When Does Customer Orientation Hinder (Help) Radical Product Innovation? The Role of Organizational Rewards

Prior marketing literature offers a compelling theoretical rationale in support of two contradictory propositions, namely, that customer orientation is negatively related to (i.e., hinders) radical product innovation and that customer orientation is positively related to (i.e., helps) radical product innovation. In this research, the contextual conditions that determine the validity of these contradictory propositions are identified. Drawing from the literature on organizational rewards, two types of organizational rewards—outcome based and strategy based—are identified as being the key contextual conditions. It is hypothesized that when outcome‐based rewards are in effect, customer orientation is negatively related to radical positive innovation and, that when strategy‐based rewards are in effect, customer orientation is positively related to radical product innovation. Results from a survey of 156 manufacturing firms, and from a survey of 97 of their customers, provide support for these hypotheses. While prior research has attempted to explain the contradictory nature of the relationship between customer orientation and radical product innovation using typology‐based and mediator‐based approaches, the contextual condition‐based approach has not been well developed. This gap is addressed by the present research. From a practitioner perspective, the research is important because it identifies a concrete mechanism that new product development managers can deploy, in tandem with customer orientation, if they intend to generate radical product innovations. Given the potential gains that flow from radical product innovation, the research findings are expected to be of considerable interest to managers of new product development projects.     

The Interplay of Customer and Product Innovation Dynamics: An Exploratory Study

The challenges of successfully developing radical or really new products have received considerable attention from a variety of marketing, strategic, and organizational perspectives. Previous research has stressed the importance of a market‐driven customer orientation, the resolution of market and technological uncertainty, and organizational processes such as cross‐functional teams and organizational learning. However, several fundamental issues have not been addressed. From a customer's perspective, a more innovative product tends to have uncertain benefits and requires customers to learn new behaviors. Customer preferences can, therefore, change as product experience and learning increase. From a firm's perspective, it is unclear how to be customer‐oriented under such dynamic preferences, and product strategies using evolving technologies will tend to interact with how customers learn about an innovation. This research focuses on identifying unresolved issues about these customer and product innovation dynamics. A conceptual framework and series of propositions are presented that relate both changing technology and customer learning to a firm's strategic decisions in developing and launching really new products. The framework is based on in‐depth interviews with high‐tech product managers across several sectors, focusing on the business‐to‐business context. The propositions resulting from the framework highlight the need to consider relevant customer dynamics as integral to a firm's product innovation process. Successful innovation strategies and future research challenges are discussed, and applications to better understanding customer needs and theories of disruptive innovation are examined. Several key insights for innovation success hinge on a broad, downstream orientation to customer needs and product innovation dynamics. To be effective innovators, firms must know their customers' customers and competitors as well as or better than their immediate customers do. Market research must extend downstream for a comprehensive understanding of customer needs dynamics. In the context of disruptive innovation, new dimensions of customer needs may become more valuable based on perceived downstream customer trends. Firms may also innovate on secondary needs because mainstream customers do not always give firms the design freedom to radically innovate on primary features. Understanding customer commitments and how they develop under evolving needs can help firms focus resources on innovative efforts more likely to be accepted by customers.     

The Antecedents and Consequences of Affordable Value Innovations for Emerging Markets

Emerging markets offer tremendous growth opportunities for firms. While established multinational firms typically focus on premium segments in emerging markets, they often fail to leverage additional growth opportunities in so‐called good enough or low‐income segments in emerging markets. Customers in these low‐income markets have substantially different requirements and are very price sensitive. Theoretical and case‐based research suggests that innovating for these low‐income segments in emerging markets differs significantly from innovating for premium or traditional Western markets. We argue that tapping successfully into low‐income segments in emerging markets requires the development of new products that meet the low price expectations while at the same time offering also value to customers in these segments. We refer to these new products as affordable value innovations. We analyze the antecedents of affordable value innovation for emerging markets. We draw on institutional theory to derive three potentially relevant antecedents of affordable value innovation for emerging markets. These are bricolage, local embeddedness, and standardization. We test our hypotheses using multiple informant data from 47 multinational corporations involving 103 innovation projects that target low‐income customers in emerging markets. Our empirical analysis shows that all three antecedents have significant effects on the level of affordable value innovation: while bricolage and local embeddedness are positively related to the level of affordable value innovation, standardization has a negative impact. We also examine the relationship between the level of affordable value innovation and performance. We find evidence for our basic assumption that a firm's capability to develop and launch affordable value innovations is key to success in emerging markets. It indicates that a firm's investments in affordable value innovations for emerging markets pay off financially. Finally, a cross‐regional comparison of our data shows that the key findings on antecedents of affordable value innovation and its impact on performance do not vary across various emerging markets. Overall, our findings offer important implications for research on and the practice of innovation for low‐income segments in emerging markets.     

