Effective implementation of relationship orientation in new product launches

The critical role of relationships in business performance is widely recognized in the business marketing literature. However, to date, the prevailing new product launch research has concentrated on firms' general customer and competitor focus on predicting launch performance, and mainly applied a product centered or marketing mix perspective on considering effective strategic and tactical launch activities. Consequently, there is only scant knowledge on the relevance of a relational perspective when launching new products. The study contributes to this gap by examining the impact of firms' relationship orientation on launch performance and the key activities through which it is transformed into performance in the new product launch context. A set of hypotheses is developed and tested with data collected from 109 new product launches in pharmaceutical companies. The results show that sales force management and relationship leveraging mediate relationship orientation's impact on launch performance through complexly intertwined relationships. From a theoretical perspective, this study highlights the role of the relational perspective in new product launch and fosters our understanding on how relationship-focused culture is effectively implemented in practice. From a managerial perspective, the results offer insights on how firms can effectively enhance the successful commercialization of new products through relationship-oriented sales and marketing activities.     

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.     

Externally Directed and Internally Directed Market Launch Management: The Role of Organizational Factors in Influencing New Product Success

Introducing new products remains a critical challenge for managers. Consumer acceptance of new products is key to new product success and requires the effective implementation of market launch activities. The present study describes the relationship between different types of market launch activities and market‐related, time‐related, and financial market launch success. The study's framework extends previous work on launch management by complementing the view that launch activities are predominantly outwardly directed with the notion that launch management can also be inwardly directed. More specifically, launch activities can both target customers as the external audience, for example, via communication and pricing, and address an internal audience, such as management and sales personnel, for example, using departmental coordination or employee incentives. The study also sets out to investigate how situational factors impact the relative effectiveness of both externally directed and internally directed launch activities in engendering successful new product launches. In particular, product newness, technology drivers, and firm size are considered as relevant variables. Structural equation analysis of data on 178 new products across industries provide empirical evidence that market launch success depends on the intensity of both externally directed and internally directed market launch activities. With regard to the overall impact of internally directed activities, the findings confirm that organizational factors and antecedents indeed play a critical role in new product launch and its respective performance with internally directed activities having an even stronger impact on time‐related and financial success than outwardly directed instruments. Specifically, these internal activities are often viewed as idiosyncratic resources that are hard for competitors to observe and are therefore more difficult—if not impossible—to replicate compared to externally directed activities in market launch. The paper clearly pinpoints that the successful launch of new products is a complex task that also necessitates the implementation of internally directed launch activities. Fast market penetration requires coordination among the different internal players as well as support from top management. Furthermore, the financial objectives of the market launch can only be met if employees and executives both receive the necessary incentives and support to effectively execute the new product introduction. The study also demonstrates that moderators impact the strength of the effectiveness of these two different types of market launch activities. This research provides important implications for launch management by advocating that the two foci on external and internal constituencies should not be pursued in isolation but that instead, the opposite is true.     

Managing Diffusion Barriers When Launching New Products

In recent years there has been a growing interest in the link between new product launch activities and market success. So far, most empirical research has focused on launch activities that target customer adoption barriers. However, with such a focus the influence of other stakeholders on innovation diffusion is not taken into account. A review of diffusion research and stakeholder theory serves as a basis for discussing the influence of different stakeholder groups such as customers, dealers, suppliers, and competitors on innovation diffusion. Essentially, it is expected that addressing multiple diffusion barriers during new product launch will have a positive impact on market success. The new concept for launch activities addressing multiple diffusion barriers is tested with data on new product launches in industrial markets using a multiple‐informant approach. The results lend support to the notion that a successful launch requires activities addressing diffusion barriers related to different stakeholder groups. Specifically, barriers related to customers, suppliers, and stakeholders of the further firm environment need to be lowered during market launch. For the group of competitors, a balanced launch approach including measures to both lowering and erecting entry and diffusion barriers will increase the market success of new products. The subsequent investigation of the influence of technological turbulence, market turbulence, and product complexity on the performance relationships shows that under high uncertainty managing multiple‐diffusion barriers is of higher relevance than in more unambiguous, clear‐cut contexts. Thus, the results demonstrate that a careful management of diffusion barriers related to multiple stakeholders is a relevant task when launching a new product. The paper concludes with implications for management practice and avenues for future academic research.     

