More effective sales force reporting

As the need for marketing intelligence by sales and marketing managers grows more essential, field sales personnel are increasingly being asked to gather and report information. Many executives realize the potential value of using salespersons to supply information useful to management decision making. The sales force is familiar with their territories, their customers' needs and sources of information inside customer organizations, their competitors' marketing activities, and trends in product acceptance. The incremental costs and effort required are low compared to other research methods, since information can be submitted within the context of a regular call report system [2, 6, 8].But salespersons have been found to be inadequate and uncooperative reporters in many instances. Numerous field salespersons believe that reporting infringes on their primary responsibility of selling, and furthermore that management apparently doesn't make use of the resulting information anyway. Thus, while salespersons have access to a wealth of marketing information of potentially great value to the firm, they are often inadequate, unreliable, and unmotivated reporters [4, 5].This article reports the results of a study designed to investigate what management practices contribute to, or detract from, effective reporting of marketing information by salespersons. Current practices in reporting are noted and some recommendations are made to help management improve sales force reporting.     

Estimating Market Growth for New Products: An Analogical Diffusion Model Approach

There has been a lot of interest in diffusion models as a basis for prelaunch estimates of the sales of new products, and indeed there have been several models developed that have achieved fairly good acceptance by new product managers. One of the limitations of such models, however, has been the requirement that a sales history for the new product, even a short one from a test market, for example, be available to derive the parameters of the model. For some types of products—consumer durables, services, industrial products, for example—a sales history isn't available. In this article, Professor Robert Thomas suggests some steps toward the development of models that incorporate the attractive features of diffusion models. His approach is to use, in a systematic way, the sales histories of products that can be considered to have analogous features from a buyer's point of view. He illustrates the approach by forecasting the sales of a new service.     

Product Development for the BoP: Insights on Concept and Prototype Development from University‐Based Student Projects in India

In recent years, market‐based approaches have been proposed for the base of the pyramid (BoP). However, the literature offers little theoretical or practical guidelines for innovative product development for what are radically new market contexts for most businesses in advanced economies. Considering that product development is a fundamental activity in a market economy, and that much BoP consumer welfare potentially arises from innovative and affordable goods and services that can solve critical life needs, this is a substantial gap in knowledge. This paper attempts to address this gap by using an analysis of 13 year‐long university projects on BoP‐focused concept and prototype development conducted between 2006 and 2010. An inventory of research propositions is developed that identifies factors necessary for effective product development for BoP markets. Implications for new product development research and practice are discussed.     

Breakeven Time on New Product Launches: An Investigation of the Drivers and Impact on Firm Performance

The ability to break even faster on new product projects is becoming increasingly critical for firms in fast‐moving industries where continually reinvesting in research and development efforts matters greatly for survival. However, most research to date has focused on studying the impact of two primary innovation outcomes: sales and profits. The exclusive emphasis on sales and profit may be warranted for certain types of goods such as durable goods, but when examining the effects of new products in fast‐moving consumer goods or in the entrepreneurial sphere, where cash to cash matters greatly for survival, it is critical for both researchers and practitioners to not only consider the profits and sales generated by the new product but also the time to breakeven. This paper develops a theoretical framework using the competency‐based literature to examine the effects of innovation drivers (customer idea source, speed to market, product quality, and product newness) on breakeven time (BET) and project profits, and their subsequent impact on firm performance. A three‐stage least square estimation method was employed using longitudinal data on 945 new product development projects and launches in the morning (breakfast) foods category. The results clearly pinpoint that for successful product innovation, managers need to consider the time taken to breakeven on new product development. Specifically, the results demonstrate that speed to market and product quality shorten BET, but customer idea source extends BET. Second, the analysis also empirically demonstrates that BET is an equally effective predictor of firm performance as project profits in the short run, but significantly a stronger predictor of firm performance in the long run (t + four years), suggesting that BET should be regarded as a superior leading indicator of firm performance versus product profitability for fast‐moving consumer goods segment. This is an important finding that suggests firms that recoup their cash investments more quickly experience greater short‐term and significantly more long‐term success.     

