Developing customer involvement in innovation and product development: Case study on a manufacturing company

Abstract

The role of customers has changed significantly during the recent decades, and as the recent advancements in information and communication technologies have made the customers more informed and the competition in the markets increases, companies can achieve new product success and operational excellence through customer involvement. In this study, the focus is on customer involvement in the innovation process, including the different ways the customers provide input to the development of new products, services, and technologies. The different ways in which the customers and customer input can and should be collected and utilized in the process vary depending on both the company and the development objectives. As the conditions and possible challenges are company-specific and the literature doesn’t present out-of-the-box solutions for the customer involvement, this study aims to provide guidelines for developing the customer involvement in the case company. This thesis had three main objectives. The first objective was to describe on a more general level the factors affecting customer involvement in the innovation process as well as the value creation in the involvement. Next, the focus moved onto the case company, as the second objective was to assess the current state of customer involvement in the company. These two objectives support the third and key objective of this study, which was to identify the key areas requiring development and to form initial proposals to help the case company involve its customers in a value creating way. To achieve the objectives, previous research on the topic was first reviewed to form an understanding about customer involvement and innovations on a general level. After the literature review, the empirical material was gathered through semi-structured interviews with eight employees of the case company. The interviewees were selected from varying positions inside the company to gain a comprehensive view on the topic. The material was then thematically analyzed and reflected based on the previous literature. As a result, it was found that customer involvement is affected by multiple forces that can either drive or restrict the involvement, making it important to take these into account when developing the customer involvement. A profound image of the current state of the case company was also formed, and the different expectations and objectives as well as challenges were identified. The customer involvement was seen to create value for both the customer and the company through various mechanisms, which present different requirements for the involvement. While developing solutions that fit the customer needs was among the most important benefits of the customer involvement, other benefits were widely recognized as well. The challenges on the other hand were related to the general challenges of the customer involvement, but also internal challenges on both the company’s and its customers’ end. The most significant need for development in the case company concerned the processes and practices for customer involvement, communication, and resources, which can be seen to result from the lack of organizational and strategic support. Thus, the development of the customer involvement should be addressed from top-down with an objective to form approaches and practices to utilize with different innovation and development needs. The findings show that customer involvement in the innovation process is a wide but important topic that is affected by multiple factors and that there is no universal or unambiguous way to implement it. However, this thesis opens some of the most central aspects of the topic and provides starting points for the development of value creating customer involvement.