Industrial New Product Launch Strategies and Product Development Performance

Just as reporters must answer a few fundamental questions in every story they write, decision-makers in the new product development (NPD) process must address five key issues: what to launch, where to launch, when to launch, why to launch, and how to launch. These decisions involve significant commitments of time, money, and resources. They also go a long way toward determining the success or failure of any new product. Deeper insight into the tradeoffs these decisions involve may help to increase the likelihood of success for product launch efforts. Erik Jan Hultink, Abbie Griffin, Susan Hart, and Henry Robben present the results of a study that examines the interplay between these product launch decisions and NPD performance. Noting that previous launch studies focus primarily on the tactical decisions (that is, how to launch) rather than on the strategic decisions (what, where, when, and why to launch), they explore not only which decisions are important to success, but also the associations between the two sets of decisions. Because the strategic launch decisions made early in the NPD process affect the tactical decisions made later in the process, their study emphasizes the importance of launch consistency—that is, the alignment of the strategic and tactical decisions made throughout the process. The survey respondents—managers from marketing, product development, or general management in U.K. firms—provided information about 221 industrial new products launched during the previous five years. The responses identify associations between various sets of strategic and tactical decisions. That is, the responses suggest that the strategic decisions managers make regarding product innovativeness, market targeting, the number of competitors, and whether the product is marketing- or technology-driven are associated with subsequent tactical decisions regarding branding, distribution expenditure and intensity, and pricing. The study also suggests that different sets of launch decisions have differing effects on performance of industrial new products. In this study, the greatest success was enjoyed by a small group of respondents categorized as Niche Innovators. Their launch strategy involves a niche focus, targeting innovative products into markets with few competitors. Tactical decisions made by this group include exclusive distribution, a skimming pricing strategy, and a broad product assortment.     

Seller–Buyer Interactions During the Commercialization of Technological Process Innovations

For buyers and sellers alike, high-tech process innovations can be a double-edged sword. On the one hand, technological process innovations (e.g., computer hardware and software, factory automation equipment) offer buyers the potential for reduced production costs and enhanced product quality. However, early adoption of such innovations is often a risky proposition. For the seller, successful commercialization requires stimulating not only adoption, but also successful implementation of the innovation. In other words, effective management of seller—buyer relations during the development and commercialization process go a long way toward determining the success of a high-tech process innovation. Gerard A. Athaide, Patricia W. Meyers, and David L. Wilemon examine the relationship marketing activities employed by successful sellers of high-tech process innovations. They identify eight strategic marketing objectives that underlie these relationship marketing activities: product customization, information gathering on product performance, product education and training, ongoing product support, proactive political involvement (to encourage support for the innovation from the various affected parties in the buyer's organization), product demonstration and trial, real-time problem-solving assistance, and clarification of the product's relative advantage. Their findings suggest that successful sellers engage in relationship marketing activities throughout all phases of the commercialization process. Rather than simply trying to close a deal, these firms seek active involvement from potential customers, ranging from codesigning of products to seeking feedback on product-related problems or desired modifications. This broader scope of customer involvement necessitates cooperation among various groups in the seller's organization. Product development and engineering work closely with the customer during product customization. Those groups must communicate effectively with the salespeople who demonstrate the product and with the customer support people who obtain feedback and provide real-time problem-solving support. In other words, these relationship marketing activities cut across functional barriers. Consequently, a clear understanding of the buyer's needs and environment is essential throughout the seller's organization, not just in the sales and marketing departments.     

Lean Launch: Managing Product Introduction Risk Through Response-Based Logistics

New product launch research has identified four strategic issues that involve activities essential to introduce a new product to its target market. The sum of these decisions is critical to new product success. Substantial research has focused on decisions guiding the proper product, price, and promotion mix to favorably impact market goals. Considerably less research has centered on determining how place capabilities such as logistics and supply chain relationships impact launch performance. Logistics and supply chain collaboration—the processes involved in planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements—can greatly reduce risk associated with new product launch. They combine to provide a structure to facilitate rapid response to developing demand by location and intensity. In this article, an effort is made to fill the gap in extant knowledge regarding new product launch strategies by reviewing relevant literature and comparing traditional launch strategies based on anticipatory demand forecasts with alternative lean launch strategies based on the principles of response-based logistics. The result is a lean launch model for continued empirical testing and managerial review. The article contrasts traditional logistics support of new product launch with an emerging logic called lean launch strategy. The traditional launch strategy is forecast driven and is based on anticipatory logistics (push). The lean launch strategy is formulated on principles of postponement and is based on response-based logistics (pull) and supply chain management. Response-based logistics systems provide flexibility that enables better management of inventory levels. Improved replenishment times and in-stock availability of products from a centralized inventory allows managers to rapidly react to actual demand. Lean launch enhances successful introduction by allowing greater flexibility in product variant selection while minimizing out-of-stock potential. Lean launch also can cut losses in product launch failures by reducing launch inventory exposure. Finally, lean launch can improve chances of new product success by helping limited volume technical successes achieve profitability.     

