The digital marketing capabilities gap

Over the past two decades, digitalization has revolutionized not only consumer marketing but also industrial marketing. Both industrial marketing scholars and industrial marketers seek insights to understand how our knowledge and practice of digital marketing has been structured and configured. To address this gap, we adopt the resource-based perspective as an organizing framework and systematically review 129 articles spanning two decades of research to identify different digital marketing capabilities in industrial firms. From this analysis, we identify four themes: channels, social media, digital relationships, and digital technologies. We then stress-test this knowledge with managerial practices by conducting an online survey of 169 managers, designed to establish the repertoire of current and future marketing capability needs of industrial firms. Herein, we identify two marketing capabilities gaps: the practice gap—which identifies the deficit between managers' ‘current’ practices and their ‘ideal’ digital marketing capabilities; and, the knowledge gap—which demonstrates a significant divide between the digital marketing transformations in industrial firms and the extant scholarly knowledge that underpins this. Based on these results, we build an agenda for future research on digital marketing capabilities.     

Launch Decisions and New Product Success: An Empirical Comparison of Consumer and Industrial Products

Many articles have investigated new product development success and failure. However, most of them have used the vantage point of characteristics of the product and development process in this research. In this article we extend this extensive stream of research, looking at factors affecting success; however, we look at the product in the context of the launch support program. We empirically answer the question of whether successful launch decisions differ for consumer and industrial products and identify how they differ. From data collected on over 1,000 product introductions, we first contrast consumer product launches with industrial product launches to identify key differences and similarities in launch decisions between market types. For consumer products, strategic launch decisions appear more defensive in nature, as they focus on defending current market positions. Industrial product strategic launch decisions seem more offensive, using technology and innovation to push the firm to operate outside their current realm of operations and move into new markets. The tactical marketing mix launch decisions (product, place, promotion and price) also differ markedly across the products launched for the two market types. Successful products were contrasted with failed products to identify those launch decisions that discriminate between both outcomes. Here the differences are more of degree rather than principle. Some launch decisions were associated with success for consumer and industrial products alike. Launch successes are more likely to be broader assortments of more innovative product improvements that are advertised with print advertising, independent of market. Other launch decisions uniquely related to success per product type, especially at the marketing mix level (pricing, distribution, and promotion in particular). The launch decisions most frequently made by firms are not well aligned with factors associated with higher success. Additionally, comparing the decisions associated with success to the recommendations for launches from the normative literature suggests that a number of conventional heuristics about how to launch products of each type will actually lead to failure rather than success.     

Signaling Quality: An Examination of the Effects of Marketing‐ and Nonmarketing‐Controlled Signals on Perceptions of Automotive Brand Quality

When introducing new products to market, firms often leverage marketing signals in an effort to increase perceptions of product quality. While prior research mostly focuses on marketing‐controlled signals that firms can directly influence to affect consumer perceptions of product quality, the proliferation of nonmarketing‐controlled signals in the form of third‐party product reviews introduces a new layer of complexity to a consumer's inference process. Given the fact that propagation of marketing signals and third‐party reviews has made the marketplace more interactive, it is no longer diagnostic to analyze the impact of various quality signals on consumer perceptions, separately. The purpose of this study is twofold. There has been extant research on the individual effects of marketing‐controlled signals on quality perception, but research providing a simultaneous examination of multiple signals is scarce. The first purpose is to examine interaction effects between various marketing signals on consumer perceptions of quality. Firms may be able to control the communication strategy of internal signals (e.g., price, advertising), but third‐party signals are external to the firm, and hence are often perceived as being more credible and less biased than marketing signals. Despite the popularity of third‐party product reviews, there is scarce empirical research about how they impact perceptions in the presence of marketing‐controlled quality signals. Thus, the second purpose is to examine the interaction effects between marketing signals and independent third‐party reviews on perceived product quality. This study advances existing models of market signaling to account for the potential interactions between various types of quality signals. Hypotheses are tested using a longitudinal data set comprising all car brands that have existed in the U.S. automotive industry between 1990 and 2007. The automotive industry provides an ideal context for the analyses as quality is an indispensable yet not easily discernible attribute of cars. Furthermore, consumer perceptions of the quality of new vehicle introductions can have a profound effect on product performance. Data are compiled from various secondary sources, including Harris Interactive's Equitrend, Consumer Reports, and TNS Media Intelligence, among others. Econometric techniques are used to estimate the empirical model. Findings show that effects of quality signals are codependent such that third‐party quality ratings reduce the effectiveness of pricing and advertising, whereas they enhance the credibility of warranty signal. Furthermore, warranty positively interacts with price and advertising. It is also demonstrated that car sales in the previous period and the country of origin of the car brand significantly impact perceived quality. Overall, the research findings can help car manufacturers better understand how their initial product configurations and marketing strategies impact the perception of new vehicle introductions.     

