Market Orientation and the New Product Paradox

The extant literature shows that the strength of the market orientation–performance relationship decays as the terminal measure of performance shifts from new product success to profitability to market share. As Day (1999) concluded, a broader nomological inquiry is needed to more fully understand the nature and limits of market orientation's effects. This suggests that a broader nomological inquiry is needed to fully understand the nature and limits of market orientation's effects.
Utilizing a national sample of marketing executives, the present study's purpose is to build a fuller understanding of the effects of market orientation on firm performance. Its structural equations model includes measures of new product success, profitability, and market share.
The research reinforces a strong positive relationship between market orientation and new product success. The expanded nomological network under study, however, implies barriers to market orientation's effectiveness. First, market-orientation-inspired increases in the priority firms place on "breakthrough" learning without commensurate increases in the priority placed on "breakthrough" innovation capabilities can boomerang and negatively impact new product success. Second, market-orientation-inspired new product development programs that are unable to increase market share can negatively impact profitability. These gatekeepers to the success of market orientation underscore the need for firms to coordinate a strong market orientation with resources and capabilities that increase the effectiveness of the marketing function. Without such coordination, the positive effect of market orientation on new product success may be limited to incremental innovations, and the overall effect of successful new products on profitability may be limited.     

The Relative Importance of Interfirm Relationships and Knowledge Transfer for New Product Development Success*

The relationship and network literature has primarily focused on particular partner types, for example, buyer–supplier relationships or competitor interaction. This article explores the nature and relative importance of different types of interfirm relationships for new product development (NPD) success. The underlying premise of the study is that not only the type of interfirm relationships but also the combination of relationships are important for NPD performance. The interaction with a specific type of partner is expected to influence innovative performance by means of appropriate knowledge transfer. Varying needs for external knowledge, and thus types of relationships, are observed depending on the particular stages in the NPD process, the character of the knowledge base of the firm, and the industrial conditions. The absorption of external knowledge is discussed using the degree of redundancy in knowledge, which is defined as the degree of overlap in the knowledge base of the sender and the recipient of knowledge. Hence, the degree of redundancy has direct implications for the ease and, hence, use of knowledge shared with an external partner. The article is based on data from the Know for Innovation survey on innovative activities among European firms, which was carried out in 2000 in seven European countries covering five industries. The article explores the extent of use of external relationships in collaborative product development and finds that customers are involved more frequently in joint development efforts. Second, the industry association of the most important relationship is studied, and the results show that firms tend to partner with firms from their own industry. The danger in this approach is that firms from their own industry tend to contribute similar knowledge, which ultimately may endanger the creation of new knowledge and therefore more radical product developments. The analyses combine the finding that relationships with customers are used most frequently at both early and late stages of the product development process, with a second and more contradictory finding that at the same time customer relationships have a negative impact on innovative success. Moreover, the combination of customers, with both universities and competitors, has a significant negative effect on innovative performance. The potential causes of this apparent paradox can be narrowed down to two: (1) the average customer may be unable to articulate needs for advanced technology‐based products; and (2) the average customer may be unable to conceptualize ideas beyond the realm of his or her own experience. Based on this evidence the article cautions product development managers to think explicitly about what certain customers can contribute with and, more importantly, to match this contribution directly with their own sense of what direction product development should go in the future. Finally, the role of complementary as well as supplementary knowledge is investigated for innovative success finding that sharing of supplementary knowledge with external partners in NPD leads to a positive effect on innovative performance. The article is concluded by a discussion of the implication of this finding for building knowledge within the firm and for selecting external partners for NPD.     