Balancing the Two Knowledge Dimensions in Innovation Efforts: An Empirical Examination among Pharmaceutical Firms

This study investigates the relationships between the two knowledge dimensions (knowledge breadth and knowledge depth) and two types of innovations (radical innovation and incremental innovation). While existing literature identifies knowledge in general as an important driver of innovation, the exact relationships between knowledge breadth/depth and incremental/radical innovations are not clear. Drawing from the knowledge‐based view, this study advances the understanding of the relationships between knowledge dimensions and types of innovations by hypothesizing a nonlinear relationship between knowledge breadth and radical innovation as well as a nonlinear relationship between knowledge depth and incremental innovation. Furthermore, the moderating effects of the interaction between knowledge breadth and knowledge depth on the above‐mentioned relationships are also examined. Due to the different natures of the two types of innovations, it is hypothesized that knowledge depth positively moderates the relationship between knowledge breadth and radical innovation while knowledge breadth negatively moderates the relationship between knowledge depth and incremental innovation. To empirically test the hypotheses, secondary data from multiple sources were collected on 64 pharmaceutical firms over 15 years. Due to the panel data structure and observed dispersion issues in the dependent variables, negative binomial random effects models were formulated to test the hypotheses. The statistical results largely support the proposed hypotheses. The results demonstrate that while knowledge breadth positively contributes to the development of radical innovations and knowledge depth positively contributes to the development of incremental innovations, both relationships are subject to diminishing returns. Furthermore, while the finding did support the negative moderating effect of the knowledge breadth on incremental innovation, the positive moderating effect of knowledge depth on radical innovation is not supported. While the effect is not explicitly hypothesized, knowledge breadth seems to have a direct impact on incremental innovation as well.     

CUSTOMER POWER,STRATEGIC INVESTMENT,AND THE FAILURE OF LEADING FIRMS

Why might firms be regarded as astutely managed at one point, yet subsequently lose their positions of industry leadership when faced with technological change? We present a model, grounded in a study of the world disk drive industry, that charts the process through which the demands of a firm's customers shape the allocation of resources in technological innovation—a model that links theories of resource dependence and resource allocation. We show that established firms led the industry in developing technologies of every sort—even radical ones—whenever the technologies addressed existing customers' needs. The same firms failed to develop simpler technologies that initially were only useful in emerging markets, because impetus coalesces behind, and resources are allocated to, programs targeting powerful customers. Projects targeted at technologies for which no customers yet exist languish for lack of impetus and resources. Because the rate of technical progress can exceed the performance demanded in a market, technologies which initially can only be used in emerging markets later can invade mainstream ones, carrying entrant firms to victory over established companies.     

The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation

In today's highly competitive global environment, even small and medium-sized enterprises (SMEs) need to make product and process innovations in order to outperform the competition and satisfy global customers. Investigating the success factors of innovation performance has become critical for the survival and competitiveness of SMEs. The aim of this study is to explore the impact of the degree of internationalization (DoI) on innovation performance through the mediating factors of market and entrepreneurial orientation in the context of emerging-market SMEs. We tested our model and hypotheses with 235 SMEs in the United Arab Emirates, which is an emerging market. The results obtained from partial least squares estimates indicate that the degree of internationalization positively affects innovation performance and, more importantly, that this relationship is indirect and fully mediated by market and entrepreneurial orientation for SMEs. These results shed light on the mechanism of the effect of DoI on innovation performance in the emerging-market SME context.     

