An analysis of new product development processes in frugal innovation

: a study of small and medium enterprises in Pakistan

Abstract

This research aims to understand the frugal new product development processes in small and medium enterprises operating in Pakistan, mainly from the product development managers' perspective. This study is exploratory and provides new knowledge about frugal Innovation, including the inclusion criteria to identify frugal products and the frugal product development process. Frugal innovations have been proposed as a potential approach for serving resource-constrained consumers in emerging and developing markets as well as in the low-growth markets in the Western countries due to their focus on affordability, good (enough) quality, and no extra features. Extant literature, both conceptual and empirical, has paid little attention to the needs of people and their provisions in emerging economies. As a result, how SMEs develop frugal products in emerging markets has not been explored. This research investigated the NPD processes adopted by SMEs when developing frugal products. It also identified the key factors in frugal NPD success and how they are incorporated into the relevant processes. Finally, this research provided insights into how SMEs utilise frugal NPD to create affordable and sufficiently useful products for the local population. This aspect, investigated for the first time in this research, thus positions the frugal Innovation within the more developed NPD literature. This thesis also contributes to the literature on frugal Innovation by exploring the phenomenon in an unexplored context, i.e., Pakistani SMEs.

The thesis is divided into two phases. Phase one presents the identification and confirmation of inclusion criteria for frugal innovation. Deploying a Delphi study, it finalises a set of criteria to identify frugal products and differentiate its products that emerge from other similar innovation processes. This is also one of the thesis's key contributions to address a lack of well-defined and operationalisable inclusion criteria to identify frugal products. That this is the first attempt to use Delphi Technique that has not been used before either in NPD research or research on frugal Innovation meant that it made a methodological contribution. The findings from phase one helped with the second phase of research. Phase two adopted a case study approach involving seven SMEs operating in Pakistan. This cross-section of firms provided a broad snapshot of players that have developed frugal products. Within each of the case firms, specific NPD projects were examined. Data was gathered using qualitative interviews and drawing upon various additional evidence, thus achieving data triangulation. Findings from this study provided insights into the factors affecting the type of product development pursued by different SMEs.

These research findings develop insights into significant practical value to SMEs worldwide, particularly those in emerging countries. It is expected that millions of SMEs in emerging markets could potentially benefit from these.

Several recommendations are made based on the research findings. The research into frugal Innovation is still in its infancy, and this is the first study of frugal NPD. It was not possible to compare the research findings with those of other studies in a meaningful way, especially on NPD.

Date of Award	Jan 2021
Original language	English
Awarding Institution	School of Law
Supervisor	Vijay Vyas (Supervisor) & Zoe Dann (Supervisor)