The Role of Globalization, Time Acceleration, and Virtual Global Teams in Fostering Successful Global Product Launches

The present article presents a conceptualization of how firms can respond to the issues of globalization and time‐based competition through the use of virtual global teams to foster successful global product launches. It is argued that by combining input, managerial, and transformation‐based competencies effectively, the firm can configure a repertoire of strategic choices (e.g., marketing plans throughout the product development process) based on the national competitive environment, while at the same time being mindful of the need to maintain consistency within the firm's intermediaries operations—both in product development and global product launch. It is further argued that the linkages between globalization and time‐based competition necessitate managerial adjustments in decision frameworks to incorporate accelerated timescapes to maximize effectiveness in global product launch. In an effort to capture the varying impact of time on global decision makers a timescapes perspective is employed, where timescapes are analogous to landscapes because they include the temporal features of socioeconomic events in a variety of socially constructed contexts inclusive of timeframe, tempo, degree of path dependency, synchronization of events, sequence, anticipation, and ubiquity. The recognition of timescapes accentuates the contextual complexity of competition and creates the interface among events, environments, and individuals beyond the traditional numeric concept of clock time, thus requiring modification of a manager's decision‐making perspective. Further, it is argued that due to the rapid pace of globalization, many multinationals in their global product launches require that products, services, technical support, and prices throughout the world need to be coordinated. To effectively accomplish this goal of coordination as an accommodation, firms and their networks can form global virtual teams (i.e., culturally diverse, geographically dispersed, electronically communicating work group of members, who think and act in concert with the diversity of the global environment and intermediary needs–expectations) to enhance global product launch success. Lastly, it is argued that the hypercompetitive global marketplace cannot be managed ex post due to the level of cognitive complexity but must be managed ex ante by developing strategies capable of maintaining flexibility. To accomplish the task of competing in a hypercompetitive landscape, management must understand and incorporate a timescape of events that integrates the various perspectives of those involved in the global product development and launch decision‐making processes. Without a well‐articulated perspective of social time, managers will limit their ability to effectively coordinate global product development and launch across markets, thus hindering the firm's ability to maximize returns.     

The impact of new product launch strategies on competitive reaction in industrial markets

The importance of successful innovation for the long‐term performance of companies can hardly be exaggerated. However, we need to consider this in a dynamic setting, in which competitors do not remain passive. We find that two thirds of new product launches meet reaction by competitors after their launch. We also empirically demonstrate that the strategic launch decisions that managers take have an effect on future reaction by competitors. Following an extensive review of the literature, a propositional model is developed. In order to test this theoretical model, an ex post facto field study was designed, in which the authors obtained comprehensive information on 509 new industrial products launched in the US, the UK and the Netherlands. Competitive reaction is diagnosed in terms of changes in the marketing instruments of the competitor. A logistic regression model is estimated on the occurrence of competitive reaction with any marketing instrument. We also look at the occurrence of individual marketing instrument reactions. The data show that competitors react primarily by means of price changes. Product assortment and promotional changes are less frequent, whereas distribution policy modifications occur very rarely. The characteristics of the new product launch strategy were found to have a significant impact on both the occurrence and nature of competitive reactions. We claim that the competitive effect of radically new products and incrementally new products greatly differs. The results show that competitors fail to respond to radical innovations and to new products that employ a niche strategy. They do react if a new product can be assessed within an existing product category and thus represent an unambiguous attack. Both innovative and imitative new products meet reaction in this case. The results also demonstrate that competitors are more inclined to react to the introduction of new products that are supported by extensive communication by the innovating firm. The likelihood of reaction is also higher in high growth markets than in low growth markets. The article discusses theoretical and managerial implications of these results, as well as thoughts for future research that may add more insight.     

