Recent research proffers guidance for managers seeking to explore the potential of frugal products in addressing consumers’ need for higher value products while minimizing environmental impact
“What Frugal Products Are and Why They Matter: A Cross-National Multi-Method Study”, Journal of Cleaner Production (accepted for publication).
Sergej von Janda, Sabine Kuester, Monika Schuhmacker & G. Shainesh (2019)
Co-authors are from Mannheim Business School, Germany.
Worldwide, firms are being driven to reduce the environmental impact of their operations, while dealing with challenges such as stagnant markets, increasing consumer cost-sensitivity, and growing demand for simple, high-value products. Frugal products can play a key role in addressing these challenges in markets worldwide and, in particular, in the most demanding market environments in emerging markets.
The demand for frugal products is naturally high in emerging markets where the largest proportion of the population belongs to the resource constrained consumer segment at the so-called bottom of the economic pyramid (BOP), looking for products with particularly attractive price-value ratios.
A widely studied frugal product, which offers such a price-value ratio, is the TATA Swach – the world’s cheapest household water purification system. Many attribute its success to the ‘good-enough’ water purification performance at extremely low cost. Other frugal product examples are the robust and portable d.light solar lantern developed for low-income consumers with no or irregular access to electricity, or the rubber-based leg prosthesis Jaipur Leg, designed as an inexpensive, robust, and simple prosthetic solution for people with below-knee amputations.
However, product frugality remains underexplored from both an academic and managerial perspective. In this multi-method study, the researchers develop a comprehensive conceptualization and operationalization of product frugality using a systematic literature analysis, expert interviews, consumer interviews, and consumer surveys.
Applying established procedures of index construction to a large and diverse set of consumer data from the U.S., the U.K., Germany, India, and South Africa (n = 2,398), the researchers develop and validate an index of product frugality. The results depict product frugality as a formative construct with four dimensions: cost of consumption, sustainability, simplicity, and basic quality. Their findings provide important implications for theory and practice as we generate a common understanding of product frugality that acknowledges the multi-dimensional nature of this construct.
Nomological examination of their index reveals that product frugality increases consumers’ willingness to generate word of mouth. Hence, product frugality can stimulate demand in situations where consumer behavior is influenced by others, e.g., in early stages of market diffusion.
Their research proffers guidance for managers seeking to explore the potential of frugal products in addressing consumers’ need for higher value products while minimizing environmental impact.
Click here for read the article
Recent research proffers guidance for managers seeking to explore the potential of frugal products in addressing consumers’ need for higher value products while minimizing environmental impact
“What Frugal Products Are and Why They Matter: A Cross-National Multi-Method Study”, Journal of Cleaner Production (accepted for publication).
Sergej von Janda, Sabine Kuester, Monika Schuhmacker & G. Shainesh (2019)
Co-authors are from Mannheim Business School, Germany.
Worldwide, firms are being driven to reduce the environmental impact of their operations, while dealing with challenges such as stagnant markets, increasing consumer cost-sensitivity, and growing demand for simple, high-value products. Frugal products can play a key role in addressing these challenges in markets worldwide and, in particular, in the most demanding market environments in emerging markets.
The demand for frugal products is naturally high in emerging markets where the largest proportion of the population belongs to the resource constrained consumer segment at the so-called bottom of the economic pyramid (BOP), looking for products with particularly attractive price-value ratios.
A widely studied frugal product, which offers such a price-value ratio, is the TATA Swach – the world’s cheapest household water purification system. Many attribute its success to the ‘good-enough’ water purification performance at extremely low cost. Other frugal product examples are the robust and portable d.light solar lantern developed for low-income consumers with no or irregular access to electricity, or the rubber-based leg prosthesis Jaipur Leg, designed as an inexpensive, robust, and simple prosthetic solution for people with below-knee amputations.
However, product frugality remains underexplored from both an academic and managerial perspective. In this multi-method study, the researchers develop a comprehensive conceptualization and operationalization of product frugality using a systematic literature analysis, expert interviews, consumer interviews, and consumer surveys.
Applying established procedures of index construction to a large and diverse set of consumer data from the U.S., the U.K., Germany, India, and South Africa (n = 2,398), the researchers develop and validate an index of product frugality. The results depict product frugality as a formative construct with four dimensions: cost of consumption, sustainability, simplicity, and basic quality. Their findings provide important implications for theory and practice as we generate a common understanding of product frugality that acknowledges the multi-dimensional nature of this construct.
Nomological examination of their index reveals that product frugality increases consumers’ willingness to generate word of mouth. Hence, product frugality can stimulate demand in situations where consumer behavior is influenced by others, e.g., in early stages of market diffusion.
Their research proffers guidance for managers seeking to explore the potential of frugal products in addressing consumers’ need for higher value products while minimizing environmental impact.
Click here for read the article