Abstract

Frugal innovations are characterized by a focus on the core product functions, high product quality, and the reduction of raw material and financial resources across the entire value chain. They were initially developed for people in emerging countries and focused on the unmet needs of people at the bottom of the pyramid (BOP). Different researches show that frugal innovations could also be interesting for people in industrialized countries. Existing literature indicates that customers in developed countries have different acceptance factors for frugal innovations than customers in emerging countries. The present study refers to this gap. For the first research, potential users of Generation Y from Germany are used. This generation comprised a large consumer group of more than 15 million people. They are characterized by their interest in sustainable products and social fairness. Household appliances such as washing machines, dishwashers, or coffee machines are used as a potential product group for frugal innovation in developed countries like Germany. They have been an integral part of daily life in industrialized countries for many years, but they are expensive and often highly sophisticated with many functions. The basis for the study is the Technology Acceptance Model (TAM) expanded based on the literature. A total of 12 hypotheses were derived and combined into a study model. The subject of the research was Generation Y in Germany. For model testing, a dataset of 463 participants was generated through an online survey from December 2020 to January 2021. A multi-equation structural model was created and evaluated with the variance-based procedure PLS-SEM to analyze the relationships. The results confirmed that even in the case of frugal household appliances, the opinion of third parties influences the usefulness and the purchase intention in Generation Y. Furthermore, there was an influence of environmental awareness on the attitude towards use. Despite the affinity for technological applications, the ease of use of a frugal household appliance was shown to influence the usefulness of frugal household appliances. Contrary to expectations, the performance expectations of household appliances and the possible price advantage did not influence usefulness within this consumer group. This study concluded with indications for future research approaches in this research area.

Keywords: frugal innovation, technology acceptance model (TAM), household appliances, generation Y, purchase intention.

JEL Classification: D11, D14, O32, Q01, Q56.

Cite as: Schneider, S. (2021). Purchase intention of frugal household appliances among generation y in Germany – modified tam approach. Marketing and Management of Innovations, 2, 303-313. https://doi.org/10.21272/mmi.2021.2-25

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior and Human Decision Processes, 50, 179–211. [Google Scholar] [CrossRef]
2. Ajzen, I., & Fishbein, M. (1980): Understanding Attitudes and Predicting Social Behavior. Englewood Cliffs. New Jersey. Pearson Verlag, 1980. [Google Scholar]
3. Alonso, M. A. S., Paquin, J. P., & Mangin, J. P. L. (2002). Modelling perceived quality in fruit products: their extrinsic and intrinsic attributes. Journal of Food Products Marketing, 8(1), 29-48.[Google Scholar] [CrossRef]
4. Bagozzi, R. P., & Yi, Y. (1988). On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16(1), 74–94. [Google Scholar] [CrossRef]
5. Bolton, R. N., Parasuraman, A., Hoefnagels, A., Migchels, N., Kabadayi, S., Gruber, T., Loureiro, Y. K., & Solnet, D. (2013). Understanding Generation Y and their use of social media: a review and research agenda. Journal of service management, 24(3), 245-267. [Google Scholar] [CrossRef]
6. Boßow-Thies, S., & Albers, S. (2010). Application of PLS in marketing: content strategies on the internet. In Handbook of Partial Least Squares (pp. 589-604). Springer, Berlin, Heidelberg.[Google Scholar] [CrossRef]
