New Product Development Practices of Industrial Marketers*

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

The Different Roles of Product Appearance in Consumer Choice*

Product design has been recognized as an opportunity for differential advantage in the market place. The appearance of a product influences consumer product choice in several ways. To help product development managers in optimizing the appearance of products, the present study identified the different ways in which the appearance of a product plays a role in consumer product evaluation and, hence, choice. In addition, the implications for product design of each role are listed, and managerial recommendations for optimizing the appearance of products are given. Based on a literature review, six different roles of product appearance for consumers are identified: (1) communication of aesthetic, (2) symbolic, (3) functional, and (4) ergonomic information; (5) attention drawing; and (6) categorization. A product's appearance can have aesthetic and symbolic value for consumers, can communicate functional characteristics and give a quality impression (functional value), and can communicate ease of use (ergonomic value). In addition, it can draw attention and can influence the ease of categorization of the product. In a large qualitative study (N=142) it was tested whether these roles indeed exist in consumers' process of product choice and whether they are sufficient to describe the way in which product appearance plays a role for consumers. In addition, qualitative insight into these roles was gained. After making a choice between two answering machines, subjects were interviewed about the reasons for their choice and the product information they used to form the judgments underlying their choice reasons. The six appearance roles indeed proved relevant for consumers and were sufficient to describe the influence of product appearance on product choice. The number of ways in which appearance played a role for consumers differed between 0 and 5; most subjects mentioned two different ways in which appearance influenced their product choice. The aesthetic and symbolic roles were mentioned most often. The preferred shape (e.g., rounded or angular), color, or size were found to differ depending on the way in which product appearance played a role for subjects. For example, bright colors may be valued from an aesthetic point of view but may diminish the impression of quality (i.e., functional value). This makes it difficult to optimize all roles and illustrates that the product value that is most important for consumers when purchasing a specific kind of product should be the starting point in the design of the product appearance. Furthermore, the influence of shape, color, or size on a certain kind of product value—aesthetic, symbolic, ergonomic, or functional—differed between subjects. One person may like a rounded shape, while another may prefer a rectangular shape. This means that the value of guidelines indicating how the perception of a specific kind of product value can be engendered by means of shape, color, and size is limited. This is especially the case for aesthetic and symbolic product value, which are very personal. Therefore it is recommended to test the performance of the appearance of a newly developed product on these six roles with the target group of consumers. Insight into the different ways in which appearance characteristics, such as form and color, may influence consumer choice will increase managers' awareness about how to use product appearance as a marketing tool. In addition, distinguishing these six appearance roles will help product development managers to optimize the product appearance better to market needs, as the roles have different and sometimes even conflicting implications for the design of the product appearance.     

Trust Formation in Collaborative New Product Development*

This research examines antecedents of trust formation in new product development partnerships and the effect of trust on performance. Trust is modeled as an outcome of communication behavior, shared problem‐solving, perceived fairness, the existence of conflicts during the development project, and partner egoism. The hypotheses are tested with data on 44 product development partnerships representing the perspective of the manufacturer. The findings suggest that communication behavior and fairness are positive contributors to trust. In contrast, conflicts during product development and perceived egoism of the partner appear to have a detrimental effect. High levels of trust were found to create the conditions for successful outcomes. A higher level of trust clearly differentiates between high‐ and low‐performing collaborative relationships in new product development. Trust also was found to be a powerful mediator, particularly as it relates to mitigating conflicts during such partnerships.     

Perspective: The Emergence of Product Design as a Field of Marketing Inquiry*

The authors present findings from an analysis of articles related to product design published in eight leading journals important to marketing thought. Based on this analysis, which covers the fourteen‐year period 1995–2008, the authors propose a conceptual model of product design and offer definitions for (a) product design and (b) the product design process. In addition, the authors provide insights into the nature of product design research during this time period, including analyses of publication trends and the relationship of product design research to related marketing topics. The essay concludes with suggestions for future research on product design.     

Linking Marketing and Engineering Product Design Decisions via Analytical Target Cascading*

Firms design products that appeal to consumers and are feasible to produce. The resulting marketing and engineering design goals are driven by consumer preferences and engineering capabilities, two issues that conveniently are addressed in isolation from one another. This convenient isolation, however, typically will not result in optimal product decisions when the two problems are interrelated. A method new to the marketing community, analytical target cascading (ATC), is adopted here to explore such interrelationships and to formalize the process of coordinating marketing and engineering design problems in a way that is proven to yield the joint optimal solution. The ATC model is built atop well‐established marketing methodologies, such as conjoint, discrete choice modeling and demand forecasting. The method is demonstrated in the design of dial‐readout household scales, using real conjoint choice data and a parametric engineering product design model. Results indicate that the most profitable achievable product can fall short of predictions based on marketing alone but well ahead of what engineering may produce based on original marketing target specifications. A number of extensions can be accomplished readily using techniques from the extant marketing and design optimization literature.     