Attitudes and behaviours of key account managers: Are they really any different to senior sales professionals?

This study investigates the range of attitudes and behaviours exhibited by Key Account Managers (KAMs) in their roles as customer relationship managers. Specifically, we test whether KAMs exhibit different behaviours and attitudes towards relationship management compared to other sales professionals based on a range of assumptions currently theorized but untested in the Key Account Management (KAM) literature. Utilizing the existing theoretical models of a KAM role we identify six major areas of relational behaviour assumed in the literature to separate the KAM from the sales professional. Drawing on a cross sectional quantitative study of 10 organizations and 409 key account managers, sales managers, and senior sales executives we explore goal orientation, planning, customer embeddedness, strategic prioritization, adaptability and internal management behaviours of our groups and find that, in certain managerial tasks, KAMs do indeed exhibit many of the different behaviours and attitudes predicted in the literature. However, in many customer-facing, goal orientated and revenue generating activities, contrary to expectations, they display similar attitudes and behaviours to those in senior sales roles. This challenges the way that the KAM role has previously been conceptualized. Our findings raise a potential issue for senior managers, since KAMs' unexpectedly short term orientation may lead to insufficient consideration of the strategic consequences of their decisions for these key customer relationships.     

Launch Decisions and the Early Market Survival of Innovations: An Empirical Analysis of the Italian Mobile Value‐Added Services (VAS) Industry

There is a surprisingly high number of new products and services that fail to produce enough return on the firm's investments in development and launch activities. Literature has shown that these failures can be due to a poorly planned and executed launch. Although a vast stream of research has studied how strategic and tactical launch decisions affect the performance of new products and services, some issues still need theoretical and empirical investigation. This paper aims to extend new product launch research in two ways. First, it studies how tactical launch decisions (i.e., investments in advertising and involvement of external organizations in the launch process) interact with an important strategic choice (i.e., the degree of radicalness of the new product or service) to affect new product performance. Second, it focuses on a particular dimension of performance, that is, early market survival, which has been overlooked in launch strategy and tactics research so far. Using a data set comprising more than 9300 new mobile value‐added services launched in Italy between 2003 and 2006, the paper finds that launch tactics interact with the radicalness of the innovation to affect early market survival. In particular, communicating the distinctive characteristics of the new product or service and partnering with external organizations during the launch process are tactics that work particularly well with radical innovations. This is possibly due to the fact that they help reduce customers’ uncertainty regarding expected benefits and transaction costs, and hence contribute to win their resistance to adopt the innovation soon after launch. Investments in corporate advertising lead instead to a tangible improvement of the probability of early market survival for both radical and incremental innovations. In other words, the positive impact on the probability of early survival of increasing investments in corporate advertising appears to be relevant for both radically and incrementally new services. One possible explanation is that this tactic helps increase the number of potential customers who come to know about the existence of the innovating firms and its offering soon after launch, but this is likely to be equally important to stimulate early diffusion of both incremental and radical innovations.     

Servitization in global business-to-business distribution: The central activities of manufacturers

Manufacturers' servitization development is a prevalent trend in the current business world. Companies then aim to increase customer closeness and complement product offerings with services. However, extant literature on distribution and marketing channels literature remains limited in terms of the implications of servitization for global business-to-business distribution. Therefore, this qualitative multiple case study identifies the central activities of servitizing manufacturers in global distribution. The study concludes with the following research propositions: Servitizing manufacturers develop global service portfolios and customize offerings according to local customer characteristics; build global operation models and adjust local service processes; ensure global brand coherency and design the customer experience according to local customer expectations; and create global value propositions and enhance local value co-creation with business customers. The study outlines managerial implications in terms of organizing global distribution. It also discusses new knowledge sharing and capability needs regarding solution sales, service provision and customer relationship management.     