The Role of Market Information in New Product Success/Failure

Although no single variable holds the key to new product performance, many of the widely recognized success factors share a common thread: the processing of market information. Understanding customer wants and needs ultimately comes down to a company's capabilities for gathering and using market information. And another well-acknowledged success factor the integration of marketing, R&D, and manufacturing focuses on the sharing of information. In other words, a firm's effectiveness in market information processing—the gathering, sharing, and use of market information—plays a pivotal role in determining the success or failure of its new products. Brian D. Ottum and William L. Moore describe the results of a study that examines the relationship between market information processing and new product success. They also explore the organizational factors that facilitate successful processing of market information, and thus offer ideas for better managing the development of new products. The respondents—marketing, R&D, and manufacturing managers from Utah-based computer and medical device manufacturers—provided information about 58 new products, including equal numbers of successes and failures. The survey responses reveal strong relationships between product success and market information processing, with success most closely linked to information use. In other words, the gathering and sharing of information are important, but only if the information is used effectively. In 80 percent of the product successes studied, the respondents ultimately possessed and used a greater than average amount of market information. And in 75 percent of the failures, the respondents knew less than average about the market at project inception, and gathered or used less than the average amount of market information during the project. For the projects in this study, the integration of marketing, R&D, and manufacturing contributed not only to the sharing and use of information, but also to overall project success. However, the results of the study suggest that the way in which a project is organized plays only an indirect role in determining new product success—most likely by improving the processing of market information. From a managerial perspective, the most important variables identified in the study are market information shared, market information used, and financial success.     

Responsive and Proactive Market Orientation and New‐Product Success*

What is the relationship between market orientation and new‐product success? This important question has not been examined adequately to date because the concept of market orientation has been measured too narrowly. The concept of market orientation implies both responsive market orientation, which addresses the expressed needs of customers, and proactive market orientation, which addresses the latent needs of customers—that is, opportunities for customer value of which the customer is unaware. In the numerous market orientation–performance studies to date, the measure of market orientation has consisted virtually entirely of behaviors related to satisfying customers' expressed needs rather than satisfying their latent needs as well. The present study extends the measurement of market orientation to match the full scope of the concept—to measure both responsive market orientation and proactive market orientation. Using data from a sample of technologically diverse businesses, the present study develops a measure of proactive market orientation, refines the extant measure of responsive market orientation, and analyzes the relationship of a business's responsive and proactive market orientation to its new‐product success. The study findings imply that for any business to create and to sustain new‐product success, a responsive market orientation is not sufficient and, thus, that a proactive market orientation plays a very important positive role in a business's new‐product success. These findings make intuitive sense. For if in developing its new products a business relies solely on what customers state as their new product needs, the business is very vulnerable economically. Such a business is vulnerable not only for relying on customers' best guesses for new products, many or most of which may have little long‐term economic value for either party, but also to competitors' parallel new product responses and the inevitable resulting price competition. A business that relies solely on customers' expressed needs to develop its new products creates no new insights into value‐adding opportunities for the customer and thereby creates little or no customer dependence and foundation for customer loyalty. The important role for proactive market orientation in new‐product success is intuitively obvious—and is supported empirically in this study.     

The Vital Role of Problem‐Solving Competence in New Product Success*

Problem solving, a process of seeking, defining, evaluating, and implementing the solutions, is considered a converter that can translate organizational inputs into valuable product and service outputs. A key challenge for the product innovation community is to answer questions about how knowledge competence and problem‐solving competence develop and sustain competitive advantage. The objective of this study is to theoretically examine and empirically test an existing assumption that problem‐solving competence is an important variable connecting market knowledge competence with new product performance. New product projects from 396 firms in the high‐technology zones in China were used to test the study's theoretical model. The results first indicate that problem‐solving speed and creativity matter in new product innovation performance by playing mediator roles between market knowledge competence and positional advantage, which in turn sustains superior performance. This new insight suggest that mere generation of market knowledge and having a marketing–research and development (R&D) interface will not affect new product performance unless project members have the ability to use the information and to interact to identify and solve complex problems speedily and creatively. Second, these results suggest that different market knowledge competences (customers, competitors, and interactions between marketing and R&D) have distinct impacts on problem‐solving speed and creativity (positive, negative, or none), which underscore the need to embrace a more fine‐grained notion of market knowledge competence. The results also reveal that the relative importance of some of these relationships depends on the perceived level of turbulence in the environment. First, competitor knowledge competence decreases problem‐solving speed when perceived environmental turbulence is low but enhances problem‐solving speed when perceived turbulence is high. Second, competitor knowledge competence has a positive relationship with new product performance when the environmental turbulence is high but no relationship when the environmental turbulence is low. Third, the positive relationship between problem‐solving speed and product advantage is stronger when the perceived environmental turbulence is high than when it is low, which implies that problem solving is more important for creating product advantage when environmental turbulence is high and change is fast and unpredictable. Fourth, the negative relationship between problem‐solving speed and new product performance is stronger when the perceived environmental turbulence is high than when it is low, which means that problem‐solving speed is more harmful for new product performance when change is fast and unpredictable. And fifth, the positive relationship between product quality and new product performance is stronger when perceived environmental turbulence is low than when it is high, which implies that product quality may more likely lead to new product performance when the environment is stable and changes are easy to predict, analyze, and comprehend.     