Exploring New Product Development Project Review Practices*

Most organizations use new product development (NPD) processes that consist of activities and review points. Activities basically solve problems and gather and produce information about the viability of successfully completing the project. Interspersed between the development activities are review points where project information is reviewed and a decision is made to either go on to the next stage of the process, stop it prior to completion, or hold it until more information is gathered and a better decision can be made. The review points are for controlling risk, prioritizing projects, and allocating resources, and the review team typically is cross‐disciplinary, comprising senior managers from marketing, finance, research and development (R&D), or manufacturing. Over the past four decades, research has greatly advanced knowledge with respect to NPD activities; however, much less is known about review practices. For this reason, the present paper reports findings of a study on NPD project review practices from 425 Product Development & Management Association (PDMA) members. The focus is on three decision points in the NPD process common across organizations (i.e., initial screen, prior to development and testing, and prior to commercialization). In this paper, the number of (1) review points used, (2) review criteria, (3) decision makers on review committees and the proficiency with which various evaluation criteria are used are compared across incremental and radical projects and across functional areas (i.e., marketing, technical, financial). Furthermore, the associations between these NPD review practices and new product performance are examined. Selected results show that more review points are used for radical NPD projects than incremental ones, and this is related to a relatively lower rate of survival for radical projects. The findings also show that the number of criteria used to evaluate NPD projects increases as NPD projects progress and that the number of review team members grows over the stages, too. Surprisingly, the results reveal that more criteria are used to evaluate incremental NPD projects than radical ones. As expected, managers appear to more proficiently use evaluation criteria when making project continuation/termination decisions for incremental projects; they use these criteria less proficiently during the development of radical projects, precisely when proficiency is most critical. At each review point, technical criteria were found to be the most frequently used type for incremental projects, and financial criteria were the most commonly used type for radical ones. Importantly, only review proficiency is significantly associated with performance; the number of review points, review team size, and number of review criteria are not associated with new product performance. Furthermore, only the coefficient for proficiently using marketing criteria was significantly related to new product program performance; the proficiency of using financial and technical information has no association with performance. Finally, across the three focal review points of the NPD process in this study, only the coefficient for proficiency at the first review point, (i.e., the initial screen) is significantly greater than zero. The results are discussed with respect to research and managerial practice, and future research directions are offered.     

The Impact of Product Innovativeness on the Link between Development Speed and New Product Profitability*

A review of the literature reveals that the relationship between development speed and new product profitability is not as strong and straightforward as conventional wisdom suggests. A number of studies show positive results, others show mixed results, and some present no evidence of a relationship. In other words, the valence of the link between development speed and new product profitability is unclear at this time. Therefore, this study investigates whether or not speeding new products to market has positive or negative effects on new product profitability. Prior research shows that product innovativeness influences both development speed and new product profitability. This raises the question of whether increasing speed is equally successful in improving profitability across new products that differ in their degree of innovativeness. Therefore, this study also investigates the moderating effect of product innovativeness on the relationship between development speed and new product profitability. The results from a survey‐based study of 233 manufacturers of industrial products in the Netherlands reveal an inverted U‐shaped relationship between development speed and new product profitability. The findings also show that the optimal point is different for two new product types—product improvements and line additions—that vary in their innovativeness. These results provide an onset for the development of a decision tool that helps managers to determine how much to spend on accelerating the development of individual new products and how they should allocate that spending across products in their new product portfolio.     

Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy*

This article empirically explores the nature of the role of design in the new product development process. The investigation adopts a multiple case study methodology. Data were collected through a six‐month interview program carried out with mid‐size to large U.K. manufacturing companies. The researchers articulate the scope and detailed nature of actions undertaken by design across all phases of the new product development process. Design functional, integration, and leadership actions are unraveled from the data. A taxonomy characterizing three roles for design in new product development is developed and explained. In the first role, design is explored as a functional specialism. The second categorization develops the role of design as part of a multifunctional team. The third role depicts the designer as process leader. Detailed actions and skills associated with each role are discussed and illustrated. Contextual factors explaining and influencing each design role are unraveled. These are articulated as speed of development process, innovativeness of the product development effort, and use of external design agencies. The implications of these findings for the development of design skills and capabilities are discussed in terms of recruitment, training, and educational policies.     

