Customer-driven Product Development: A Demand Chain Management perspective

Demand chain management is a research area of increasing attention. It is the undertaking of reacting to customer requirements through a responsive chain going from customers through a focal company towards raw material distributors. With faster growing markets and increasing competition, companies look for new ways to gain competitive advantage. In competitive markets there is a tendency of shorter product life cycles, and thus a competitive factor is to keep at pace with the market or even driving the market by developing new products. This research study seeks to investigate Customer-driven Product Development (CDPD) from a demand chain management perspective. CDPD is the counterpart to typical research and development processes, which has no direct customer involvement. The proposition is that letting customers initiate and participate in the product development process will be a competitive factor by enhancing customer value and strengthening ties to customers, which increases loyalty to the company in competitive markets. CDPD is investigated through an explorative research design in a dyadic case study including a global industrial company and its customers. The study provides an insight into a new area of new product development and demand chain management, including the customer in the case study, which is rare in related research.