Customer involvement in big data analytics and its impact on B2B innovation

Extant literature assumes that customers mainly serve as passive data providers and that firms take responsibility for big data analytics. In line with a current trend in real-world practice, this research, based on the open innovation literature, challenges this assumption and argues that customers can have more engagement in big data analytics. The authors distinguish two constructs: Customer as Data Provider (CDP) and Customer as Data Analyst (CDA). The former is consistent with the mainstream view that customers serve as the data source. The latter, on the other hand, sheds light on an active role customers play in big data analytics – that is, customers participate in a co-creation process where they acquire, analyze and act on big data. Using survey data of 148 Business-to-Business (B2B) innovation projects, the authors find that both types of customer involvement facilitate B2B product innovation. Furthermore, the authors examine moderation effects of customer need tacitness and customer need diversity. Results show that customer need tacitness negatively moderates the relationship between CDP and new product performance while customer need diversity yields a positive moderation effect. Customer need tacitness is also found to positively moderate the relationship between CDA and new product performance.     

Customer interactivity and new product performance: Moderating effects of product newness and product embeddedness

Understanding customer needs which drive significant product innovation is particularly challenging for new product development (NPD) organizations. Research has addressed how organizations benefit from interacting with customers, but more conceptualization is needed into the dimensions of the customer interaction process. In a business-to-business (B2B) setting, customer interactivity is conceptualized as a multi-dimensional construct consisting of bidirectional communications, participation, and joint problem solving during NPD projects. Drawing upon organizational information processing theory, customer interactivity is hypothesized to be positively related to customer information quality when developing highly innovative products, but not when developing modifications or extensions of existing products. Another condition affecting this relationship studied is the embeddedness of the new product in the customer's business environment. Customer interactivity is hypothesized to be positively related to information quality for highly embedded product, but not for low embedded product. Results from a sample of NPD organizations in several B2B industries support these hypotheses. The study contributes to the marketing literature and practice by identifying important dimensions of the customer interaction process which lead to more proactive organizations, and identifying two moderating conditions of the customer interactivity and NPD performance relationship.     

Customer and Competitor Insights,New Product Development Competence,and New Product Creativity: Differential,Integrative, and Substitution Effects

Developing creative new products requires a synthesis among customer‐oriented and competitor‐oriented learning, and new product development competence. However, underlying this synthesis is a paradox: how to integrate both customer and competitor insights within a technology‐centric new product development process. In order to examine the nature of this organizational tension, this study develops a conceptual framework and tests a series of six hypotheses with data generated from our study of creative new products within 187 high‐technology ventures in China. Differential effects are found in the way in which customer‐oriented learning (neutral) and competitor‐oriented learning (positive) relate to new product creativity. Their integration, meanwhile, is positively related to this new product outcome. Results also reveal that new product development competence, both independently and when integrated with customer‐oriented learning, positively impacts new product creativity. However, the study also reveals a surprising finding of a substitution effect where the combination of competitor‐oriented learning with new product development competence is inversely related to new product creativity. These findings are discussed, and their implications are derived for further research and both market and technology management.     

In Search of Innovation and Customer‐related Performance Superiority: The Role of Market Orientation,Marketing Capability,and Innovation Capability Interactions

Understanding the mechanisms through which firms realize the value of their market‐based knowledge resources such as market orientation is a central interest of innovation scholars and practitioners. The current study contends that realizing the performance impact of market orientation depends on know‐how deployment processes and their complementarities in functional areas such as marketing and innovation that co‐align with market orientation. More specifically, this study addresses two research questions: (1) to what extent can market orientation be transformed into customer‐ and innovation‐related performance outcomes via marketing and innovation capabilities; and (2) does the complementarity between marketing capability and innovation capability enhance customer‐ and innovation‐related performance outcomes? Drawing upon the resource‐based view and capability theory of the firm, a model is developed that integrates market orientation, marketing capability, innovation capability, and customer‐ and innovation‐related performance. The validity of the model is tested based on a sample of 163 manufacturing and services firms. In answer to the first research question, the findings show that market orientation significantly contributes to customer‐ and innovation‐related performance outcomes via marketing and innovation capabilities. This finding is important in that market‐based knowledge resources should be configured with the deployment of marketing and innovation capabilities to ensure better performance. In answer to the second research question, the findings indicate that market orientation works through the complementarity between marketing and innovation capabilities to influence customer‐related performance but not innovation‐related performance. Managers are advised to have a balanced approach to managing the deployment of capabilities. If they seek to achieve superiority in customer‐related performance, marketing capability, innovation capability, and their complementarity are essential for attracting, satisfying, building relationships with, and retaining customers. On the other hand, this complementarity would be considerably less important if firms placed greater emphasis on achieving superiority in innovation‐related performance. In contrast to many existing studies, this study is the first to model the roles of both innovation capability and marketing capability in mediating the relationship between market orientation and specific performance outcomes (i.e., innovation‐ and customer‐related outcomes).     