New Industrial Product Design and Evaluation Using Multiattribute Value Analysis

Increasingly, the design of successful new industrial products is related to careful market assessment. Traditionally, managers and researchers have studied their markets by examining a small number of product attributes that are common across a range of informed respondents. In many ways, these techniques fail to meet the challenges posed by today's often heterogeneous, highly competitive, fast moving industrial markets. Ralph Keeney and Gary Lilien introduce us to a technique they call multiattribute value analysis, both describing the procedure and describing a comprehensive example. Their approach introduces considerable flexibility to the process of market assessment. Technically, it permits the evaluation of many more attributes, value tradeoffs, and synergies among attributes than do more traditional methods. In addition, it permits nonlinear evaluation functions that may be idiosyncratic to the individual. Practically, their approach, illustrated with a detailed case application, is shown to have significant potential for aiding product design decisions.     

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

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

Design of Robust New Products under Variability: Marketing Meets Design*

In designing consumer durables such as appliances and power tools, it is important to account for variations in product performance across different usage situations and conditions. Since the specific usage of the product and the usage conditions can vary, the resultant variations in product performance also can impact consumer preferences for the product. Therefore, any new product that is designed should be robust to these variations—both in product performances and consumer preferences. This article refers to a robust product design as a design that has (1) the best possible (engineering and market) performance under the worst‐case variations and (2) the least possible sensitivity in its performance under the variations. Achieving these robustness criteria, however, implies consideration of a large number of design factors across multiple functions. This article's objectives are (1) to provide a tutorial on how variations in product performance and consumer preferences can be incorporated in the generation and comparison of design alternatives and (2) to apply a multi‐objective genetic algorithm (MOGA) that incorporates multifunction criteria in order to identify better designs while incorporating the robustness criteria in the selection process. Since the robustness criteria is based on variations in engineering performance as well as consumer preferences, the identified designs are robust and optimal from different functional perspectives, a significant advantage over extant approaches that do not consider robustness issues from multifunction perspectives. This study's approach is particularly useful for product managers and product development teams, who are charged with developing prototypes. They may find the approach helpful for obtaining customers' buy‐in as well as internal buy‐in early on in the product development cycle and thereby for reducing the cost and time involved in developing prototypes. This study's approach and its usefulness are illustrated using a case‐study application of prototype development for a handheld power tool.     

The Moderating Effect of Environmental Uncertainty on New Product Development and Time Efficiency*

This empirical study examines the influence of environmental uncertainty on industrial product innovation. The present study addresses what is believed to be a shortcoming in the new product development literature and explores potential effects of environmental uncertainty on the development process, project organization, and on project timeliness with a sample of development projects in two countries, Canada and Australia. When looking at the combined sample of 182 completed projects, this study finds that the perceived market‐related project environment has a direct and positive impact on time efficiency. Further, this research finds that a higher degree of technological uncertainty moderates the relationship between development process, project organization and time efficiency. Consequently, innovating companies may benefit by adapting some of their development approaches to different environmental conditions and to varying degrees of uncertainty. However, when examining country‐specific effects, the results change quite significantly. In particular, the findings indicate that environmental uncertainty in the Canadian sample neither directly impacts time efficiency, nor does it have any moderating effect. Instead, technical proficiency in the development process, project team organization, and process compression appear to be viable strategies to increase time‐efficient development. In contrast, the results of the Australian study suggest that perceived market and technological uncertainty impact time efficiency. In particular, under conditions of technological unpredictability, project team organization increases time efficiency, whereas process compression appears to decrease time‐efficient product development. However, process compression seems to be a viable strategy in environments characterized by lower technological uncertainty. The results also point to the importance of disaggregating data when studying product development processes across countries.     

Increasing Learning and Time Efficiency in Interorganizational New Product Development Teams*

Despite the growing popularity of new product development across organizational boundaries, the processes, mechanisms, or dynamics that leverage performance in interorganizational (I‐O) product development teams are not well understood. Such teams are staffed with individuals drawn from the partnering firms and are relied on to develop successful new products while at the same time enhancing mutual learning and reducing development time. However, these collaborations can encounter difficulties when partners from different corporate cultures and thought worlds must coordinate and depend on one another and often lead to disappointing performance. To facilitate collaboration, the creation of a safe, supportive, challenging, and engaging environment is particularly important for enabling productive collaborative I‐O teamwork and is essential for learning and time efficient product development. This research develops and tests a model of proposed factors to increase both learning and time efficiency on I‐O new product teams. It is argued that specific behaviors (caring), beliefs (psychological safety), task‐related processes (shared problem solving), and governance mechanisms (clear management direction) create a positive climate that increases learning and time efficiency on I‐O teams. Results of an empirical study of 50 collaborative new product development projects indicate that (1) shared problem solving and caring behavior support both learning and time efficiency on I‐O teams, (2) team psychological safety is positively related to learning, (3) management direction is positively associated with time efficiency, and (4) shared problem solving is more strongly related to both performance dimensions than are the other factors. The factors supporting time efficiency are slightly different from those that foster learning. The relative importance of these factors also differs considerably for both performance aspects. Overall, this study contributes to a better understanding of the factors that facilitate a favorable environment for productive collaboration on I‐O teams, which go beyond contracts or top‐management supervision. Establishing such an environment can help to balance management concerns and promote the success of I‐O teams. The significance of the results is elevated by the fragility of collaborative ventures and their potential for failure, when firms with different organizational cultures, thought worlds, objectives, and intentions increasingly decide to work across organizational boundaries for the development of new products.     

