Product Replacement: Strategies for Simultaneous Product Deletion and Launch

John Saunders and David Jobber report results of their study of strategies for the simultaneous deletion and introduction of new products. Companies' long-term survival depends upon their replacement of existing products with new ones. Managers have to accomplish the task successfully. This article explores product replacement and examines the difference between successful and unsuccessful replacements. Qualitative research helps formulate a conceptual model of product replacement strategies and to set hypotheses. A quantitative study of American and British firms helps to test the hypotheses.     

Selecting Winning New Product Projects: Using the NewProd System

Separating probable winners from probable losers is the goal of the new product screening task, and Professor Robert G. Cooper has developed a model that does this with remarkable success. In this article, he reviews various approaches to new product screening and then presents the basics of the NewProd model. NewProd now has a history of use in industry that seems to be fulfilling its original research promise. Professor Cooper shows how managers can build their own screening models and outlines how such models can contribute in an important way to better new product selection decisions. Over the years, Professor Cooper has conducted a series of major research projects that have aimed at improvements in the new product process. Their hallmark has been managerial relevance and a sound theoretical foundation. This article, the third that Professor Cooper has published in JPIM , is in the same tradition.     

Performance effects of imitative entry

This article examines how waiting to imitate a product affects the performance of the imitator compared to the innovator. Specifically, we address two research questions. Under what conditions does imitation erode the advantage of the innovator? What strategies of imitators help overcome the innovator's advantage? Our main argument is that the increasing availability of information on the innovator's product increases the imitator's returns to waiting. With this increasing availability of information, imitators' products transition from those that are horizontally differentiated (products are similar in quality but differ in their attributes) to those that are vertically differentiated (products differ in quality). Thus, we hypothesize that shifts in the nature of competition over time from horizontal differentiation to vertical differentiation account for why the innovator's advantage is not preserved. Imitation timing simply reflects the uncertainty inherent in imitation efforts. One such uncertainty is the extent of product differentiation that the imitator can achieve. We develop several hypotheses that elaborate this basic intuition. We obtained detailed data on innovator‐imitator competition in the branded drug industry to test the hypotheses. All our hypotheses are supported. The main contribution of the article is in showing that the nature of product differentiation in product categories is endogenous to the imitative entry decisions of firms. Copyright © 2008 John Wiley & Sons, Ltd.     

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.     

Service growth in product firms: Past,present, and future

Service growth in product firms is one of the most active service research domains and is open to a variety of conceptualizations. This article provides a critical inquiry into the past, present, and future of the research domain. The evolution of the research on service growth is discussed in two phases: (1) setting the boundaries of the research domain, and (2) emergence of the conceptual foundation. We find that while research in this area has a well-established tradition in terms of output, theoretically it is still largely in a ‘nascent’ phase. Next, we highlight the contributions of the papers in this special section, emphasizing their challenges to prevailing assumptions in the research domain. We conclude by identifying, from the contributions to this special section, suggested themes for further research on service growth: the assessment of empirical evidence of the impact of service growth on firm performance, the role of merger & acquisitions in the service growth strategy, the exploration of single/multiple positions along the transition line, the process of adding or removing services, and expanding the context of service growth beyond product manufacturing firms.     

Priorities when selecting business partners for service innovation: The contingency role of product innovation

Firms increasingly engage in business-to-business cooperation to develop relevant innovations. Scholars have shown that firms can improve service innovation either by cooperating with suppliers or by cooperating with competitors. However, there is a dearth of research examining the relative importance of cooperating with suppliers and competitors to improve service innovation, and how this relative importance depends on embracing product innovation. Based on a cross-industry sample of 16,062 Spanish firms, this article addresses these research gaps, finding that firms can benefit from cooperating with both suppliers and competitors to boost service innovation, without prioritizing either. However, this article also shows that, if firms embrace product innovation, they should prioritize cooperating with competitors to boost service innovation.     

Product strategy and formal structure

This article presents the findings of clinically based research which investigated the relationship between strategy and formal structure at the product level in five diversified consumer packaged goods firms. The findings establish that this relationship is severely constrained. The article also suggests how firms ‘accommodate’ when unable to match organizational structure with product strategy.     

Continuity,Change, and New Product Performance: The Role of Stream Concentration*

Product development teams often face the challenge of designing radically new products that cater at the same time to the revealed tastes and expectations of existing customers. In new product development projects, this tension guides critical choices about continuity or change concerning product attributes and team composition. Research suggests these choices interact, but it is not clear whether they are complements or substitutes and if the level of change in one should match or not the level of change in the other. In this article, we examine the interaction between product attribute change, team change, and a new team-level factor, which we term stream concentration, as it captures differences among team members in terms of familiarity with the knowledge domain of the new product being developed. We measure stream concentration as team members’ prior NPD experience within a given set of products and assess its impacts on the management of change in new product development projects using longitudinal data from the music industry. We analyze 2621 new product development projects between 1962 and 2008 involving 34,265 distinct team members. Results show that stream concentration is a critical factor in new product development projects that, together with product attributes and team composition, affects new product performance. We discuss implications for research and practice.     