7. Bound, K., & Thornton, I. (2012). Our frugal future: Lessons learned from India’s innovation system. Nesta. Retrieved September 3, 2018, [Google Scholar]
8. Brem, A., & Ivens, B. (2013). Do Frugal and Reverse Innovation Foster Sustainability? Introduction of a Conceptual Framework. Journal of Technology Management for Growing Economies, 4(2), 31-50. [Google Scholar] [CrossRef]
9. Butler, S.M., & Francis, S. (1997). The effects of environmental attitudes on apparel purchasing behavior. Clothing and Textiles Research Journal, 15, 76–85. [Google Scholar] [CrossRef]
10. Chen, S. C., & Hung, C. W. (2016). Elucidating the factors influencing the acceptance of green products: An extension of theory of planned behavior. Technological Forecasting and Social Change, 112, 155-163. [Google Scholar] [CrossRef]
11. Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern methods for business research, 295(2), 295-336. [Google Scholar]
12. Davis, F. D. (1989). Perceived Usefulness, Perceived Ease of Use and User Acceptance of Information Technology. MIS Quarterly, 13(3), 319-340. [Google Scholar] [CrossRef]
13. Federal Statistical Office (2020). Mit über 16 Millionen stellt die Gen X die größte Gruppe dar. Gen Z, Millennials und Generation X – Ein Überblick. Retrieved from [Link]
14. Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of marketing research, 18(3), 382-388. [Google Scholar] [CrossRef]
15. Franke, G., & Sarstedt, M. (2019). Heuristics versus statistics in discriminant validity testing: a comparison of four procedures. Internet Research, 29(3), 430–447. [Google Scholar] [CrossRef]
16. Garvin D. A. (1987). Competing on the eight dimensions of quality. Harvard Business Review, 65, 101-109. [Google Scholar]
17. Goldsmith, S. R. E. & Newell, J. (1997). Innovativeness and Price Sensitivity: Managerial, Theoretical and Methodological Issues. Journal of Product and Brand Management, 6(3), 163-173. [Google Scholar] [CrossRef]
18. Gupta, B., Dasgupta, S., & Gupta, A. (2008). Adoption of ICT in a government organization in a developing country: An empirical study. The Journal of Strategic Information Systems, 17(2), 140-154. [Google Scholar] [CrossRef]
19. Hair, J. F., Hult, G. T.M., Ringle, C. M., & Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM), 2nd edition., Sage Publications, Inc. [Google Scholar]
20. Hazen, B. T., Boone, C. A., Wang, Y., & Khor, K. S. (2017). Perceived quality remanufactured products: construct and measure development. Journal of Cleaner Production, 142, 716-726. [Google Scholar] [CrossRef]
21. Holden, R. J., & Karsh, B. (2010). The technology acceptance model: its past and its future in health care. Journal of Biomedical Informatics, 43 (1), 159-172. [Google Scholar] [CrossRef]
22. Holm, L., & Kildevang, H. (1996). Consumers’ views on food quality. A qualitative interview study. Appetite, 27(1), 1-14. [Google Scholar] [CrossRef]
23. Kahn, M. E. (2007). Do greens drive Hummers or hybrids? Environmental ideology as a determinant of consumer choice. Journal of Environmental Economics and Management, 54(2), 129-145. [Google Scholar] [CrossRef]
24. Kang, J., Liu, C., & Kim, S. H. (2013). Environmentally sustainable textile and apparel consumption: The role of consumer knowledge, perceived consumer effectiveness and perceived personal relevance. International Journal of Consumer Studies, 37(4), 442–452. [Google Scholar] [CrossRef]
25. Karavasilis G., Nerantzaki D., Pantelidis, P., Paschaloudis, D., & Vrana V. (2015). What generation y in Greece thinks about green hotels. World Journal of Entrepreneurship, Management and Sustainable Development, 11(4), 268-280. [Google Scholar] [CrossRef]
26. Kenyon, G., & Sen, K. (2012). A model for assessing consumer perceptions of quality. International Journal of Quality and Services Sciences, 4, 175-188. [Google Scholar] [CrossRef]