The Impact of Organizational Integration and Product Development Proficiency on Market Success

This research investigates three major hypotheses important to new product market success: the greater organizational integration during the development of new products, the greater the market success; the greater organizational integration during the development of new products, the greater new product development proficiency; and the greater new product development proficiency, the greater the market success. “Organizational integration” is defined as the degree of cooperation and communication between internal and external NPD “support” groups and NPD teams. “NPD process proficiency” is defined as how well new product development stages and the new product development process as a whole is performed. “New product market success” is represented by four measures: the degree to which profits and sales exceeded or fell short of what was expected, and the degree to which the new product was perceived to exceed or fall short of expectations related to entering existing and new markets. Information was obtained concerning the most and least successful new products of U.S. firms in the medical instruments, the electrical equipment, and the heavy construction equipment industries. The field survey approach was utilized in which surveys were mailed to recipients such as new product development managers who already had been designated by executives of the sample firms. Several important findings were uncovered during this research. Overall organizational integration was found to be significantly associated with new product market success. Internal integration, the coordination between new product development teams and functional departments, was found to be significantly related to product market success. A significant relationship between new product development proficiency during the NPD “post-launch stage” and the degree of integration between an NPD team and external NPD organizations, such as customers and suppliers, was detected. During the post-launch stage, new product development proficiency also was found to be significantly related to new product market success. These findings suggest several important implications for new product development managers and scholars.     

The Roles of Marketing and Industrial Design in Discontinuous New Product Development*

Radical or “discontinuous” products based on new technological breakthroughs are playing an ever‐increasing role in the success of firms. However, little research has been conducted that investigates the roles of marketing and industrial design (ID) in the development of these types of products. Further, past research has tended to overlook the role that industrial design, and the impact of the marketing‐industrial design interaction, can have on the development of discontinuous new products. Frequently, the term design is used broadly or is equated with engineering; thus, while the marketing–research and development (R&D) interaction is studied, the marketing–ID as well as the industrial design–R&D relationships are not considered. This article examines the roles of marketing and industrial design in the product development process for discontinuous innovations. Specifically, questions concerning how and the degree to which marketing and industrial design are integrated into the development process are investigated. The investigation employs multiple methods, or triangulation, in order to secure an in‐depth understanding of the roles of these disciplines. In the course of examining these questions, key factors influencing industrial design and marketing involvement are identified and preliminary models are examined. The research, which was conducted in two phases, employed a mixed‐method, multiple sample design. The methods used included a survey, field observation study, and depth‐interviewing. Data were collected from three different samples: R&D managers, project team members (including personnel from various disciplines—marketing, R&D, industrial design, engineering, etc.), and industrial design managers. The use of the different data sources and sampling of various groups of managers was employed in order to provide a rich context for investigating the research questions of interest. In addition, a preliminary analysis of factors (e.g., degree of product discontinuity, product innovation objectives, process discontinuity, process formality) identified in the first phase was conducted, and these relationships were explored further in the second phase of the research. Findings across the two phases of this research suggest that the development of discontinuous new products involves a process that is different from more conventional new product development—particularly as it concerns the roles of marketing and industrial design. The high degree of discontinuity inherent in such projects, along with the strong R&D orientation often surrounding them, results in delayed involvement of marketing and ID, as well as altering their roles in the new product development (NPD) process. Factors such as the degree of product discontinuity (DPD), process discontinuity (PCD), and process formality (PF) seemed to exert a differential influence on the involvement of marketing and ID. Although their roles and involvement are altered in discontinuous new product development, this research suggests that marketing and ID roles in this context involve increased challenges with respect to validation of key assumptions and product application directions. Additionally, managers operating in this development context need to explicitly consider the influence of factors such as discontinuity level in undertaking NPD projects with respect to how it affects the execution of industrial design and marketing activities.     

