority of the respondents have post graduation (66%),
followed by under graduates (23%) and PhD (11%).
Occupation
100
90
87.5
80
70
60
50
Non teaching staff
40 Student
Teaching staff
30
20
10
9.5
3
0
Non teaching Student Teaching
staff staff
20
Gender
Female
42%
Male
58%
Education
PhD Post graduate Under graduate
11%
23%
66%
Figure 2. Demographics
The survey questions for the constructs used five‐ point Likert scales, ranging from 1 =
strongly agree to 5 = strongly disagree. The questionnaire was given in Appendix A.
21
3.3.1 Customer involvement
To assess customer involvement, we adapted scale items that measure the opinion of
customers regarding their involvement in green product innovation (Zhao et al., 2018).
Sample items included “I am ready to propose new ideas to Green product innovation”,
“According to me, customer’s opinion should be consider in the development of green
products” etc.
3.3.2 Knowledge
To assess the knowledge of customer about green product innovation , scale items such as ” I
consider myself as very knowledgeable to contribute to green product development”, “I
possess profound know-how (e.g., concerning technology, materials, market understanding,
product design) relevant for green product development” were used (Füller et al., 2012).
3.3.3 Skill
To assess the skill of customers in green product innovation , scale items such as ” I have
skills to contribute to green product developments, compared to a professional product
developer”, “I have skills to contribute to green product developments, compared to the
leisure activity that I am best at” were used (Füller et al., 2012).
To assess green product innovation, we adapted scale items that measure the interest of
customers to participate in green product innovation (Zhao et al., 2018). Sample items
included “I am interested to participate again in green product development”, “I am interested
in the generation of new ideas and problem solutions for green product development” etc.
22
CHAPTER 4: RESULTS AND DISCUSSIONS
SPSS is the statistical tool used for analysis. Multiple linear regression is used to analyze
the objectives of the study. From Table 2, it is found that R square value is .525.
Therefore it can be understood that the dependent variable, green product innovation
constitute 52.5% of the variability of independent variables.
Also from Table 3, the Regression equation for green product innovation can be
developed as follows:
23
Green product innovation:
y=-0.428+0.34*Customer involvement+0.449*knowledge+0.282*skill
From Table 3, the significant value of the variables customer involvement, knowledge and
skill is found to be less than 0.05. Therefore from the result, it can be found as customer
involvement, knowledge and skill of customer have a significant impact on green product
innovation.
24
CHAPTER 5: CONCLUSION AND SCOPE FOR FUTURE STUDY
5.1 IMPLICATIONS
For an effective green product innovation, organizations can built knowledge and skill
enrichment among customers to involve them in green product innovation. The
willingness of customers to participate in green product innovation is found to be high
in this study and this implies that organizations can easily meet customer demand on
eco‐ friendly products by maintaining a bilateral relationship with the customers.
Customers with good knowledge and skill have a good impact on green product
innovations. Hence firms should make efforts to include such customers in the
innovation part. To implement customer involvement, firms should devote a great
number of resources to make the best use of knowledge and skill available from
customers.
25
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APPENDIX A
Questionnaire
As a key customer
4. According to me, customer has major influence on the design of green products
28
Strongly agree agree Neither agree nor disagree Strongly
disagree disagree
10. I have skills to contribute to green product developments, compared to the leisure activity
that I am best at
11. I am very curious about how things work regarding green product development
29
15. I consider myself to be creative and original in my thinking and behavior
18. I am interested in the generation of new ideas and problem solutions for green product
development
30