Marketing communication strategies in support of product launch: An empirical study of Taiwanese high-tech firms

To understand the mechanisms that underlie marketing communication support for product launches, the authors conduct an empirical study and propose a conceptual framework that depicts the relationships between informational/transformational or elaborational/relational messages and their effectiveness. The hypothesized message-communication and message-sales effect links are moderated by three communication process characteristics: message clarity, message uniformity, and integration of the communication. On the basis of data collected from an industrial survey of 101 high-tech firms in Taiwan, the authors find that informational and relational messages offer greater support for new products. Whereas message clarity and integration of communication expectedly demonstrate positive moderating effects on message-performance links, message uniformity only affects messages-sales effect relationships. The authors explore research insights and discuss implications for both academia and practitioners from the perspectives of new product management and integrated marketing communications.     

A multilevel investigation of factors influencing creativity in NPD teams

Understanding creativity in the context of a new product development (NPD) team is of paramount importance, especially in the high-technology industry where creativity is a key resource. Building on the mood-as-input model, this study examines how contextual factors (organizational support and organizational control) moderate the relationship between team affective tone and team creativity. The data collected comprise 343 sets of responses involving 106 NPD teams drawn from high-technology firms. The results of this study show that negative affective tone relates positively to team creativity when organizational support is high and organizational control is low, but the linkage between positive affective tone and team creativity as moderated by context factors is found to be insignificant. This article likewise includes research limitations, future research directions, and theoretical and managerial implications.     

On the relation between multimarket contact and service quality: Mutual forbearance or network coordination?

Research summary : We reconsider the relationship between multimarket contact and product quality in the airline industry by arguing that multimarket contact has both a negative mutual forbearance effect on quality and a positive network coordination effect on quality. Multimarket contact increases the frequency of contact between firms, and this anticipated future interaction promotes cooperation. In network industries, especially small firms may want to cooperate in order to increase the attractiveness of the composite product. By using size as a moderating variable, we indeed find a consistent positive effect of multimarket contact on product quality for small airlines. We show that this effect can be attributed to network coordination and that this effect generally dominates the negative mutual forbearance effect in a recent period. Managerial summary : Firms with sales in multiple geographical markets likely encounter each other with mutual respect (i.e., live and let live) because aggressive behavior in one market may lead to retaliatory responses in other markets. Such responses weaken competitive pressures on price and quality. Insofar these firms sell complementary products, they may however also coordinate and improve their joint product offering, resulting in better quality for the consumer. This paper shows that this positive effect of cooperation may dominate the negative competition‐reducing effect, depending on the size distribution of firms. The reason is that small or nondominant firms have a stronger incentive to produce compatible products than large or dominant firms with already a strong position in the (global) market. Copyright © 2015 John Wiley & Sons, Ltd.     

New Product Development Practices of Industrial Marketers*

William L. Moore personally interviewed a number of senior managers employed in 25 large industrial marketing companies about new product development practices. These managers are familiar with all phases of the development of typical new products, from the time ideas are generated until market introduction. Most respondents were either division heads or those directly responsible for a division's new product development program. In agreement with a previous study, the use of formal new product strategies and sophisticated quantitative marketing research techniques was found to be lacking in most companies. However, many other elements of the new product development process were carried out more completely than previously reported. For example, respondents reflected sensitivity to informal understanding of new product strategies. A number of the less sophisticated, small scale qualitative research methods actually used may be more appropriate than more sophisticated methods. While several research areas are suggested, the general assessment of the new product practices of these firms is more positive than that of Feldman and Page.     

Buyer animosity in business to business markets: Evidence from the French nuclear tests

Academic studies of buyer reaction to unpopular political events in the country of origin of products have focused on consumer markets. This paper aims to extend Klein, Ettenson and Morris' [Klein, J., Ettenson, R., & Morris, M. (1998). The animosity model of foreign product purchase: An empirical test in the People's Republic of China. Journal of Marketing, 62(1), 89-101] concept of consumer animosity to industrial markets by comparing industrial and consumer buyer reaction to the nuclear tests conducted by France in the Pacific in the mid-1990s. It investigates whether firms in the B2B sector were affected more than those in B2C markets, whether entry mode was significant, and examines the way in which firms in the two market sectors responded. The results show that buyer animosity was less pronounced in industrial than in consumer markets. They also show that entry mode can influence the experience of animosity.     