27. Kianpour, K., Jusoh, A., & Asghari, M. (2014). Environmentally friendly as a new dimension of product quality. International Journal of Quality & Reliability Management, 31(5), 547–565. [Google Scholar] [CrossRef]
28. Kim, E., & Tadisina, S. (2007). A model of customers’ trust in e-businesses: Micro-level inter-party trust formation. The Journal of Computer Information Systems, 48(1), 88–104. [Google Scholar] [CrossRef]
29. Kim, J. B. (2012). An empirical study on consumer first purchase intention in online shopping: Integrating initial trust and TAM. Electronic Commerce Research, 12(2), 125–150. [Google Scholar] [CrossRef]
30. Kroll, H., Gabriel, M., Braun, A., Muller, E., Neuhäusler, P., Schnabl, E., & Zenker, A. (Eds.). (2016). A conceptual analysis of foundations, trends and relevant potentials in the field of frugal innovation (for Europe): Interim report for the project «study on frugal innovation and reengineering of traditional techniques». Publications Office. [Google Scholar] [CrossRef]
31. Leiner, D. J. (2013). Too fast, too straight, too weird: Post hoc identification of meaningless data in internet surveys. Survey Research Methods, 13(3), 229-248. [Google Scholar] [CrossRef]
32. Liang, S. W. J. J., Ekinci, Y., Occhiocupo, N., & Whyatt, G. (2013). Antecedents of travellers’ electronic word-of-mouth communication. Journal of Marketing Management, 29(5–6), 584–606. [Google Scholar] [CrossRef]
33. Lu, D., Lai, I., & Liu, Y. (2019). The Consumer Acceptance of Smart Product-Service Systems in Sharing Economy: The Effects of Perceived Interactivity and Particularity. Sustainability, 11(3), 928. [Google Scholar] [CrossRef]
34. Mann, A., & Prein, J. (2008). Akzeptanz mobiler Kundenkarten. In Erfolgsfaktoren des Mobile Marketing (pp. 241-259). Springer, Berlin, Heidelberg. [Google Scholar] [CrossRef]
35. Manning, M. (2009). The effects of subjective norms on behaviour in the theory of planned behaviour: A meta-analysis. British Journal of Social Psychology, 48(4), 649–705. [Google Scholar][CrossRef]
36. McKnight, D. H., Choudhury, V., & Kacmar, C. (2002). The impact of initial consumer trust on intentions to transact with a web site: A trust building model. Journal of Strategic Information Systems, 11(3/4), 297–323. [Google Scholar] [CrossRef]
37. McKnight, D. H., Cummings, L. L., & Chervany, N. L. (1998). Initial trust formation in new organizational relationships. The Academy of Management Review, 23(3), 473–490. [Google Scholar][CrossRef]
38. Ohlwein, M. (2013). Märkte für gebrauchte Güter. Springer-Verlag. [Google Scholar] [CrossRef]
39. Prein, J. (2011). Akzeptanz mobiler Kundenkartenprogramme bei Konsumenten. Springer Verlag. [Google Scholar] [CrossRef]
40. Rakhmawati, T., Sumaedi, S., Astrini, N. J., Bakti, I. G. M. Y., Yarmen, M., & Damayanti, S. (2020). The important level of washing machine quality dimensions in 4.0 industrial era based on the perception of a laundry business: A preliminary investigation. In IOP Conference Series: Materials Science and Engineering (Vol. 722, No. 1, p. 012048). IOP Publishing. [Google Scholar][CrossRef]
41. Roberts, J. A. (1996). Green consumers in the 1990s: profile and implications for advertising. Journal of Business Research, 36, 217–231. [Google Scholar] [CrossRef]
42. Schuitema, G., Anable, J., Skippon, S., & Kinnear, N. (2013). The role of instrumental, hedonic and symbolic attributes in the intention to adopt electric vehicles. Transportation Research Part A: Policy and Practice, 48, 39-49. [Google Scholar] [CrossRef]
43. Statista. (2021). Haushaltsgeräte Report 2020. Retrieved from [Link]
44. Statista. (n.d.). Household Appliances – Germany | Statista Market Forecast. Retrieved from [Link]
