Frugal Innovation in Product Demand Matrix

High End – products are sold at high prices but to few customers. Example: luxury cars like Rolls Royce.

Golden Goose – products are sold at high prices to a mass market. Example: Apple iPhones

Mass Market – products are sold at low prices to a mass market. Example: Mc Donald’s

Labour of Love – products are sold at low prices to few customers. Examples: all product/services failures

Mass Market is the target market of frugal innovations. Low-price products can be directed to emerging markets, where people have very little disposal budgets and also to advanced economies, where people are more and more cost-conscious customers and appreciate simple, ecological and affordable products.

Watch about how to introduce goods to masse vs niche masses:

Frugal Innovation Mindset vs. Global Trends

The specifics of frugal innovations and its emphasize on human, cost-effectiveness, environment and sustainability, builds more general frugal mindset, which should be associated with the following.

Frugal Innovation Mindset vs. Global Trends

The following trends are also related with frugal innovations:

Why do big companies implement frugal innovation thinking?

If you’re still not convinced that frugal innovation thinking and the above-mentioned trends are essential in nowadays economy, please read why a frugal approach is important for big corporations.

“We will run out of water long before we run out of fuel.”

Peter Brabeck-Letmathe, Nestlé’s chairman [in:] A water warning”, The Economists, Novemebr 19^th 2008

“We don’t want to create separate, dedicated “green” product lines. Rather we invest in innovative technologies like Water<Less and process like Wellthread that can be applied across multiple product lines, making a sustainability a core design principle for all our products.”

Michael Kobori, Levis Strauss’s vice-president of global sustainability [in:] Radjou, N., & Prabhu, J. C. (2014). Frugal innovation: How to do better with less (1st ed.). New York: PublicAffairs.

“Okay we’re expecting six degrees warming, three billion extra consumers on one and a half planet’s resources – this shapes the business landscape. So sustainability has gone from “it would be nice to do” to an absolutely business-critical thing to do.”