Industrial product positioning: Progmatic uses

With increased competition and sophistication in the industrial sector, a better understanding of buyer behavior and attitudes is necessary to minimize “marketing myopia” and maximize marketing productivity. Numerous techniques are emerging to facilitate greater understanding of the buyer. A group of these techniques, known as product positioning, are likely to be especially useful in developing effective marketing programs [8]. Product positioning has achieved substantial acceptance by consumer marketing firms but far less use by industrial firms [9]. An approach to product positioning which is useful in both industrial and consumer marketing is developed here.     

Value innovation,deliberate learning mechanisms and information from supply chain partners

Although marketing scholars have emphasized both the importance of internal learning mechanisms and of external learning through supply chain partners research findings on how these factors influence each other are merely lacking. Analyzing survey data of 182 industrial firms, we examine how information provision by upstream and downstream supply chain parties moderates the effect of internal deliberate learning mechanisms on value innovation ability. Results of the PLS analysis suggest that internal learning mechanisms and external information exchange do not always work symbiotically. Our findings provide interesting results for (the management of) innovation processes and supply chain relations.     

An exploratory Investigation of new product forecasting practices

To guide new product forecasting efforts, the following study offers preliminary data on new product forecasting practices during the commercialization stage (prelaunch and launch stage). Data on department responsibility for and involvement in the new product forecasting process, technique usage, forecast accuracy, and forecast time horizon across different types of new products are reported. Comparisons of new product forecasting practices for consumer firms versus industrial firms are also reported.
Overall, study results show that the marketing department is predominantly responsible for the new product forecasting effort, there is a preference to employ judgmental forecasting techniques, forecast accuracy is 58% on average across the different types of new products, and two to four forecasting techniques are typically employed during the new product forecasting effort. Compared to consumer firms, industrial firms appear to have longer forecast time horizons and rely more on the sales force for new product forecasting. Additional analyses show that there does not appear to be a general relationship between a particular department's involvement and higher forecast accuracy or greater satisfaction, nor does it appear that use of a particular technique relates to higher forecast accuracy and greater satisfaction. Countering previous research findings, the number of forecasting techniques employed also does not appear to correlate to higher forecasting accuracy or greater satisfaction. Managerial and research implications are discussed.     

How firms learn in NPD networks: The 4S model

This paper examines how firms learn in new product development (NPD) networks. While existing research in business and industrial marketing has significantly advanced our understanding of learning within single firms and in dyadic relationships, our knowledge of inter-firm learning across direct and indirect business relationships in NPD networks remains limited. We address this limitation by conducting multiple case study research to develop a more holistic understanding of learning in NPD networks that is captured in the proposed 4S model. Drawing on an integrated theoretical perspective and the empirical results of three case studies, we propose that firms engage in iterative cycles of syndicated, situated, selected and synergised modes of learning in NPD networks.     

Marketing capabilities: Antecedents and implications for B2B SME performance

The study provides a new perspective on SME marketing strategies in the B2B context. Using a resource-based view of the firm, the study develops a structural model linking marketing capabilities and marketing performance. A study of 367 SME Australian firms reveals that two key marketing capabilities, namely branding and innovation, have major performance outcomes in the SME B2B context. This is the first SME study to evaluate concurrently the contribution of innovation and branding marketing capabilities, with innovation capability the strongest determinant of SME performance. The study also finds market orientation and management capability act as enabling mechanisms for building marketing capabilities. Disaggregation tests indicate that the same findings apply to three size categories denoting micro firms (less than 20 staff), small firms (20-99 staff) and medium-sized firms (100-499 staff).     

A Causal Model of the Impact of Skills, Synergy, and Design Sensitivity on New Product Performance

