Customer participation and new product development outcomes: The moderating role of product innovativeness

Abstract Investigation of customer participation in new product development (NPD) performance has yielded conflicting results. This study explores the idea that intensive customer participation is not always better. Instead, the usefulness of customer participation in NPD is determined by the fit between product innovativeness and customer participation as information providers and as co-developers. An empirical study of 196 NPD projects of Taiwanese high-tech firms is analyzed by structural equation modeling. The findings show that product innovativeness negatively moderates the impact of customer participation as information providers on NPD outcome. Thus, the greater the involvement of customer participation as information providers in radical innovation projects, the lower the NPD outcome. Moreover, our results also indicate that product innovativeness positively affects the relationship between customer participation as a co-developer and NPD outcome, which suggest that the more customer participation as a co-developer in a radical innovation project, the better the NPD outcome.