The Impact of Product Portfolio Strategy on Financial Performance: The Roles of Product Development and Market Entry Decisions

Innovation is one of the most important issues facing business today. The major difficulty in managing innovation is that managers must do so against a constantly shifting backdrop as technologies, competitors, and markets constantly evolve. Managers determine the product portfolio through key decisions about product development and market entry. Key strategic questions are what portfolio strategies provide the greatest reward. The purpose of this study is to understand the relative financial values of each component of a product portfolio. Specifically, the paper examines the short‐term and long‐term financial impacts of product development strategy and market entry strategy. These strategies reflect two critical tensions that must be balanced in product portfolio decision making and essentially determine a firm's product portfolio. In doing so, the paper also investigates how a firm's capabilities drive each component of a product portfolio. From the empirical analyses in the context of the biomedical device industry, the paper found important insights regarding product portfolio strategies. First, a large product portfolio helps a firm's financial performance. In particular, the pioneering new products have strongest impacts on short‐term performances, and nonpioneering mature products do not provide significant contribution. Second, the results indicate a persistent first‐mover advantage. The first‐to‐market new products yield not only an immediate effect, but also persistent long‐term effects, suggesting that it is important to be first in the market even though there may be short‐term losses. Third, the results suggest the need to balance between “mature” and “new” products. Also, firms need to balance “first‐to‐market” and “late‐entered” products. Because a new or pioneering product requires more resource, it may hurt other products in the portfolio. Thus, without support from mature or follower products, new products and pioneering products alone may not increase firm sales or profit. Fourth, from a long‐term perspective, the paper found that the financial market only rewards a firm's overall capability to deliver new products first in the marketplace. Thus, short‐term performance is mainly driven by product‐level innovativeness, whereas firm‐level innovativeness enhances forward‐looking long‐term performance. Fifth, the paper also found that pioneering new products are driven by integrating both primary and complementary technological capabilities. And nonpioneering new products are mainly driven by the capabilities in primary technology domain. These results provide important insight into the relative value and timing of return on investment in radical versus incremental innovation and alternative market entry strategies. By understanding the performance trade‐offs of these different factors in the short and long term, one can develop better guidelines for optimizing innovation strategies, and their dependence on both external and internal environmental conditions.     

Customization of Product Technology and International New Product Success: Mediating Effects of New Product Development and Rollout Timeliness

Offering a standardized product for different country markets may enable companies to accomplish fast product development and multicountry rollout, whereas also enjoying substantial cost benefits. However, not all manufacturers serving multicountry markets can adopt a standardized product strategy. Where technological requirements, standards, and approval procedures vary substantially across countries, manufacturers invariably must adapt the product's technology to fit individual country requirements. Extensive customization may lead to longer new product development and rollout times and increase the likelihood of delays in the entire project, hence adversely affecting overall new product outcome. This study examines the relationships between product technology customization, the timeliness in completion of both the new product development effort and international market launches, and new product success. The study that reports on new product launches across European markets, is based on personal interviews with senior managers in 30 multinational companies. The authors show that timeliness in new product development and timeliness in rolling out the new product into different country markets mediate the link between product technology customization and overall new product success. Customization of product technology increases the likelihood of delays in the completion of new product development projects and multicountry rollout. Additionally, the timeliness in new product development mediates the relationship between product technology customization and timeliness in international new product rollout. This means that if the NPD project runs behind schedule, a fault‐free multicountry rollout program becomes increasingly unlikely, as problems encountered during product development spillover into the rollout program. The results imply that international product managers must assign greater priority to assessing the relative advantages of customizing new product technology and to consider the timing implications for both the NPD effort and subsequent rollout. Managers must set realistic schedules and allocate sufficient resources to ensure both tasks can be accomplished within planned time scales. Finally, managers should not underestimate the complexities and time involved in customizing new product technologies, including the completion of disparate country technical approval procedures.     

