Frugality Can Be Central to Product Success: A View of Frugal Innovation, Perceived Value, and Purchase Intention

Abstract The current research focuses on a new form of sustainable innovation that can help organizations to create a seller/buyer dyad for new relationships that will help to increase sales revenue. In addition, this research places frugal innovation at the forefront of how potential business-to-business (B2B) buyers perceive the value of products and in turn will increase the intent of these buyers to purchase these products. Furthermore, this research studies how the creation of a frugal ecosystem throughout the B2B supply chain may lead to an increase of the perceived value of products for buyers. This study employs a branch of Equity Theory called The Perceived-Value Pricing Model along with Product-quality Cue Theory that tells us that extrinsic and intrinsic cues from a product through these sustainable innovation means can lead to changes in the perceived value of products and subsequently, the purchase intention from the customer. The major contribution of this study is moving the B2B conversation on sustainability forward by promoting novel discourse on how frugal innovation principles including matching core functionalities to customer specification and reduction of cost to the customer can play a significant role in the unique and innovative context of B2B sales.