Using Product Bundling to Facilitate the Adoption Process of Radical Innovations*

Generally, radical innovations are not easily adopted in the market. Potential adopters experience difficulties to comprehend and evaluate radical innovations due to their newness in terms of technology and benefits offered. Consequently, adoption intentions may remain low. This paper proposes bundling as an instrument to address these problems. More specifically, this paper examines how consumer comprehension, evaluation, and adoption intention of radical innovations may be enhanced by bundling such products with existing products. In addition, it is argued that the proposed effects are contingent upon the level of fit perceived to exist between the radical innovation and the product that accompanies it in the bundle. Furthermore, consumers' prior knowledge may affect the influence of bundling on the innovation adoption process as the interpretation of the meaning of new products may be strongly related to prior knowledge. This study therefore investigates whether consumer prior knowledge has such a moderating effect. Hypotheses are tested by means of an experimental study with three different radical innovations and distinguishing among offering the radical innovation separately, offering the radical innovation in a bundle with moderate perceived fit between the products, and offering the radical innovation in a bundle with high perceived fit between the products. Results show that product bundling enhances the new product's evaluation and adoption intention, although it does not increase comprehension of the radical innovation. Moreover, the results show that comprehension, evaluation and adoption intention of the innovation significantly decrease when consumers perceive a moderate fit between the products in a bundle. Taken together, these findings contribute to the bundling literature by showing not only that product bundling may indeed be an effective instrument to introduce a radical innovation but also that product bundling may be counterproductive when ignoring the critical role of perceived product fit as core characteristic of a product bundle. In addition, the notion that product bundling helps to enhance the evaluation and purchase intention of new and relatively complex products suggests a suitable strategy for new product managers to enhance benefits and reduce learning costs for radical innovations. Moreover, the effects of bundling on consumer appraisals of radical innovations are also shown to depend on the level of knowledge respondents possess regarding the product category of the radical innovation. More specifically, if bundled with a familiar product, novices tend to evaluate the innovative product more positively, but for experts no such effect can be detected. As such, these results provide additional specific implications for managers when introducing radical innovations in the market. Offering a radical innovation in a product bundle could be a fruitful strategy for companies that target customers with little or no prior knowledge in the product domain.     

Paths Toward Radical Service Innovation in Manufacturing Companies—A Service‐Dominant Logic Perspective

Research on servitization of manufacturing companies concentrates on typologies of product–service bundles, on transition pathways to increased servitization, and on resource and capabilities configurations necessary to accomplish this transition. Missing from existing research is an analysis of the degree of novelty of service innovations introduced by manufacturing companies. Therefore, this article shifts the focus from the transition process itself to the question of how manufacturing companies can introduce radical service innovations to the market. This article links servitization literature with service innovation literature and investigates how manufacturing companies can introduce radically new services in terms of three forms of innovations: service concept innovations, customer experience innovations, and service process innovations. Service‐dominant logic (SDL) is applied as the theoretical lens because it covers four significant factors influencing the success of companies’ innovation activities: actor value networks, resource liquefaction, resource density, and resource integration. Based on a multiple case study of 24 Danish business‐to‐business manufacturing small‐ and medium‐sized enterprises and through a fuzzy set qualitative comparative analysis, different configurations of the principles of SDL are analyzed. They describe the paths to radical service innovation. Digitalization appears as a central causal condition in the bulk of the configurations. Big and rich data generated internally within the focal company in combination with for instance customer data can enhance the innovativeness of the service offerings. However, digitalization is not a sufficient condition for launching radical service innovation—it should be combined with an efficient mobilization of resources internally within the focal company and/or collaboration with other organizations within the value system. In addition, the analysis hints to a need to detach from immediate customers as the prime driver of service innovation.     