The Role of Market and Technical Information Generation in New Product Development

Firms are investing an increasing amount of time and resources to gather information about market and technology in new product development (NPD). Yet there is a lack of consistent understanding of whether such costly information generation activities can improve product outcomes. More importantly, it is unclear how the benefit of market information and technical information generation may differ and how they may jointly impact new product performance. This study examines the role of market and technical information generation in NPD in three ways: (1) It contrasts the effects of market and technical information generation on product outcomes; (2) it identifies conditions that moderate the effects of market and technical information generation and further investigates how the moderating effects differ for these two types of activities; and (3) it examines the joint effect of market and technical information generation to understand potential synergies between them. Using survey data at the NPD project level, we find that market information generation has an inverted U‐shaped effect on new product advantage, whereas the effect of technical information generation follows a U‐shape. Furthermore, these effects are moderated differently by two conditions: a firm’s R&D intensity that influences NPD projects’ need for different types of information, and the use of multidisciplinary teams that affects the degree to which information can be shared and utilized to improve product design. The findings provide important implications for organizational learning and shed light on how to manage information generation activities to achieve NPD success.     

Success Factors for Integrating Suppliers into New Product Development

Faster, better, cheaper—these marching orders summarize the challenge facing new product development (NPD). In other words, NPD teams must find the means for speeding time to market while also improving product quality and reducing product costs. Cross-functional teams have proved effective for meeting these challenges, and such teams may extend beyond company boundaries to include key materials suppliers. Effective integration of suppliers into NPD can yield such benefits as reduced cost and improved quality of purchased materials, reduced product development time, and improved access to and application of technology. As Gary Ragatz, Robert Handfield, and Thomas Scannell point out, however, those benefits do not automatically accrue to any NPD team that includes representatives from a supplier's company. In a study of 60 member companies from the Michigan State University Global Procurement and Supply Chain Electronic Benchmarking Network, they explore the management practices and the environmental factors that relate most closely to successful integration of suppliers into the NPD process. The study identifies supplier membership on the NPD project team as the greatest differentiator between most and least successful integration efforts. Although the respondents reported only moderate use of shared education and training, the study cites this management factor as another significant differentiator between most and least successful efforts. Respondents listed direct, cross-functional, intercompany communication as the most widely used technique for integrating suppliers into NPD. To integrate suppliers into NPD, a company must overcome such barriers as resistance to sharing proprietary information, and the not-invented-here syndrome. The results of this study suggest that overcoming such barriers depends on relationship structuring—that is, shared education and training, formal trust development processes, formalized risk/reward sharing agreements, joint agreement on performance measurements, top management commitment from both companies, and confidence in the supplier's capabilities. Overcoming these barriers also depends on assett sharing, including intellectual assets such as customer requirements, technology information, and cross-functional communication; physical assets such as linked information systems, technology, and shared plant and equipment; and human assets such as supplier participation on the project team and co-location of personnel.     

Benchmarking the Firm's Critical Success Factors in New Product Development

Managing new product development (NPD) is, to a great extent, a process of separating the winners from the losers. At the project level, tough go/no-go decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the company level, benchmarking is helpful for identifying the critical success factors that set the most successful firms apart from their competitors. This company- or macro-level analysis also has the potential for uncovering success factors that are not readily apparent through examination of specific projects. To improve our understanding of the company-level drivers of NPD success, Robert Cooper and Elko Kleinschmidt describe the results of a multi-firm benchmarking study. They propose that a company's overall new product performance depends on the following elements: the NPD process and the specific activities within this process; the organization of the NPD program; the firm's NPD strategy; the firm's culture and climate for innovation; and senior management commitment to NPD. Given the multidimensional nature of NPD performance, the study involves 10 performance measures of a company's new product program: success rate, percent of sales, profitability relative to spending, technical success rating, sales impact, profit impact, success in meeting sales objectives, success in meeting profit objectives, profitability relative to competitors, and overall success. The 10 performance metrics are reduced to two underlying dimensions: program profitability and program impact. These performance factors become theX-and Y-ax.es of a performance map, a visual summary of the relative performance of the 135 companies responding to the survey. The performance map further breaks down the respondents into four groups: solid performers, high-impact technical winners, low-impact performers, and dogs. Again, the objective of this analysis is to determine what separates the solid performers from the companies in the other groups. The analysis identifies nine constructs that drive performance. In rank order of their impact on performance, the main performance drivers that separate the solid performers from the dogs are: a high-quality new product process; a clear, well-communicated new product strategy for the company; adequate resources for new products; senior management commitment to new products; an entrepreneurial climate for product innovation; senior management accountability; strategic focus and synergy (i.e., new products close to the firm's existing markets and leveraging existing technologies); high-quality development teams; and cross-functional teams.     