45. Stragier, J., Hauttekeete, L., & De Marez, L. (2010, September). Introducing Smart grids in residential contexts: Consumers’ perception of smart household appliances. In 2010 Ieee conference on innovative technologies for an efficient and reliable electricity supply (pp. 135-142). IEEE. [Google Scholar] [CrossRef]
46. Sweeney, J. C., & Soutar, G. N. (2001). Consumer Perceived Value: The Development of a Multiple Item Scale. Journal of Retailing, 77(2), 203-220. [Google Scholar] [CrossRef]
47. Tan, F. B., & Sutherland, P. (2004). Online Consumer Trust : A Multi-Dimensional Model. Journal of Electronic Commerce in Organizations, 2(3), 40–58. [Google Scholar] [CrossRef]
48. Tiwari, R., & Herstatt, C. (2013). «Too good» to succeed? Why not just try «good enough»! Some deliberations on the prospects of frugal innovations. Working paper No. 76, Hamburg, Institute for Technology and Innovation Management, Hamburg University of Technology. [Google Scholar] [CrossRef]
49. Tiwari, R., Fischer, L., & Kalogerakis, K. (2017). Frugal innovation: an assessment of scholarly discourse, trends and potential societal implications. In Lead Market India (pp. 13-35). Springer, Cham. [Google Scholar] [CrossRef]
50. Tiwari, R., Fischer, L., & Kalogerakis, K. (2017). Frugal innovation in Germany: A qualitative analysis of potential socio-economic impacts (No. 96). Working paper. [Google Scholar]
51. Valls, J. F., Sureda, J., & Andrade, M. J. (2012). Consumers and increasing price sensibility. Innovative Marketing, 8(1), 52–63. [Google Scholar]
52. Venkatesh, V., & Davis, F. D. (2000). A Theoretical Extension of the Technology Acceptance Model – Four Longitudinal Fiel Studies. Management Science, 46(2), 86-204. [Google Scholar][CrossRef]
53. Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425–478. [Google Scholar] [CrossRef]
54. Venkatesh, V., Walton, S. M., Thong, J. Y. L., & Xu, X. (2012). Consumer acceptance and use of information technology: extending the unified theory of acceptance and use of technology. MIS Quarterly, 36(1), 157–178. [Google Scholar] [CrossRef]
55. Vermeir, I. & Verbeke, W. (2008). Sustainable food consumption among young adults in Belgium: theory of planned behaviour and the role of confidence and values. Ecological Economics, 64, 542–553. [Google Scholar] [CrossRef]
56. Viswanathan, V., & Jain, V. (2013). A dual-system approach to understanding «generation Y» decision making. Journal of Consumer Marketing, 30(6), 484-492. [Google Scholar] [CrossRef]
57. Walsh, G., Shiu, E., & Hassan, L. M. (2012). Investigating the drivers of consumer intention to buy manufacturer brands. Journal of Product & Brand Management, 21, 328-340. [Google Scholar] [CrossRef]
58. Wang, E. S. T. (2015). Different Effects of Utilitarian and Hedonic Benefits of Retail Food Packaging on Perceived Product Quality and Purchase Intention. Journal of Food Products Marketing, 23(3), 1-13. [Google Scholar] [CrossRef]
59. Wang, Y., Wang, S., Wang, J., Wei, J., & Wang, C. (2020). An empirical study of consumers’ intention to use ride-sharing services: using an extended technology acceptance model. Transportation, 47(1), 397–415. [Google Scholar] [CrossRef]
60. Weiber, R., & Mühlhaus, D. (2014). Strukturgleichungsmodellierung: Eine anwendungsorientierte Einführung in die Kausalanalyse mit Hilfe von AMOS, SmartPLS und SPSS. Springer-Verlag.[Google Scholar] [CrossRef]
61. Xu, Y. (2007). Impact of store environment on adultgeneration Y consumers’ impulse buying. Journal of Shopping Center Research, 14(1), 39-56. [Google Scholar]
62. Yan, L., Xiaojun, F., Li, J., & Dong, X. (2019). Extrinsic cues, perceived quality, and purchase intention for private lables: Evidence from the Chinese market. Asia Pacific Journal of Marketing and Logistics, 31, 714-727. [Google Scholar] [CrossRef]
63. Zeschky, M., Widenmayer, B., & Gassmann, O. (2011). Frugal Innovations in Emerging Markets. Research Technology Management, 54(4), 38-45. [Google Scholar] [CrossRef]