Benefits of Customer Codevelopment of New Products: The Moderating Effects of Utilitarian and Hedonic Radicalness

There is growing belief in the value of actively involving customers in innovation, commonly referred to as customer codevelopment or cocreation. These strategies are generally believed to be beneficial, although contingent views are prevalent. A widely espoused contingent view is that the positive contribution of customer codevelopment is dependent on the degree of radicalness (or innovativeness) of the products being developed. Some work argues that customer codevelopment is more useful for incremental innovation, whereas other work claims that customer codevelopment is more valuable when innovation is radical. This research makes an important contribution to this discourse by making a distinction between utilitarian radicalness and hedonic radicalness. Utilitarian radicalness refers to the degree to which an innovation is novel in terms of technology and functionality, whereas hedonic radicalness refers to the degree to which an innovation is novel in terms of sensorial, emotional, or symbolic aspects. Hypotheses about the contribution of customer codevelopment to market success depending on levels of utilitarian and hedonic radicalness are tested using dual‐respondent data about a large sample of innovation projects. The findings suggest that the contribution of customer codevelopment to market success is positively moderated by utilitarian radicalness and negatively moderated by hedonic radicalness. This underlines the importance of taking not only the level, but also the nature, of radicalness into account when making decisions about customer codevelopment.     

Defining and identifying disruptive innovations

Three essential questions about innovations prevent academics from helping managers determine if a new technology is a disruptive innovation to their organization. First, what is a disruptive innovation? Second, how can a disruptive innovation be disruptive to some and yet sustaining to others? Third, how can disruptive innovations be identified before a disruption has occurred in an organization? This paper proposes answers to these three questions by redefining disruptive innovations through use of innovation adoption characteristics. Through the relative nature of innovation characteristics, a heuristic, or Baedeker, to better determine if an innovation could be disruptive to an organization is proposed. Illustration of the approach is presented to show how potentially disruptive innovations could be identified before an organizational disruption has occurred.     

The Influence of Regulation and Disruptive Potential on Incumbents' Submarket Entry Decision and Success in the Context of a Network Industry

This paper uses the theoretical perspectives of disruptive innovation, network externalities, and regulation to study the submarket strategies of incumbent firms that operate in a regulated network industry. In this setting, the impact of potentially disruptive innovations might be different because of the tighter regulation of incumbent firms. By analyzing the entry and success patterns of incumbent mobile network operators (MNOs) in the public hotspot markets in 17 Western European countries, we focus on how regulation and network effects as well as disruption factors influence the incumbent firms' strategies. In doing so, this paper departs from prior research that has primarily focused on unregulated industries and combines contradicting explanations from disruptive innovation theory, the motivation/ability framework, regulation theory, as well as network effects to provide a comprehensive analysis on how incumbents behave in a regulated network industry that is being confronted with a potentially disruptive innovation. In particular, while disruptive innovation theory predicts that the incumbents' vast experience in an industry could cause them to avoid entering new submarkets created by potentially disruptive innovations, the desire to avoid regulation could encourage such submarket entry. Furthermore, in regulated network industries, incumbent firms might have a stronger motivation to enter new submarkets as the importance of single customers and high market shares could be substantially different. These contrasting insights are used to develop an integrative research model and to derive hypotheses on incumbents' submarket entry decision and success. Drawing on cross‐sectional, multicountry data of 62 MNOs that operate in 17 Western European countries, this study uses logit and tobit regressions to test the impact of disruption factors, regulation, and network externalities on the entry decision and success of incumbent firms. The results reveal that the incumbent MNOs are caught in an area of conflict between the regulated industry context and their international technology strategy. The findings suggest that the incumbent MNOs' motivation and ability to escape regulation positively influenced their submarket entry and success in the public hotspot market. Thus, the potentially disruptive scenario was successfully turned into a potentially sustaining one as the incumbent MNOs could enhance their presence in the mobile broadband market. The testing on a multicountry basis as well as the positive influence of ethnocentric technology strategies for public hotspots, which are devised in the headquarters' location and are then brought out internationally, shed new light on an industry that has typically been characterized by country‐by‐country decisions. These findings may also reveal challenges for future research on disruptive innovations in multinational industries and expose future challenges for regulative authorities and managers. This paper thereby adds to the theory of disruptive innovation as it includes the influence of regulation on incumbents in network industries. Additionally, this study expands on previous findings on the disruptive potential of wireless local area network technology by employing a multi‐country analysis in 17 Western European countries.     