程序公平对新产品开发成功的影响——跨职能整合的中介作用

本文通过对中外汽车合资企业的实地调研,提出将程序公平引入现有关于跨职能整合与新产品开发成功的模型中,并进一步提出跨职能整合在合资企业程序公平与新产品开发成功关系中的中介作用。通过对获取数据的分析,发现合资企业程序公平不仅可以直接影响合资企业的新产品开发成功,而且也可以通过跨职能整合间接影响新产品开发成功,而跨职能整合在程序公平与新产品开发成功关系中起中介作用。     

Exploring the Nonlinear Impact of Organizational Integration on New Product Market Success

This article explores the nonlinear relationship between organizational integration and new product market success (NPMS). The concept of organizational integration was measured by assessing the degree of integration among various groups of people involved in the development of new products including new product development (NPD) teams that are typically the focal points of NPD efforts. New product market success was measured by examining four often‐used measures of NPD success. The mail survey research approach was used to gather empirical data from NPD managers in three major industries. The data gathered from this survey process were used as the basis from which to extract information to address this study's major research questions, which include: (1) How is the degree of new product market success related to the nonlinear degree to which groups of people (including NPD teams) integrate during NPD processes? and (2) How is the degree of new product market success related to the nonlinear degree to which separate groups of people (e.g., customers, suppliers, and functional departments) integrate during NPD processes? This study found that high levels of organizational integration (overall organizational integration and supplier organizational integration) during NPD processes are associated with high levels of new product market success. Additionally, this study found that the relationship between new product market success and organizational integration (customer organizational integration and functional organization integration) during NPD processes exhibit nonlinear, U‐shaped relationships. Therefore, the first important finding of this study confirms that various forms of organizational integration impact in a positive way the market success of new products. This suggests that management responsible for all NPD projects should consciously integrate important groups of people to support such developments. This study's findings also confirm and imply that new product developers in the studied industries should integrate marketing and research and development (R&D) over the duration of the NPD process. This suggests that new product managers must be proactive to assure that members of NPD teams are actively engaged with groups of supporting people within and outside new‐product–producing organizations. Unlike prior research, a major finding of this study suggests that the association between organizational integration and new product market success does not form inverted U‐shaped relationships. Data from this research imply that new product market success is linearly influenced by overall and supplier organizational integration. However, this study's data suggest that new product market success is nonlinearly influenced by customer and functional organizational integration. This study's data suggest that when customer organizational integration and/or functional organizational integration is increased, new product market success can be increased at a rate which is greater than a linear rate.     

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.     

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.     

Integrating Cross-Border Knowledge for Transnational New Product Development

Multi‐source knowledge integration, though widely regarded as fundamental for developing new products, remains obscurely understood and a significant challenge for organizations to accomplish. Prior research provides many insights on the approaches by which organizations transfer knowledge; however, how such transferred knowledge gets effectively embodied in products remains uncertain. Also unclear is whether different approaches for knowledge transfer differ in their effectiveness at realizing integration. This study analytically separates the transfer of cross‐border knowledge from its embodiment into products. It examines cross‐border knowledge transfer based on three different approaches: namely, the use of cross‐national teams, cross‐national communication, and cross‐national collaboration in the development of new transnational products. It examines cross‐border knowledge embodiment based on the extent to which new transnational products developed balance standardization with adaptation. The study uses a cross‐sectional survey administered to key members of transnational new product development teams in leading multinational companies across the world. The survey focuses on manufactured products that were developed across several industries: consumer products, consumer durables, and industrial products. Results from 90 new transnational product introductions surveyed reveal that knowledge integration is effective only when knowledge is transferred through cross‐national collaboration, and not when transferred through cross‐national teams and cross‐national communication. As integrating cross‐border knowledge in the development of transnational products involves making difficult trade‐offs for balancing standardization with adaptation, transferring knowledge through cross‐national collaboration stands out as being critical for successful outcomes. Although cross‐national teams and cross‐national communication enhance knowledge flows, they do not result in effective knowledge integration when developing new transnational products. These findings highlight an important point: All knowledge transfer approaches may not necessarily achieve knowledge integration. Hence, it is essential to systematically probe into the interrelationships between knowledge transfer and its effective integration and to identify an underlying set of contingencies that provide insights into when and why some knowledge transfer approaches are better than others at integrating knowledge.     

