Solving the problems of new product forecasting

An important consideration in solving the problems of new product forecasting entails distinguishing new product forecasting from the process of forecasting existing products. Particular differences between the two can be identified across the dimensions of data, analytics, forecast, plan, and measurement. For example, new product forecasting features little to no data with which to begin the process, whereas data are available and accessible in forecasting existing products. The minimal data situation requires a qualitative approach that lays out assumptions to provide transparency; in contrast, quantitative techniques are predominantly used when forecasting existing products. Different assumptions help construct a range of new product forecast outcomes on which company contingencies can be planned versus a singular point forecast for an existing product. And the measure of forecast accuracy, which is a common metric in forecasting existing products, must give way to meaningfulness so that the new product forecast is actionable. Recognizing new product forecasting as a cross-functional, company-wide process helps resolve the problems of new product forecasting. While incapable of remedying all problems, a properly understood and organized new product forecasting effort can help the company better prepare, execute, and support a new product launch, affording a greater propensity to achieve new product success.     

Experiential product attributes and preferences for new products: The role of processing fluency

This study shows how experiential product attributes that are part of the design of new products can create compelling consumer experiences. Following processing-fluency theory, when consumers attend to experiential attributes (sensory or affective), they should process them fluently (i.e., spontaneously and with little effort); however, consumers should process functional attributes always deliberately, irrespective of whether or not they attend to them. An experiment testing the fluency hypothesis confirms that the processing of experiential attributes, but not functional attributes, depends on attention focus. When consumers focus their attention on specific experiential features, products with experiential attributes are evaluated more positively. In contrast, the processing of functional attributes does not depend on attention focus. Further confirming the fluency hypothesis, the experiment also shows that presentation duration does not affect the processing of experiential attributes but does affect the processing of functional attributes. The authors discuss how marketers can use experiential product design in market segmentation and innovation.     

Entrepreneurial actions and optimistic overconfidence: The role of motivated reasoning in new product introductions

Optimistic overconfidence (OO), that is, being certain of success only to end up disappointed, represents a potentially catastrophic error. However, few studies have identified which entrepreneurial actions are associated with it. To explore this issue, we examined 55 small companies and found that OO of product success was positively related to introducing products that required more resources and were more pioneering. Furthermore, satisfaction with company performance had a curvilinear (U-shaped) relationship with overconfidence. Both high and low levels of satisfaction were associated with greater OO in product introductions. In addition, the bias was positively correlated with entering hostile environments; that is, environments that are characterized by intense competition that threatens a firm and its introductions. Contrary to expectations, however, OO was negatively associated with environmental dynamism; defined as environments that embody frequent and large changes. The research also compared general knowledge overconfidence to OO, concluding that each represents a distinct bias with distinct effects.     

The influence of business strategy on new product activity: The role of market orientation

In this paper, we propose that business strategy influences new product activity both directly and indirectly via its influence on market orientation. Accordingly, we develop a framework linking firms' relative emphasis on cost leadership, product differentiation and focus strategies to firms' customer and competitor orientation as well as their new product development and introduction activity. We use this framework to develop a simultaneous equations model that is tested on survey data from 175 Dutch firms of varying size and across different industries in the manufacturing sector. The surprising findings are that a greater emphasis on a focus strategy results in a decreased emphasis on customer orientation and that competitor orientation has a negative direct influence on new product activity and an indirect positive effect via customer orientation. We discuss the implications of these findings for theory and practice.     

Managing Service Expectations in Online Markets: A Signaling Theory of E-tailer Pricing and Empirical Tests

Expectations play a significant role in determining customer perceptions and satisfaction. Accordingly, retailers seek to manage customers’ service expectations. However, the tangible signals of service quality that are available to brick-and-mortar retailers (such as location, store appearance, and salespersons’ behavior) may not be available in online markets. Using a signaling model, we obtain conditions when Internet retailers (e-tailers) use price to manage their customers’ service expectations. In contrast to extant theory, we find that it is possible for both low and high service e-tailers to use price in signaling their service levels. Further, we develop an appropriate deductive test of our theory based on price-ending patterns as an artifact of the signaling process. Based on this test, we find evidence that e-tailers indeed manage service expectations using price. Interestingly, we also find preliminary evidence that suggests customers implicitly associate price-ending patterns with a retailer's expected service level. We discuss several other implications of our findings for researchers and managers.     

The role of networking alliances in information acquisition and its implications for new product performance

The premise of Austrian economics on entrepreneurial discovery suggests that mutual knowledge about market participants defines who will acquire potential information about opportunities to bring future products into existence. Building upon this argument, this research investigates the role of networking alliances in information acquisition and its lagged effect on the new product performance of the firm. By using a longitudinal analysis, the study shows that a firm improves its new product performance as it increases the number of repeated partners and its centrality position relative to others in the technology collaboration network.     