A Model of Supplier Integration into New Product Development*

In many industries, firms are looking for ways to cut concept‐to‐customer development time, to improve quality, and to reduce the cost of new products. One approach shown to be successful in Japanese organizations involves the integration of material suppliers early in the new product development cycle. This involvement may range from simple consultation with suppliers on design ideas to making suppliers fully responsible for the design of components or systems they will supply. While prior research shows the benefit of using this approach, execution remains a problem. The processes for identifying and integrating suppliers into the new product development (NPD) process in North American organizations are not understood well. This problem is compounded by the fact that design team members often are reluctant to listen to the technology and cost ideas made by suppliers in new product development efforts. We suggest a model of the key activities required for successful supplier integration into NPD projects, based on case studies with 17 Japanese and American manufacturing organizations. The model is validated using data from a survey of purchasing executives in global corporations with at least one successful and one unsuccessful supplier integration experience. The results suggest that (1) increased knowledge of a supplier is more likely to result in greater information sharing and involvement of the supplier in the product development process; (2) sharing of technology information results in higher levels of supplier involvement and improved outcomes; (3) supplier involvement on teams generally results in a higher achievement of NPD team goals; (4) in cases when technology uncertainty is present, suppliers and buyers are more likely to share information on NPD teams; and (5) the problems associated with technology uncertainty can be mitigated by greater use of technology sharing and direct supplier participation on new product development teams. A supplier's participation as a true member of a new product development team seems to result in the highest level of benefits, especially in cases when a technology is in its formative stages.     

Using Exploratory and Exploitative Market Learning for New Product Development*

While the need for research on the market‐learning efforts of a firm in relation to its new product development is continuously emphasized, the empirical results on this issue reported so far have been mixed. The current study contends that the inconclusive nature of the empirical evidence is mostly due to the existence of different dimensions of organizational market learning—exploratory and exploitative—and to possible different routes by which these learning dimensions are linked to new product performance. More specifically, this study argues that exploratory market learning contributes to the differentiation of the new product because it involves the firm's learning about uncertain and new opportunities through the acquisition of knowledge distant from existing organizational skills and experiences. By contrast, this study posits that exploitative market learning enhances cost efficiency in developing new products as it aims to best use the currently available market information that is closely related to existing organizational experience. This study provides empirical support for this two‐dimensional scheme of organizational market learning and its consequent effects on two components of new product advantage: new product differentiation and cost efficiency. Further, given that the effectiveness of firms' strategic efforts is contingent upon the nature of the market environment, the current study examines the moderating effects of environmental dynamism and market competitiveness for this market learning—new product advantage relationship. This study is based on survey data from 157 manufacturing firms in China that encompass various industries. The empirical findings support the two‐dimensional market learning efforts that increase new product differentiation and cost efficiency, respectively. The study confirms that exploratory market learning becomes more effective under a turbulent market environment and that exploitative market learning is more contributive when competitive intensity is high. It also suggests that because of their differential direct and moderating effects on new product advantage either exploratory or exploitative market learning may not be used exclusively, but the two should be implemented in parallel. Such learning implementations will help to secure both the feature and cost‐based new product advantage components and will consequently lead to the new product success. The current study attempts to contribute to greater clarity and better understanding of how market learning influences new product success as it theoretically identifies and empirically validates the two forms of new product advantage as the conceptual mediator between market learning and new product performance.     

