Customer Participation in New Product Development: The Crucial Role of a Firm’s Absorptive Capacity: An Abstract

Our specific focus in this paper is on customer participation in the NPD process (i.e., customer involvement as co-developers). Within this collaborative NPD process, customers are engaged in idea generation, selecting various attributes of a new product offering and acting as co-developers of new products and services (Fang 2008). Our research contends that customer participation’s effectiveness in regard to new product performance and commercializing innovative new products is dependent on the level of absorptive capacity (ACAP) of the firm. ACAP is a dynamic capability that can help utilize the firm’s knowledge structure to acquire, transform, assimilate, and exploit external knowledge and apply it to commercial means (Zahra and George 2002). Substantively, we suggest that without a high level of ACAP, customer participation in NPD is rendered wholly ineffective in regard to the innovativeness and performance of new products.