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December 16, 2015

"Frugal innovation" – the art of making more out of less, when the "less" is already on hand. In a recent study we asked top managers about their companies' experience and success with such goods: While frugal products today stand for 12% of sales of surveyed companies, their share is predicted to almost double to 22% in 2018. Alarming though: Only 45% estimate their company's success with frugal products as high or very high. And as little as 30% are satisfied with profitability of their company's frugal products.

The abovementioned product examples give a taste of the importance and reach of frugal products for both companies originating from developed and emerging markets. Frugal products offer opportunities in new markets specifically to players in the business of Engineered Products and High Tech. Many of these players are based in the United States and are highly successful in selling their feature-rich high-end products in the Western world – but often they are lacking full access to mid-range and low-end segments in emerging markets. These are areas they easily could enter if they offered the right products at the right costs.

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Frugal innovation in the engineered products and high tech industry

Published December 2015. Available in
Portrait of Christian Böhler
Principal
Munich Office, Central Europe
+49 160 744-8017
Portrait of Jonathon Wright
Partner
Boston Office, North America
+1 617 310-6600
Portrait of Oliver Knapp
Senior Partner
Stuttgart Office, Central Europe
+49 711 3275-7213
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