Familiarity and competence diversity in new product development teams: Effects on new product performance

When developing new products, most firms use cross-functional teams, but research on the effect of functional diversity on new product performance returns heterogeneous results. We propose a measure of competence diversity that is more comprehensive than the common functional diversity proxy. Empirical findings, based on a survey of 142 product and sales managers, support the improved predictive validity of our scale. We further observe a mediating effect of the instrumental use of information in the competence diversity–new product performance relationship. Finally, we discuss the moderating effect of familiarity among team members on the relationship between competence diversity and the instrumental use of information. All authors contributed equally to this article and are listed in random order.     

Understanding the antecedents of collateral learning in new product alliances

Recognizing that strategic alliances represent an important means for developing knowledge in critical arenas such as new product development, the authors advance the notion of collateral learning that assesses knowledge acquisition internal to a firm in the alliance. To examine its antecedents, the authors build on the behavioral theory of the firm and propose strategic importance and performance vulnerability as the motivational components and organizational similarity and alliance experience as the awareness components advocated in the theory. Results from 133 alliance firms suggest that both the motivational and awareness components are important in influencing collateral learning in new product alliances. Specifically, to develop collateral learning, firms should have extensive alliance experience and an acknowledged stake in their alliance partners. The results also support the theorized U-shaped relationship between organizational similarity of the alliance partners and collateral learning. Thus, collateral learning is facilitated when organizations are either similar or dissimilar, while medium levels of organizational similarity facilitate collateral learning to a relatively lower extent. Although performance vulnerability is found to be associated negatively with collateral learning, extensive alliance experience can attenuate this negative effect.     

High commitment work system,transactive memory system,and new product performance

Although scholars find that the transactive memory systems can improve new product performance, few studies have empirically examined how managers can induce a transactive memory system in new product development teams with a set of systematic management practices. Based on the theoretical argument about human resource system in the strategic human resource management literature, this study proposes that implementing a set of coherent human resource management practices with workers in new product development teams can induce a transactive memory system in the team. Following previous scholars, this study calls this set of coherent human resource management practices as the high commitment work system. With survey data collected from 336 new product development engineers of 73 new product development teams in 73 firms, this study finds that transactive memory system mediates the positive relationship between the high commitment work system implemented with workers in new product development teams and new product performance.     

Schadenfreude and product failures: the role of product deservingness and product status

ABSTRACT

This article examines the influence of product considerations on the experience of schadenfreude – taking pleasure in the suffering of another consumer. We examine how schadenfreude is affected by the extent to which the person suffering a product failure deserves to own the product and the status of the failed product. This work also explicitly considers how these factors interact with those of the person observing the misfortune. These ideas are tested across three experiments. The results show that high product status increases schadenfreude via its exacerbating effects on envy and that a lack of perceived product deservingness increases schadenfreude via both envy and deservingness. These effects differ based on the corresponding factors of the observer where the observer’s own deservingness and lack of product status are found to exacerbate schadenfreude via envy.     

Validating new product creativity in the eastern context of Malaysia

This paper examines the etic vs. emic nature of the new product creativity (NPC) construct often used in the strategic marketing and management literatures. The current study compares the NPC measure developed by Im and Workman (2004) in the West in an Eastern context by utilizing data from 172 Malaysian companies. The results show that NPC, which is the combination of new product (NP) novelty and NP meaningfulness, has a different connotation in Malaysia. The findings demonstrate that from the novelty perspective NPC is an emic phenomenon. After the construct validation process, the Western claim that NPC is a seed of firm performance is tested. The results verify NPC's relationship with NP performance as a source of competitive advantage for Malaysian firms and thus suggest that this relationship is etic in nature. These findings have significant implications for firms' global innovation strategies.     

Private labels and new product development

This paper provides a positive theory of private labels in new product development when a non-integrated distribution channel is faced with demand uncertainty. We consider a regular marketing environment in which a manufacturer endowed with a branded product seeks to design a new product to resolve its retailer’s mis-targeting problem and to optimally screen consumers. Assuming that only linear pricing schemes are available and that the retailer learns the state of demand earlier than the manufacturer does, we show that the presence of a private label always improves channel efficiency. Moreover, a private label is more likely to prevail when the existing branded product is a premium item.

The role of top management teams in transforming technology-based new ventures' product introductions into growth

The literature highlights the importance of top management teams (TMTs) for technology-based new ventures' success in achieving growth, which is often achieved through product introductions. The human capital theory suggests that TMT members' skills, which are typically derived from their education and experience, can facilitate the transformation of new product introductions into growth. We also propose that multiple products that must be managed and brought to the marketplace smoothly and flexibly benefit from the lower coordination needs and conflicts that are typical of functionally homogeneous teams. Using a unique, multi-source dataset on 374 US technology-based new ventures during the period from 2005 to 2014, we find that new product introductions help technology-based new ventures grow only when the TMT has startup experience and is not functionally diverse. Our findings lead us to echo calls in the TMT literature to move away from simple direct-effect models to more situation-dependent analyses of TMT diversity.     