Improving new product development using big data: a case study of an electronics company

Big data is becoming more important to the new product development (NPD) efforts of global firms. Although the term of big data is not new, very few studies have investigated how firms can harvest big data to facilitate NPD. The purpose of this article is to present the means by which big data can be used to assist firms in NPD to shorten the time to market, improving customers’ product adoption and reducing costs. This research is based on a two-step approach. First, we identified and analysed three world-leading firms that have successfully integrated big data in supporting their NPD. Then, the observations from the firms were used to determine the principle involved in leveraging big data to reduce product development lead times and costs. Given the exploratory nature of the research objective, a participant-observation case study is adopted in which during a 6-month period a NPD project in a fast moving high-tech industry was investigated. This study provides empirical confirmation for the three principles to big data supported NPD: (a) Autonomy; (b) Connection; and (c) Ecosystem. It is termed the ACE principles which we believe represent a paradigm shift to help firms unlock the power of big data and make NPD faster and less costly. This article provides guideline to firms in harvesting big data to better support their NPD: it allows organisations to launch new products to market as quickly as possible; it helps organisations to determine the weaknesses of the product earlier in the development cycle; it allows functionalities to be added to a product that customers are willing to pay a premium for, while eliminating features they do not want; and it identifies and then prioritises customer needs for specific markets.     

Product Technology Transfer in the Upstream Supply Chain

This article addresses the transfer of new product technologies from outside the firm for integration into a new product system as part of a product development effort. Product technology transfer is a key activity in the complex process of new product development and is the fundamental link in the technology supply chain. Product technology transfer too often is dealt with in an ad‐hoc fashion. Purposeful management of the product technology transfer process leads to more effective transfers in terms of timeliness, cost, functional performance, and competence building. Better management of product technology transfer gives firms access to a greater variety of new technology options, improves a firm's ability to offer significantly differentiated products, deepens the firm's competitive competencies, and positively influences sustained product development success. The central objective of this article is to gain insight into product technology transfer so that companies can manage this process more successfully and so that researchers can investigate this critical activity further. This article describes the technology supply chain as a unique form of a supply chain that poses a set of managerial challenges and requirements distinguishing it from the more traditional component supply chain. Because a single product technology transfer project is the fundamental piece in the technology supply chain, understanding this piece well is key to leveraging the extended technology supply chain and to improving overall product development performance. This article integrates literatures on new product development, supply chain management, and technology management and builds on organizational theory to present a conceptual model of determinants of product technology transfer success. The core proposition is that product technology transfer effectiveness is greatest when companies carefully match (or “fit”) the type of technology to be transferred (the “technology uncertainty”) with the type of relationship between the technology supplier and recipient (the “interorganizational interaction”). A quite detailed framework characterizing technology uncertainty along the dimensions of technology novelty, complexity, and tacitness is presented to help in assessing the challenges associated with transferring a particular product technology. This article also considers detailed elements characterizing the interorganizational interactions between the technology source and recipient firms. This helps firms consider the appropriate means to facilitate the interfirm process of technology transfer. Overall, this article provides practical insight into characterizing technologies and into improving the product technology transfer process. This article also provides a strong theoretical foundation to aid future research on product technology transfer in the technology supply chain.     

Nine Tested Ways to Mislead Product Planners

Once concept development is completed, the next stage of the new product project has begun. It's time for more marketing research—good marketing research, because mistakes at this stage mean big money losses as well as job losses. This article sets out a number of marketing research mistakes that product planners should watch for.     

Platform-Driven Development of Product Families: Linking Theory with Practice

Firms in many industries increasingly are considering platform-based approaches to reduce complexity and to better leverage investments in new product development, manufacturing, and marketing. However, a clear gap in literature still exists when it comes to discussing the problems and risks related to implementing and managing product families and their underlying platforms. Using a multiple-case approach, we compare three technology-driven companies in their definition of platform-based product families, investigate their reasons for changing to platform-driven development, and analyze how they implemented platform thinking in their development process and which risks they encountered in the process of creating and managing platform-based product families. The field study shows that the companies involved in the study use a homogeneous concept of platform-based product families and that they have similar reasons to turn to platform thinking and to encounter comparable risks. However, the companies analyzed use mainly product architecture as a basis for their platforms (and ignore many of the platform types advocated in literature), while on the other hand they show divergent applications of the platform concept regarding the combinations of product families and market applications. Through this exploratory study, some important white spots in literature became evident as well. In the discussion part of this article these white spots are discussed and directions for future platform research are proposed. The article concludes that given its importance, platform-driven development of product families clearly deserves further research to provide more insight into strategic planning for new products.     