Lifting the veil on the link between absorptive capacity and innovation: The roles of cross-functional integration and customer orientation

Drawing on the integration of organizational learning, contingency theory, and theory of jobs to be done, this study develops a moderated mediation model of how a firm's absorptive capacity influences innovation performance. We hypothesize that cross-functional integration may mediate the absorptive capacity-innovation performance link and that customer orientation may positively moderate the mediating effect of cross-functional integration. To test our hypotheses, we conducted a mail survey of manufacturing firms, obtaining 456 valid responses for data analysis. Regression and bootstrap analyses reveal that cross-functional integration partially mediates the effect of absorptive capacity on innovation and that customer orientation enhances the mediated effect. Specifically, the mediating effect of cross-functional integration is stronger and significant when customer orientation is high. In contrast, the mediating effect of cross-functional integration is weaker and insignificant when customer orientation is low. Overall, this study's findings contribute to advances in marketing theory on innovation by identifying cross-functional integration and customer orientation as two key factors that together explain why and under what conditions absorptive capacity affects innovation. The findings also advise managers that in addition to developing absorptive capacity, firms should cultivate a strong customer orientation, which directs cross-functional integration toward converting external knowledge into increased innovation performance.     

The Role of Value‐Informed Pricing in Market‐Oriented Product Innovation Management*

Although the positive effect of a market orientation on new product success is widely accepted and the market orientation literature has increased its understanding of how a market orientation leads to performance, the extant literature has overlooked the role of value‐informed pricing in the relationship. Value‐informed pricing is a pricing practice in which the decision makers base the price of the new product on the customers' perceptions of the benefits that the product offers and how these benefits are traded by customers against the price (that has yet to be determined). Considering that pricing mistakes may hit hard on the profitability of product innovations, it is important to firms to have a good understanding of its role. This study develops a framework in which value‐informed pricing is integrated in the relationship between market orientation and new product performance. A distinction is made between customer and competitor orientations, and relative product advantage is also included in the conceptual model. The model is tested on data obtained from managers based on a cross sectional sample of 144 firms. The respondents were involved in a decision‐making process of the pricing of a new product. The model is tested using structural equations modeling. The results show that value‐informed pricing has a strong effect on new product performance. It also reveals that each component of a market orientation fulfills a specific role in a market‐oriented organization. Value‐informed pricing is found to have important mediating effects in the market orientation–new product performance relationship. Results show that firms with a strong customer orientation engage in value‐informed pricing and develop superior benefits to customers in an advantageous product. In turn, both value‐informed pricing and relative product advantage positively affect new product market performance. However, no significant effect of competitor orientation on value‐informed pricing is found. Combined with the finding that competitor orientation negatively affects relative product advantage, this suggests that competitor orientation may hurt new product performance when this orientation is not balanced with a strong customer orientation. The results also portray that value‐informed pricing leads to higher product advantage. Interestingly, this relation is contingent on the degree of interfunctional coordination within the firm. This suggests that the relationship between market orientation and new product performance is strongest if firms integrate value‐informed pricing in the new product development process. In this sense, a market‐oriented firm mirrors the customer value perception that makes a trade‐off between benefits and price.     

