Consumer Integration: Antecedents and Consequences

Continuous development of new products and innovations remain an imperative for companies' long-term success. Future success increasingly depends on a company's ability to acquire external knowledge and to use it for new product development (NPD). Consumers are recognized as the most important source of external knowledge. For firms to tap into this knowledge they need to integrate consumers in NPD. Research in consumer integration (CI) has previously focused on customer integration in B2B. Recently, an empirical base is developing regarding CI in a B2C-context, but so far this research focuses mostly on single industry contexts such as the leisure industry. Further research is needed to fully understand important antecedents and outcomes of CI in consumer goods industries using cross-sectional data. We propose a conceptual model that investigates different potential company-related and process-related antecedents of CI. Based on an extended literature review, we focus on the following antecedents: consumer orientation, competitor orientation as well as interfunctional coordination. On the basis of qualitative interviews with managers from consumer goods industries we also consider additional factors: the dependence on retailers and the incentive system of managers. It is also of interest to investigate how CI impacts new product success. So far, research on CI shows a positive effect on new product success. However, based on the transaction cost theory we propose an inverted U-shaped relationship between CI and new product success. Following recent literature on new product success we measure it as a second-order formative construct. Altogether, we test the hypotheses with data from 205 firms spanning multiple B2C industries. The empirical findings show that a very important antecedent of CI intensity is consumer orientation. Furthermore, the incentive system of managers involved in NPD must depend on the new product success. The more the incentive system is based on new product success, the more are consumers integrated in NPD. In addition, consumers are integrated more intensively the more companies depend on retailers. We find that CI intensity shows an inverted U-shaped effect on new product success.