Tacit meaning in disguise: Hidden metaphors in new product development and market making

This article explores the role of metaphor in product development processes and market making. Based on a sociocognitive perspective of innovation dynamics and required learning by market actors, the potential of metaphors for mental model development during new product development (NPD) processes is investigated. Three roles for metaphors as cognitive focusing devices for the co-evolution of producers' and consumers' mental models are inferred: mental model communication, mental model matching, and mental model creation. These roles are illustrated by examples that reinforce the need for creativity in applying metaphors as cognitive focusing devices in NPD and market making.     

An investigation of the black-box supplier integration in new product development

This research examines black-box supplier integration in new product development (NPD). A model and several hypotheses are proposed to study the relationship between product task characteristics (importance and complexity), supplier integration, and product performance. Data from 136 U.S. high-tech firms were used to test the hypotheses. Results suggest that assessing the importance and complexity of NPD tasks is critical to the implementation of supplier integration innovation strategy. Firms are likely to perform NPD tasks that are related to firms' core competencies in-house. They tend to externalize complex tasks to suppliers in order to utilize suppliers' resources and to increase NPD speed. The black-box supplier integration influences the speed to market. However, it is more effective on speed to market when technology uncertainty is low than when technology uncertainty is high.     

Effects of team cognition and constraint on new product ideation

Idea generation is a critical activity in new product development. This study investigates the effects of ideation team's cognitive depth (specialization) and breadth (diverse expertise) as well as goal constraint on the generation of new product ideas. Focusing on the determinants of new product idea development helps articulate the mechanisms to generate more useful and novel product ideas. The findings indicate that specialization and diverse expertise affect idea novelty directly, albeit differently. Goal constraint helps enhance the usefulness dimension of new product ideas, but has little effect on the newness dimension of the ideas. Finally, goal constraint helps harness the diverse expertise of the team toward a more useful idea.     

Three dimensional product presentation quality antecedents and their consequences for online retailers: The moderating role of virtual product experience

This study investigates the impact of three-dimensional (3D) product presentation quality (3D-Q) on attitude toward presented product and attitude toward website, which in turn affect users’ satisfaction. Therefore, this research developed a hypothetical online retailer website, which presents a variety of 3D laptops that allows users to control the content and form of the 3D flashes. We measured 3D-quality based on a multi-dimensional construct. In other words, we define and operationalize 3D-quality based on information quality, system quality, authenticity, and enjoyment (second-order). We employed a non-student sample (n=410) to collect the data. We find that 3D-quality determines perceptions of attitude toward presented product and attitude toward website, which in turn influence users’ satisfaction. Furthermore, we find that virtual product experience moderates the relationships between attitude toward presented product, attitude toward website and users’ satisfaction. Our study provides important implications for e-tailers.     

Choosing among alternative new product development projects: The role of heuristics

The initial screening decision that marketing managers make is critical. It requires the selection of what innovation project to invest in, which is fundamental to marketing success. However, our knowledge of how managers make these decisions and how this impacts performance is limited. By drawing upon cognitive psychology and the managerial decision-making literature, we address two critical questions. The first question focuses on identifying specific decision-making types (e.g., specific heuristics, intuition) used when making an innovation screening decision. Based on this analysis and prior research, we develop specific decision-maker profiles about how an individual manager decides. The second research question is about connecting these profiles with performance. Specifically, it addresses what the consequences of different decision-maker profiles are on the perceived accuracy and speed of decision-making? Data were collected from 122 senior managers in these industries. We find that when heuristics are used alone, or concurrently with intuition, managers make decisions that are as accurate as when they rely on analytical decision-making. However, the process is significantly faster. The findings provide an important step toward a more comprehensive understanding of decision-making at the front-end of innovation.     

The role of endowments,technology and size in international trade: new evidence from product-level data

Using product-level trade data, we empirically investigate the export patterns of more than 150 countries in their exports to the USA, Brazil, India, and Japan. We document strong evidence that exporters specialize according to their relative factor endowments, technology, and economic size. More developed, capital abundant countries are found to export products of higher unit values and a wider range of products to developed, emerging and developing markets. More developed, economically larger, and technologically advanced countries are also the major exporters of new products, spanning a wide range of product categories with high unit values. Our findings provide important insights into the macro phenomenon that a large proportion of the global trade takes place among developed economies, and that the latter are also major exporters to developing markets.     

Effects of customer feedback level and (in)consistency on new product acceptance in the click-and-mortar context

We propose that feedback level and inconsistency jointly affect potential customers' acceptance of new products. We conducted two studies, one with a two-by-two design in which feedback level and inconsistency were constructed as binary categories, and the other with a continuous design of feedback level and inconsistency. We found that (1) higher feedback level and lower inconsistency increase customer acceptance; (2) feedback inconsistency moderates the relationship between feedback level and customer acceptance; and (3) extremely negative feedback has more significant impact than do moderately negative or extremely positive ones.