Notwithstanding the best efforts of outstanding managers, project team members, researchers, and consultants, no product development plan can guarantee success. Every new products organization will experience its fair share of failures, but a firm can take steps to ensure that its failures do not outweigh its successes. By benchmarking the competition, a firm can gain insight into best practices–the factors that lead most directly to new product success. To help identify these best practices, X. Michael Song, William E. Souder, and Barbara Dyer develop and test a causal model of the relationships among the key variables leading to new product performance. The proposed model identifies five factors that lead to marketing and technical proficiency: process skills, project management skills, alignment of skills with needs, team skills, and design sensitivity. According to the model, marketing and technical proficiency directly determine product quality, and ultimately lead to new product success or failure. The causal model was tested using information on 65 completed projects–34 successes and 31 failures–from 17 large, multi-divisional Japanese firms. The study participants develop, manufacture, and market high-technology consumer and industrial products. These firms judged the success or failure of the projects in this study by using seven criteria: return on investment, profit, market share, sales, opportunities for technical leadership, market dominance, and customer satisfaction. These firms generally assigned the greatest importance to customer satisfaction, opportunity creation, and long-term growth. For the most part, the responses from these firms support the relationships presented in the causal model. According to the respondents, marketing proficiency and product quality have a strong, positive influence on their new product performance, as do process skills, project management skills, and alignment of skills and needs. The responses highlight the importance to these firms of responsiveness to customer wants and needs, as well as ensuring a close fit between project needs and the firm's skills in marketing, R&D, engineering, and manufacturing. Somewhat surprisingly, the responses do not support the model's suggested relationships between skills/needs alignment and technical proficiency or between technical proficiency and product quality.     

What Separates Japanese New Product Winners from Losers

Operating in the upper echelons of highly competitive, global markets, numerous Japanese firms enjoy well-deserved reputations for excellence in new product development. Despite this success, however, almost no research has been conducted to explore the keys to successful new product development in Japanese companies. For the most part, research in this area has focused on North American and European firms. X. Michael Song and Mark E. Parry address this gap with a study of 404 Japanese firms and 788 new product introductions. Their research explores the links between new product success and 10 factors: product advantage; marketing synergy; technological synergy; market potential; market competitiveness; market and technical understanding; senior management support; proficiency in the predevelopment planning process and in concept development and evaluation; proficiency in market research, market pretesting, and market launch; and technical proficiency. To avoid any cultural bias, development of the survey was preceded by in-depth case studies and focus group interviews with Japanese and American new product development teams. Although time-consuming and expensive, these preliminary steps were necessary for ensuring the validity of the survey contents and procedures. Notwithstanding the obvious cultural differences, the findings from this study suggest that Japanese new products professionals view the keys to success in much the same way as their North American counterparts. For the survey respondents, the most important success factor is product advantage. Other important success factors include predevelopment proficiency (that is, proficiency in the predevelopment planning process as well as in concept definition and evaluation) and marketing and technological synergy. Consistent with previous research on North American firms, market competitiveness was found to be the least important success factor. For managers who are trying to predict whether a project will result in a product advantage, several survey items may be useful as a checklist for assessing potential product advantage. In particular, these managers should consider whether the product offers potential for reducing consumer costs and expanding consumer capabilities, as well as the likelihood that the product offers improved quality, superior technical performance, and a superior benefit-to-cost ratio.     

Organizational antecedents of environmental responsiveness in industrial new product development

The greening of new product development process has been under scrutiny by researchers, but the attention has been limited to consumer products. Based on a survey, this paper investigates the environmental responsiveness in industrial new product development in 82 industrial firms. In comparison to traditional NPD process in the extant literature, the findings revealed additional activities in the greening of industrial NPD. These activities fall under the broader scope of life cycle assessment (LCA) for environmental impact including supplier evaluation and design for environment issues. The paper also investigates the relative impact of organizational antecedents on greening of industrial NPD activities. Organizational antecedents include functional interface of environmental specialists with design and product managers, environmental product policy, and top management support.     

Global marketing of industrial products: Are interpersonal relationships always critical?

The present paper examines the issue of whether interpersonal relationships are critical for global marketing of industrial products. The fields of relationship marketing, IMP group research, sales research, and network theory have stressed the importance of interpersonal relationships in the business-to-business or industrial marketing context. In contrast to this emphasis on interpersonal relationships, we argue that industrial firms can both conceive and enhance marketing strategies based on developing high quality and consistent processes, products, services or outcomes (consistent processes and outcomes). Such strategies are especially important given the fact that developing interpersonal relationships is expensive due to their reliance on frequent and/or face-to-face communications. In this paper, we examine industry and country contexts that lead to the choice of alternative industrial product marketing strategies and highlight some future research directions and managerial implications.     