Social Networks for Innovation and New Product Development

In this article we first provide a brief introduction into social network analysis, focusing on the measures and approaches that are used in the empirical contributions in this special issue. Second, we discuss the role of social networks in new product development. Social networks are inherently multilevel; we consider four “levels”: networks inside a firm, networks that cross firm boundaries, networks between firms, and networks that reside outside of the firm. Third, we discuss these four levels and highlight some of the extant research. We summarize and position the eight papers in this special issue along these four levels. Together, we argue, these papers provide an interesting coverage of this burgeoning field.     

The new product development process: past evidence and future practical application, Part 1.

This article conducts a review of the research work into the process of product development and the way in which it has progressed over nearly forty years. It also shows that much of the work is unknown to many product development managers. The article goes on to show why the application of past research evidence has been restricted and describes attempts at translating the results into effective action.     

Design Is Everything?

This essay attempts to demarcate the industrial practice of product design and situate it in the context of academic research. The term product design presents definitional challenges, as it is used in practice in different ways, and even varies in usage regionally. For this article, product design is “conceiving and giving form to goods and services that address needs.” The activity of product design can be thought of as comprising several key decisions. Because the decisions of product design do not map cleanly to any one academic discipline, the subject has not garnered enough attention in any one field to develop fully its own academic identity. Scholarly research in product design has often been cultivated by the emergence of a methodological paradigm. While several such paradigms are in use, several others offer substantial promise.     

Controlling new product R&D projects

New products are critical to the success of most corporations. But managing the R&D projects that produce new products has proven to be a risky and tricky business. Theorists and practitioners claim that one of the major obstacles to higher new product output is the ‘tight’ control practices found in large corporations. The conventional wisdom argues that, to correct this, firms need to find ways ‘to loosen-up.’ But is that all there is to it? This article presents five findings for effectively controlling new product R&D projects. These findings emerged at the conclusion of an empirical research investigation into the formal and informal control practices that business unit managers use to control various new product R&D situations. The article concludes with several recommendations for those managers who want to control their new product R&D projects better.     

Critical path method for introducing an industrial product

New product development continues to be a vital evil for most organizations. Considerable attention has been directed toward this function in the consumer goods field but relatively little research has been directed toward this critical task for producers of industrial goods. Industrial goods marketing managers seem to agree that error at the announcement/ introduction phase of the new product development process is responsible for the greatest number of new product failures. This article suggests use of the critical path method to ensure success at this crucial stage.     

Commercializing new technologies: consumers' response to a new interface

Successful commercialization of new technologies is the riskiest and most rewarding form of new product development activity. New technologies are often commercialized using innovative interfaces that determine how consumers interact with a new product to obtain its functionality. Consumers' perception of uncertainty about the performance of a novel interface is a key issue in the acceptance of new products involving new interfaces. Specifically, when firms commercialize a new interface, they face two major challenges: First to identify the optimal functionality for the new interface, and second, to effectively communicate with consumers in order to reduce uncertainty about the performance of the new interface and increase adoption intentions. Despite the theoretical and managerial importance of research on consumers' response to a novel interface, very little empirical research has been conducted in this area. Building on prior research on new product development, human‐computer interaction, and consumer decision‐making, this article examines the factors that influence consumers' judgments of uncertainty about the performance of a new interface and consumers' adoption intentions. Specifically, we conducted an experiment to investigate the effect of the newness of the functionality of a new product and the effect of imagery on consumers' uncertainty about the performance of a novel interface and consumers' adoption intentions. Our results show that consumers perceive lower uncertainty about the performance of a new interface and higher intentions to adopt a new product when the new interface is introduced with a new (vs. pre‐existing) functionality. Furthermore, our results suggest that when a new interface is introduced with a new functionality, imagining the product in use increases consumers' uncertainty about the performance of the new interface and decreases their intention to adopt the new product. In contrast, when a new interface is introduced with a pre‐existing functionality, imagining the product in use decreases consumers' uncertainty about the performance of the new interface and increases their intention to adopt the new product. Our findings provide valuable guidelines for marketers in formulating new product development and communication strategies for new products involving a new interface. © 2002 Elsevier Science Inc. All rights reserved.     

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.     

Product variety and firm survival in the microcomputer software industry

This article provides an analysis of product variety and scope economies in the microcomputer software industry by using detailed firm‐level and product‐level information on firms' bundling of functionalities over application categories and computing platforms. We find that the management of product variety through the way different application categories are integrated in products and the platforms on which these products are offered can be as important as the significance of scope economies at the more aggregated firm level. Specifically, we find that there is little evidence of firm benefits from economies of scope in production, but there is substantial evidence that products benefit from economies of scope in consumption. In addition, we find that firms with products that encapsulate more application categories perform better, and those with products that cover more computing platforms perform worse. Finally, changes in product variety through new product introductions improve firm performance, but extensions to existing products hinder the performance of the firm and the product. We conclude that research in scope economies can benefit from a more detailed model of the evolution of product variety that includes data and analysis at the firm level and at the product level. Copyright © 2004 John Wiley & Sons, Ltd.