Embodied Cognition and New Product Design: Changing Product Form to Influence Brand Categorization*

This article explains how embodied cognition and perceptual symbol systems enable product designers to influence consumers by communicating key perceptual features through subtle changes in product design elements. In this way, managers can change perceptual design elements to support line extension strategies. More specifically, design changes can be used as a tool to help evolve consumer perceptions of a product's uses and brand category membership. The role of perceptual symbols in product design is illustrated by a well‐known off‐road motorbike brand that planned to extend into the street motorbike segment. In order to facilitate consumer acceptance of a street motorbike from this off‐road brand, the firm gradually introduced models containing an increasing number of elements of street motorbikes over a period of several years. The authors use this example to show how typical design elements of the target product category can be effectively integrated with design elements of the current product category by simply modifying key characteristics of product‐shape attributes. This process is further tested in an experiment, where motorbike models differing slightly in key product features (e.g., product shape) were rated on their resemblance to street or off‐road motorbikes. The results show a strong effect of these design changes on brand‐category membership. Managerial implications of this approach and future research directions are discussed.     

The Impact of User‐Oriented Design on New Product Development: An Examination of Fundamental Relationships*

Design offers a potent way to position and to differentiate products and can play a significant role in their success. In many ways it is the focus on deep understanding of the customer or user—what may be termed user‐oriented design (UOD)—that transforms a bundle of technology with the ability to provide functionality into a “product” that people desire to interact with and from which they derive benefits. Even though the importance of this type of design is gaining recognition, several fundamental relationships between user‐oriented design contributions and the new product development (NPD) process and outcomes (i.e., product) remain unresearched, although they are assumed. This article examines the fundamental relationships underlying the incorporation of a user orientation into the NPD process. The discussion is organized around UOD's impact in terms of enhancing collaborative new product development (process oriented), improving idea generation (process oriented), producing superior product or service solutions (product oriented), and facilitating product appropriateness and adoption (product oriented). Each of these is developed and presented in the form of a research proposition relating to the impact of user‐oriented design on product development. The fundamental relationships articulated concerning UOD's impact on NPD form a conceptual framework for this approach to product design and development. For practitioners, the article suggests how user‐oriented design can improve NPD through its more grounded and comprehensive approach, along with the elevated appreciation of design challenges and heightened sense of possibilities for a product being developed. For scholars, the article identifies four important areas for UOD research. In addition to the rich avenues offered for research by each of these, the framework presented provides a foundation for further study as well as the development of new measures and tools for enhancing NPD efforts.     

Attribution Biases in the Evaluation of New Product Development Team Members*

Managers are often concerned with the potential negative reputation impact of being assigned to a new product development project. Social psychology theories, and in particular the group attribution error theory, suggest that their worries might be justified, with individual team members being evaluated on the basis of the overall project performance, without regard for the processes by which the team outcome was reached. The objective of this paper is to empirically test for the existence of such biases in the evaluation of new product development team members. For this purpose, three independent experiments based on scenarios test the extent to which the group attribution error is at play in the evaluation of new product development team members and the extent to which it can be removed. Overall, this paper indicates that this bias does indeed affect the evaluation of new product development team members as well as decisions based on these evaluations. In the studies presented in this paper, analysis of variance showed that subjects inferred that team members' attitudes were consistent with the decision made and failed to adjust adequately for the decision rule used. Subjects then used these summary judgments as the basis for deciding on reward allocations and making competence attributions about the team members. In Study 1 , the decision rule used was either a vote or a team leader decision, and therefore the bias might have been explained by the lack of information available. Study 2 , however, provided unambiguous information about team members' positions, yet subjects did not adequately take this information into account. Study 3 replicated these results with experienced new product team managers, suggesting that theses biases are likely to be at play in the workplace. Moreover, subjects in Studies 2 and 3 felt quite confident that their judgments were being fair, even in the cases where these judgments truly were not, which suggests a lack of awareness of the bias on their part. The robustness of this bias should be cause for concerns for managers working in new product development teams or involved in the evaluation of the performance of such teams. The studies conducted in this paper suggest that team members can get unfairly rewarded or punished for decisions over which they have little or no control and that their reputation can also get affected by these decisions. Moreover, the fact that the group attribution error affected evaluations even in the case where experienced participants had specific information about team members' positions suggests that this bias will not be easy to remove.     

The Effect of Product Design Activities on Commercial Success Levels of New Industrial Products

Previous research has investigated the link between product success and key steps in the new products development process. Because the design/development phase of this process uses large proportions of resources, it has been carefully scrutinized. Nevertheless, the impact on new product success levels of an important aspect of this phase—the technically oriented design steps—has not been comprehensively examined and has been neglected in favor of such nontechnical dimensions as the marketing/R&D interface problem. Richard Hise, Larry O'Neal, James McNeal and A. Parasuraman report the results of a study of 195 new industrial products. They conclude that new product developers may jeopardize the success potentials of new industrial products by not performing specific design steps and by instituting an incomplete design/development agenda.