The Roles of Marketing and Industrial Design in Discontinuous New Product Development*

Radical or “discontinuous” products based on new technological breakthroughs are playing an ever‐increasing role in the success of firms. However, little research has been conducted that investigates the roles of marketing and industrial design (ID) in the development of these types of products. Further, past research has tended to overlook the role that industrial design, and the impact of the marketing‐industrial design interaction, can have on the development of discontinuous new products. Frequently, the term design is used broadly or is equated with engineering; thus, while the marketing–research and development (R&D) interaction is studied, the marketing–ID as well as the industrial design–R&D relationships are not considered. This article examines the roles of marketing and industrial design in the product development process for discontinuous innovations. Specifically, questions concerning how and the degree to which marketing and industrial design are integrated into the development process are investigated. The investigation employs multiple methods, or triangulation, in order to secure an in‐depth understanding of the roles of these disciplines. In the course of examining these questions, key factors influencing industrial design and marketing involvement are identified and preliminary models are examined. The research, which was conducted in two phases, employed a mixed‐method, multiple sample design. The methods used included a survey, field observation study, and depth‐interviewing. Data were collected from three different samples: R&D managers, project team members (including personnel from various disciplines—marketing, R&D, industrial design, engineering, etc.), and industrial design managers. The use of the different data sources and sampling of various groups of managers was employed in order to provide a rich context for investigating the research questions of interest. In addition, a preliminary analysis of factors (e.g., degree of product discontinuity, product innovation objectives, process discontinuity, process formality) identified in the first phase was conducted, and these relationships were explored further in the second phase of the research. Findings across the two phases of this research suggest that the development of discontinuous new products involves a process that is different from more conventional new product development—particularly as it concerns the roles of marketing and industrial design. The high degree of discontinuity inherent in such projects, along with the strong R&D orientation often surrounding them, results in delayed involvement of marketing and ID, as well as altering their roles in the new product development (NPD) process. Factors such as the degree of product discontinuity (DPD), process discontinuity (PCD), and process formality (PF) seemed to exert a differential influence on the involvement of marketing and ID. Although their roles and involvement are altered in discontinuous new product development, this research suggests that marketing and ID roles in this context involve increased challenges with respect to validation of key assumptions and product application directions. Additionally, managers operating in this development context need to explicitly consider the influence of factors such as discontinuity level in undertaking NPD projects with respect to how it affects the execution of industrial design and marketing activities.     

Launch Strategy and New Product Performance: An Empirical Examination in The Netherlands

Although previous research has investigated the concept and contents of new product performance, there is still no consensus about the managerial decisions that constitute a launch strategy and how such decisions impact new product performance. The research objective for the present investigation is to assess the impact of launch strategy and market characteristics on new product performance and to test the stability of this impact across consumer and industrial products. Data were collected on 272 consumer and industrial new products in The Netherlands through a mail questionnaire approach. We based our definition of a launch strategy on an extensive literature review and interviews with managers. Our conceptualization of new product performance represented two dimensions, namely, market acceptance and product performance. The market acceptance dimension reflects the new product's market position and sales levels. The product performance dimension refers to the quality and technical performance level of the new product. This richer specification of the dependent variable provides a better view on which launch decisions impact which dimensions of new product performance. The impact of launch strategy was higher for market acceptance than for product performance, overall and for both consumer and industrial subsamples separately. In line with results from recent studies, overall, market acceptance is influenced by the product's innovativeness, timing of market entry, breadth of assortment, branding, pricing, the objective of increasing market penetration, and competitor reactions. Product performance is influenced by the product's innovativeness, breadth of assortment, and by the objective of using an existing market. Analyzing the consumer and industrial products separately showed that the general picture of launch decisions and their impact on the dependent variables was comparable across the total sample and both subsamples, indicating that heterogeneous samples in new product launch research may not cause major interpretation problems. Second, the analyses revealed that some launch decisions are more important in attaining new product success for consumer products than for industrial products, and vice versa. While these decisions do not lead to contradicting results in the samples, they show that some decisions may be especially relevant for only consumer or industrial products. We discuss research and managerial implications of the results.     

Marketing/R&D Interaction in New Product Development: Implications for New Product Success Rates

A growing body of literature has evolved which deals with the interaction between marketing and R&D in new product development. Much of this research, unfortunately, fails to associate various variables with new product success levels. Thus, it cannot suggest consensus guidelines for marketing's involvement to increase the performance levels of new products in the market place. Richard Hise, Larry O'Neal, A. Parasuraman and James McNeal report results of their analysis of the new product development procedures of 252 large manufacturing companies. The authors conclude that collaborative efforts between marketing and R&D during the actual designing of new products appear to be a key factor in explaining the success levels of new products, that management effort should focus on the design stage of the new product development process rather than on the earlier and later stages and that R&D's contributions cannot be ignored while decisions are made about marketing's role in developing new consumer and industrial products.