Launch Strategy, Launch Tactics, and Demand Outcomes

In a typical new product development process, the role of the launch stage is to maximize the chances of profitably achieving acceptance in the target market. A launch plan can include strategic decisions (such as relative innovativeness, mass versus niche targeting, and lead versus follow) as well as tactical decisions (including the types of communication and distribution activities to emphasize, introductory pricing, branding, and when to announce new items and delete old ones). Unfortunately, the existing literature offers limited decision-making guidance to managers on how to prioritize and integrate the various strategic and tactical options. This article presents a conceptual framework that suggests that the strategic and tactical challenges posed in various product launch situations depend in large measure on the specific type of buying behavior to be influenced. Depending on the degree of product innovativeness, managers may establish one of three types of desired demand outcomes: (1) trial and repurchase, (2) customer migration, or (3) innovation adoption and diffusion. The degree to which the desired demand outcome is realized is shown to be dependent on buyers' perceptions of the new product's relative advantage and of its compatibility with buyers' values and experiences. Perceptions of the product on these two characteristics are initially influenced by the launch strategy. Given an understanding of these perceptions, managers can then select launch tactics designed to clarify or leverage relative advantages or to demonstrate or enhance compatibility to the target market. The framework also demonstrates how the linkages among launch strategy, launch tactics, and the demand outcomes are impacted by the product-market environment, the technological dynamics of the industry, and the firm's resources and capabilities. The author argues that, by examining a given launch situation in the context of this framework, managers will be able to think more systematically about the strategy and tactics required for market acceptance.     

Marketing Hype: A New Perspective for New Product Research and Introduction

Marketing research procedures typically used to support new product development activities often emphasize the collection of data from potential customers, even when the product success depends on the decisions of a number of key stakeholders such as distributors, media, etc. Consequently, most conventional product introduction efforts focus on a target customer segment and ignore the needs of other stakeholders. These narrowly concentrated research efforts can lead to unfounded expectations regarding the product performance. Similarly, the lopsided focus on consumers can lead to reduced marketing effectiveness. Jerry Wind and Vijay Mahajan argue for the recognition of the process of "marketing hype," a set of prelaunch activities leading to the creation of a supportive market environment. This can lead to the creation of broader strategies that focus on the key stakeholders as subjects for new product research, and targets for the introductory marketing programs. This could lead to a richer understanding of the intergroup influences on the adoption of the new product and increase the chances of a successful new product launch.     

Market-driving versus market-driven: Divergent roles of market orientation in business relationships

This study focuses on market orientation (MO) and customer intimacy (CI) in business-to-business marketing. These are generally regarded as key success factors in marketing. The authors argue, however, that the relationship between MO and customer relationship has not been properly examined, nor has its dependence on a firm's strategic market posture been understood. A contingency framework is proposed to test the postulated relationships between the key constructs. Our results indicate a strong positive association between MO and CI. Furthermore, this linkage is clearly influenced by the market focus and business logic adopted. In managerial terms, business executives must carefully match the strategic posture of the firm, its MO, and customer relationship management (CRM). Our findings strongly support a contingency modeling approach in studying the factors underlying marketing performance in business markets.     

Accelerating the Durable Replacement Cycle with Marketing Mix Variables

In many established product categories, a large component of sales is due to the replacement of existing units. Because of the long expected lifetime of durables, replacement decisions can often be postponed by the consumer. In light of this, one marketing strategy for manufacturers of such products may be to accelerate the timing of product replacement decisions for buyers planning to replace. In this article, Barry Bayus presents the results of his investigation of the effect of marketing efforts on shortening the replacement cycle. Such information can be used by new product managers to forecast more accurately long-term sales and to help decide when to introduce new products (e.g., with enhanced features). Using data on color television purchases, he shows that the marketing variables of price, advertising, new features and styling are related to the timing of discretionary replacements. Further, these data suggest that price has the most impact in accelerating replacement purchases.     

Understanding and Managing International Product Launch: A Comparison between Developed and Emerging Markets

With the developed market becoming increasingly saturated, companies have turned to the rapidly growing emerging market. To compete effectively in the global marketplace, firms need to develop global market competences, such as effective product launch. Although considerable efforts have been devoted to identifying principles of effective new product launch, most of the literature focuses on a single country (i.e., the domestic market) and provides little direct cross‐national comparison. The objective of this study is to provide a better understanding of the patterns of effective product launch in the developed and emerging markets. Drawing from the contingency perceptive, the authors propose a conceptual model that emphasizes the central role of tactical launch decisions and the need to cope with the internal and external constraints for maximum new product performance. The research model is tested on 284 new products launched in the United States and 97 in Taiwan. Although prior literature suggested certain elements of global product launch may be standardized for purposes of efficiencies, the empirical data from this study suggests that global launch requires some degree of customization. The insights of the findings reveal that while some tactical launch decisions are effective for both emerging and mature markets, some are detrimental to each other. For example, customer education preannouncement and promotion discount pricing strategy enhance new product performance and preemption preannouncement strategy upset consumers for both the Taiwan and U.S. market. However, there are some cross‐national differences. Emotional advertising strategy is generally appreciated in the U.S. market but not in the Taiwan market. For management practice, the findings suggest the distinct patterns of effective product launch for the emerging and mature market using the United States and Taiwan as examples.     

