Influence of Customer Demand and Green Product Innovation on Firms’ Performance: A Case of Food Processing Firms in Tanzania

Abstract

The study aimed at examining relationship between customer demand and green product innovation to firms’ performance as a way of creating wealth to the business. Lack of clear link between these variables and limited literature in Tanzanian context produced a research gap to study with the following research questions: a) Does customer demand influence green product innovation? b) Does green product innovation stimulate a firm’s performance? Data were collected from 75 manufacturing firms in Dar es Salaam using questionnaire from the CEOs, technical and marketing directors of the selected companies. The collected data were analysed using
descriptive statistics and Chi-square to establish the relationship between the variables of the study. The study findings indicated relationship between customer demand and green product innovation, and between green product innovation as well as firm’s performance. It implies that managers have to study customer preferences and buying behaviours so as to develop flexible
strategies to satisfy their demand. By so doing, managers will be in a position to develop new green products to meet customer needs that are likely to be priced high and ultimately may enhance business revenue that would lead to business performance.