Achieving Fit between Learning and Market Orientation: Implications for New Product Performance

Drawing on the learning and market orientation literature, this study examines how responsive and proactive market orientations interact with exploitative and exploratory learning to affect new product performance. Despite advancements in understanding the distinctions between the different types of learning and market orientations, little evidence exists regarding which types of market orientation work best with exploitative or exploratory learning to improve new product performance. Using a sample of 216 high‐tech Canadian firms, the authors find that new product performance is elevated only when exploratory learning is bundled with proactive market orientation. New product performance suffered when exploratory learning was complemented with responsive market orientation and when exploitative learning was complemented with proactive market orientation. Implications for marketing theory and practice are discussed.     

The Effects of Cognitive Problem-Solving Orientation and Technological Familiarity on Faster New Product Development

This study examines the relationships between speed of development and the cognitive problemsolving orientations of both members of the team and the project leader when they work with more familiar or less familiar technologies. Edward McDonough and Gloria Barczak collected data from 32 new product development projects in 12 British companies. They report that technological familiarity moderates the relationship between speed of development and the cognitive problem-solving orientation of both project leaders and project teams and they explore implications of these results for R&D managers.     

Supportiveness of Organizational Climate, Market Orientation, and New Product Performance in Chinese Firms

Most knowledge development efforts in new product development have focused on Western economies and companies. However, due to its size, rapid growth rate, and market reforms, China has emerged as an important new context for new product development. Unfortunately, current understanding of the factors associated with new product success in China remains limited. We address this knowledge gap using mixed methods. First, we conducted 19 in‐depth interviews with managers involved in new product development in 11 different Chinese firms. The qualitative fieldwork indicated that firm behaviors and employee perceptions consistent with the phenomena of market orientation and the supportiveness of organizational climate both are viewed as important drivers of the new product performance of Chinese firms. Drawing on the marketing, management, and new product development literature this study develops a hypothetical model linking market orientation, supportiveness of organizational climate, and firms' new product performance. Direct relationships are hypothesized between both market orientation and supportiveness of organizational climate and firms' new product performance, as well as a relationship between supportiveness of organizational climate and market orientation. Data to test the hypothetical model were collected via an on‐site administered questionnaire from 110 manufacturing firms in China. The hypothesized relationships are tested using structural equation modeling. Results indicate a positive direct relationship of market orientation on firms' new product performance, with an indirect positive effect of supportiveness of organizational climate via its impact on market orientation. However, no support is found for a direct relationship between the supportiveness of a firm's organizational climate and its new product performance. These findings are consistent with resource‐based view theory propositions in the marketing literature indicating that market orientation is a valuable, nonsubstitutable, and inimitable resource and with similar propositions in the management literature concerning organizational culture. However, this study's findings also indicate that in contrast to a number of organizational culture theory propositions and empirical findings in some consumer service industries, the impact of organizational climate on firm performance in a new product context is indirect via the firm's generation, dissemination, and responsiveness to market intelligence. These results suggest that an effort to improve firms' new product performance by enhancing the flow and utilization of market intelligence is an appropriate allocation of resources. Further, this study's findings indicate that managers should direct at least some of their efforts to enhance a firm's market orientation at improving employee perceptions of the supportiveness of the firm's management and of their peers. This study indicates a need for further research concerning the role of different dimensions of organizational climate in firms' new product processes.