Brand Extension Effects and Core Attributes of Experience Product Franchises: A Bayesian Approach

An experience product's quality is difficult to assess prior to purchase, largely due to the limited availability of information before consumption. In the absence of perfect information, firms routinely use certain market signals to provide product quality information to consumers. Accordingly, drawing from signaling theory, this research aims to identify a collection of product core attributes in the form of signals and brand extension features to successfully manage experience product franchises. In doing so, we make use of Bayesian models with both deterministic effects via the use of predictor variables and probabilistic effects via the use of brand extension properties. Such models allow us to explore specifically the relative performance effects of the parent product of a franchise and of its extensions given the same level of product core attributes. The results of this study, based on the motion picture franchise data, indicate that there are critical product core attributes such as continuity, timing, and prior perception that collectively lead to successful successive generations. Furthermore, our study shows that brand features measured by the relationships between the parent product and its subsequent extensions at the infancy of the franchise are essential for the continuation of experience products. Similarly, our results indicate that the parent product's success on later extensions' performance starts to diminish, implying that the established “brand name” is what carries the franchise forward.     

Technological and Design Innovation Effects in Regional New Product Rollouts: A European Illustration

Firms are increasingly recognizing the importance of understanding regional dynamics and their effects on competitiveness. One such area that is gaining increased importance due to intra‐regional trade is the factors contributing to the successful rollouts of new products within a region. New product rollouts are complicated by nature but are further compounded by intricacies in the type of innovation (i.e., technological or design) being introduced into a region. Unfortunately, limited research has investigated this area. This study works to address this limitation by examining the per country performance effects of regional new product rollouts of technological and design innovations. The study examines the introduction of 14 technological innovations and 12 design innovations across 17 unique firms operating in eight European countries from 2000 to 2007. Specifically, this study attempts to show (1) an important role of the type of innovation on a firm's regional new product rollout strategy; (2) a relationship between national culture and the effectiveness of regional rollout strategies; and (3) an influence of economic openness on the type of innovation for regional new product rollout strategies. The results indicate that a longer regional new product rollout strategy is a more effective strategy for technological innovations, while a shorter regional new product rollout strategy is a more effective strategy for design innovations. The study also presents significant interaction effects in relation to the cultural dimensions of uncertainty avoidance and power distance as well as a significant effect of economic openness. Implications for practitioners and academics are presented.     

Prolific authors and institutions in leading international business journals

The science and practice of international business is advanced through scholarly contribution to the leading international business journals. Increased competition among academic institutions has led to increased emphasis on publication in the leading international business journals. Yet, little is known as to the answers to questions such as: (1) Who are the most prolific authors in the leading international business journals? and (2) Which educational institutions appear poised to lead international business scholarship? To examine these questions, the study examines scholarly work in international business over the past eleven years in six leading international business journals (i.e., Journal of International Business Studies, Management International Review, Journal of World Business, International Marketing Review, Journal of International Marketing, and International Business Review). Addressing these two research questions provides us with a more complete understanding of the authors and institutions most likely to influence the field of international business.     

Sustainability,Social Media Driven Open Innovation,and New Product Development Performance*

Sustainability and social media use in open innovation play important roles in a firm's new product development (NPD) process. This research examines, in conjunction, the roles of sustainability and social media driven inbound open innovation (SMOI) for a firm's NPD performance, and further, takes a more refined approach by differentiating between different types of SMOI activities. To this end, this research develops and tests a conceptual framework, which predicts that (1) a firm's sustainability orientation (SO) is positively associated with its NPD performance, (2) customer focus (CF) partially mediates the SO–NPD performance link, and (3) particular SMOI activities moderate the CF–NPD performance link. The empirical results, using data from the Product Development and Management Association (PDMA)'s comparative performance assessment study, provide support for most of the framework. Notably, this research documents a positive link between SO and NPD performance, as well as a partial mediating role of CF. The results further suggest that social media driven open innovation activities focused on gathering market insights enhance CF directly, while social media driven open innovation activities that garner technical expertise enhance the link between CF and NPD performance. This paper bridges the separate literatures on sustainability and open innovation, and contributes to the NPD research. The findings suggest that managers should take a strategic approach to sustainability and embed it in the NPD process. Furthermore, managers should manage social media based open innovation carefully to fully benefit the firm during the front end and back end of NPD.     

How often should a firm modify its products? A Bayesian analysis of automobile modification cycles

In this paper, we develop and estimate a series of Bayesian generalized gamma family and mixture family models of product modification timing that take into account both firm- and industry-specific effects that are time varying. Our models are capable of capturing non-standard modification behavior such as multi-modality and non-monotonicity in the hazard rates motivated by real data. Additionally, we explore the existence of latent groups with respect to product modification timing strategies. The models are estimated using Markov chain Monte Carlo (MCMC) methods using a panel data from the automotive industry that covers 50 years and contains 6598 car model-year observations for 683 car models. The results reveal the non-monotonic modification behavior over time and the existence of three latent groups. Larger product portfolios and higher industry product proliferation lengthen the modification time. Brand and competitive modification dynamism increases the frequency of major modifications.     

Financial constraints and international trade patterns

Growing empirical literature shows that financial constraints reduce the chance of exporting, suggesting that financial constraints are an important determinant of international trade patterns. In this aspect, I develop a model of international trade based on new trade theory with financial constraints and non-homothetic preferences. With these two modified assumptions, the main findings are i) financial constraints act as trade barriers, ii) the largest amount of trade is between countries that have healthier financial systems in terms of access to loans and iii) financial constraints can cause one way or zero trade. As a result, this paper provides a single framework able to account for all possible patterns (two-way, one-way, and no trade) within the same industry. All these findings have important policy implications for countries suffering from relatively poor financial systems.     

A longitudinal analysis of supplier involvement in buyers’ new product development: working relations,inter-dependence,co-innovation,and performance outcomes

Drawing on social exchange theory, this study develops a longitudinal theoretical framework of supplier participation in buyers’ new product development (NPD) activities. The study focuses on the longitudinal temporal dynamics of supplier involvement in buyers’ new product development and postulates that working relations and inter-dependence impact suppliers’ attitudes toward co-innovation and suppliers’ co-innovation behaviors. Applying this framework to a 10-year longitudinal dataset from the North American automotive industry, the drivers of the escalation of supplier involvement in buyers’ NPD over time and the effect of this involvement on innovation performance, buyer sales performance, and supplier sales performance are identified. The results indicate that buyer–supplier communication, suppliers’ anticipated long-term returns, suppliers’ trust of a buyer, and supplier–buyer inter-dependence all play a significant role in changing supplier attitudes toward co-innovation and supplier involvement in a buyer’s NPD. Further, the study also shows that supplier involvement in buyer new product development is mutually beneficial for both the buyer and the supplier as it increases performance of both parties. Performance returns are actually greater for suppliers than for buyers. As such, this study contributes to both relationship management and new product development literature streams, as well as providing practical direction to manufacturers as to how they can increase suppliers’ involvement in their NPD to benefit both parties.