The Impact of Market Orientation, Product Advantage, and Launch Proficiency on New Product Performance and Organizational Performance

Some scholars have suggested recently that a market‐oriented culture leads to superior performance, at least in part, because of the new products that are developed and are brought to market. Others have reinforced this wisdom by revealing that a market‐oriented culture enhances organizational innovativeness and new product success, both of which in turn improve organizational performance. These scholars do not reveal, however, through which new product development (NPD) activities a market‐oriented culture is converted into superior performance. To determine how critical NPD activities are for a market‐oriented firm to achieve superior performance, our study uses data from 126 firms in The Netherlands to investigate the structural relationships among market orientation, new product advantage, the proficiency in new product launch activities, new product performance, and organizational performance. We focus on product advantage—because product benefits typically form the compelling reasons for customers to buy the new product—and on the launch proficiency—as the launch stage represents the most costly and risky part of the NPD process. Focusing on the launch stage also is relevant because it is only during the launch that it will become evident whether a market orientation has crystallized into a superior product in the eyes of the customer. The results provide evidence that a market orientation is related positively to product advantage and to the proficiency in market testing, launch budgeting, launch strategy, and launch tactics. Product advantage and the proficiency in launch tactics are related positively to new product performance, which itself is related positively to organizational performance. Market orientation has no direct relationship to new product performance and to organizational performance. An important implication of our study is that the impact of a market orientation on organizational performance is channeled through the effects of a market orientation on product advantage and launch proficiency; subsequently through the effects of product advantage and the proficiency in launch tactics on new product performance; and finally through the effect of new product performance on organizational performance. These channeling effects are much more subtle and complex than the direct relationship of market orientation on organizational performance previously assumed. Another implication of our study is that the impact of a market orientation on performance occurs through the launch activities rather than being pervasive to all organizational processes and activities. A reason for this finding may be that NPD is the one element of the marketing mix that predominantly is the responsibility of the firm, whereas promotion and distribution often are in control of organizations outside the firm (e.g., advertising agencies, major retailers) and whereas the channel or the market often dictates the price. Both implications provide ample opportunities for further research on market orientation and NPD.     

From Experience: Why Bad Things Happen to Good New Products

The rollout of a new product can be an exhilarating time for everyone involved in the development and launch effort. Just as a construction crew may meet at a local gathering place to hail the “topping-off” of a new home or office building, the development team—or possibly the entire company—may gather to celebrate a new product’s release. Launch meetings generate enthusiasm among the salespeople, and favorable reviews lead to an influx of inquiries from prospective customers. Despite this initial wave of enthusiasm, however, customer desire for the innovative new product may soon wane. Does this mean that everyone was wrong about the new product’s potential?Citing three examples of launches that followed this pattern, Neil Rackham addresses a key question for product development professionals: “Why should promising products from highly respected companies fail despite clear evidence of market need, strong marketing support, and real enthusiasm and energy from salespeople?” Based on his own experience in these three cases, as well as research investigations into elements of these and other launches, he rejects the conventional wisdom that the problem stems from resistance to change on the part of either the customers or the salespeople.He suggests that the problem rests with the way in which highly innovative products are launched to the salesforce, which in turn influences the manner in which the products are sold. He notes that the launch of an innovative product typically focuses on all the great new features the product offers. However, the new features that make the product so exciting may draw the salesperson’s attention away from the most important issue in the selling process: the customer’s needs. In other words, he suggests that the launch and the selling of innovative products tend to be product-centered instead of customer-centered, causing customer interest to fade as the selling process progresses.Rather than fill the salesforce with details about a product’s “bells and whistles,” he suggests that the launch should focus on describing the product in terms of the problems it solves for the customer. Similarly, rather than bombard customers with details about product features, he suggests that the salesperson should focus on asking questions. In this customer-centered approach, the product’s features are considered only in terms of the manner in which they meet the customer’s needs.