What is frugal innovation?

Abstract

This chapter provides an overview of concepts and frameworks that distinguish frugal innovation from other innovation types. Frugal innovations mainly originated in the context of emerging markets. The main idea was to develop products and services that fit these markets’ special needs and requirements and that were cheap enough to give non-affluent customers opportunities for consumption. Frugal innovation is characterized by a much lower price or significantly lower costs compared to conventional products and services. The specific attributes of frugal innovations strongly depend on the specific context, such as the environment, the specific needs, or the market structure. The frugal innovation research stream is new. Apparently, the literature of frugal innovation has primarily focused on emerging markets. However, frugal innovations are also adapted for developed markets. Researchers should explore how frugal innovations can be successfully developed.

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