Autonomous Teams and New Product Development

An autonomous team is an emerging tool for new product development (NPD). With its high degree of autonomy, independence, leadership, dedication, and collocation, the team has more freedom and stronger capabilities to be innovative and entrepreneurial. Several anecdotal cases suggest that autonomous teams are best when applied to highly uncertain, complex, and innovative projects. However, there is no empirical study to test such a notion. Moreover, autonomous teams are not a panacea, and implementing them can be costly and disruptive to their parent organization. When should this powerful, yet costly tool, be pulled out of the new product professional's toolbox? This paper attempts to answer this question. The objective of this study is to explore under which circumstances an autonomous team is the best choice for NPD. Based on contingency and information‐processing theories, autonomous teams are hypothesized to be more effective to address projects with: (1) high technology novelty and (2) radical innovation. To test these hypotheses, the relative effectiveness of four types of team structures: autonomous, functional, lightweight, and heavyweight are compared. The effectiveness measures include development cost, development speed, and overall product success. Vision clarity, resource availability, and team experience are the controlled variables. The empirical results based on the data from 555 NPD projects generally support the research hypotheses. Relative to other team structures, autonomous teams are more effective in addressing projects with high technology novelty or radical innovation. The results also suggest that heavyweight teams perform better than other teams in developing incremental innovation. These results provide some evidence to support contingency and information‐processing theories at the project level. Given the importance of the development of novel technology and radical innovation in establishing new businesses and other strategic initiatives, the findings of this study may not only have some important implications for NPD practices but may also shed some light on other important topics such as disruptive innovation, strategic innovation, new venture, corporate entrepreneurship, and ambidextrous organization.     

Two Sides of the Same Coin: How Do Different Dimensions of Product Program Innovativeness Affect Customer Loyalty?

Conventional wisdom holds that innovativeness has essentially positive performance implications. However, empirical research reveals mixed findings regarding customer‐related responses to innovation, as distinct dimensions—such as product newness and meaningfulness—may generate responses in different manners. This study introduces a multidimensional conceptualization of innovativeness at the program level, thereby enlarging the customary perspective by considering both positive and negative customer responses to innovativeness. Drawing on information economics, this study suggests that product program meaningfulness fosters customer loyalty, whereas product program newness undermines customer loyalty. In addition, the study examines mechanisms that might buffer the negative newness–loyalty relationship and explores enablers of the positive meaningfulness–loyalty effect by considering a brand's association with innovativeness and customer integration. Empirical support for the proposed effects comes from a multi‐industry sample with 180 triadic cases from business‐to‐business companies, which includes assessments from marketing, and research and development managers as well as customers. Moderated regression analysis was applied to test the hypotheses. The results indicate a negative effect of product program newness on customer loyalty and a positive effect of product program meaningfulness. Further, a brand's close association with innovativeness reduces the negative effect of product newness, and integrating customers into the value‐creating process fosters the loyalty effect of product meaningfulness. This study offers a potential explanation for the ambiguity created by equivocal empirical results regarding customer responses to innovativeness. The study also shows that offering more innovations does not necessarily make customers loyal. Instead, managers should mitigate the negative effects of product program newness.     

Does Market Orientation Facilitate Balanced Innovation Programs? An Organizational Learning Perspective

There appears to be widespread agreement that optimal new product development programs require a balance between customer-led and lead-the-customer innovation practices. The former is associated with adaptive learning inspired incremental innovation, whereas the latter is associated with generative-learning-inspired radical innovation. There is debate, however, as to whether a strong market orientation can facilitate this balance. Some believe that a strong market orientation causes firms to overemphasize customer-led incremental innovations. Others believe that a strong market orientation can facilitate this balance but assert that traditional measures of market orientation only capture the types of behaviors associated with customer-led incremental innovations. This latter concern has led some to abandon the single-construct operationalization of market orientation and to introduce two constructs—responsive and proactive market orientation—into the literature. The purpose of this research is to address these developments. The study makes use of a national sample of marketing executives and employs a cross-sectional survey design. Measures used are market orientation, radical and incremental innovation priority, generative and adaptive learning priority, and new product success. Confirmatory factor analyses and structural equations models are employed to develop measures and to test hypotheses. The study's results reaffirm the position that a strong market orientation helps facilitate a balance between incremental and radical innovation by shifting firms' innovation priority more toward radical innovation activities. It also suggests that the abandonment of traditional conceptualizations and measures of market orientation are premature.