Success and Failure in New Industrial Services

The critical role of innovation has long been recognized in physical goods; however, the development of innovative services has received much less attention. The research described here reports on an early major study of success and failure in new industrial services. Building on her integration of two literatures on new product innovation and services marketing, Ulrike de Brentani reports how companies measure new service performance and the factors which are associated with success. She reports that new industrial services share some important success factors with physical goods, such as the firm's market orientation, a formal service development process, project synergy and a truly superior new service offering. Yet she finds that firms must adjust their approach to the distinctive character of services, including customer perceptions of service quality, features that successfully differentiate services in competitive terms and cost reduction.     

Leveraging on systemic learning to manage the early phases of product innovation projects

A number of studies have pointed out the importance of the early phases of new product development projects. In fact, these phases (addressed in the literature with different names, such as pre-project activities, concept generation, product planning, idea generation, investigation, product definition) are concerned with a number of critical decisions that have great impact on the performance of product development. Any fault occurring in these early phases in understanding the market needs, in choosing the product architecture and technology and in defining the product specifications would eventually deteriorate the innovation process, since adjustments in later stages imply reworks that are costly and time consuming. Although the relevance of early project phases has been empirically verified in the literature, the mechanisms that allow these phases to be properly managed are still largely unexplored. This paper investigates the articulated and coherent set of methods, organizational mechanisms and behavioural patterns that successful companies adopt to manage concept generation and product planning. Inferences are based on a field research concerning 19 in-depth case studies of Italian and Swedish companies in the vehicles, helicopters and white goods industries. The paper supports findings of other studies concerning the importance of teamworking and communication. However, teamworking emerges as a necessary, but not a sufficient mechanism. Systemic learning from past experiences is the real keystone toward an effective management of the early phases of product development processes.     

Risk factors in accepted and rejected new industrial products

Faced with limited and increasingly expensive resources, managers in most industrial product companies are constantly confronted with the difficult task of choosing which new product opportunities to accept for development funding and which to reject. Their decision is made even more difficult because of both the high failure rates and high development costs typical of high-technology industrial products, both during development and after market introduction. This research identifies some critical dimensions of risk in potential new product opportunities. This is an important step toward identifying the most relevant dimensions of government incentives for research and development assistance, as well as an aid to managers attempting to recognize and deal with the greatest risks in the new product opportunities they face.     

Do brand names differentiate identical industrial products?

Many industrial marketing companies manufacture goods that are intrinsically identical to goods made by their competitors. When faced with this problem, an increasing number of companies attempt to use branding at the ultimate consumer level to pull their product through intermediate manufacturers and distribution channels. This paper analyses the validity of this strategy by looking at the U.K. man-made fibre market, where it has been used extensively. The conclusions are that branding alone is unlikely to be of value in the market. This hypothesis is supported by the results of a survey of industrial experts and consumers. It is suggested that the key to controlling the market in question is branding with rigid control of product end use.     

Retailers' Adoption Decision of New Consumer Durables

In today's competitive environment, members of the market chain, such as retailers and suppliers, are becoming increasingly powerful. It has been established in the packaged goods area that the ability to get new products on the shelves' is an essential factor in the success of a new product. However, no research exists to date that relates variables investigated in packaged goods contexts to retailers' adoption decision of new consumer durables. The present study focused on the dimensions that influenced the new product adoption decision by 291 retailers of consumer durables by exploring the relative importance of 26 adoption criteria across seven product categories. The results largely supported previous findings but simultaneously extended that body of knowledge. For example, six dimensions characterized the new product adoption decision in our sample of Dutch retailers. We discuss implications of this study and provide directions for future research in this area.     

Do We Have to Get Along to Innovate? The Influence of Multilevel Social Cohesion on New Product and New Service Development

In this study, based on the Comparative Performance Assessment Study survey conducted by the Product Development Management Association, the authors develop and test a model which considers the antecedents and performance outcomes of social cohesion, a seemingly critical organizational factor in new product development (NPD). Using a sample of over 450 innovation and product development professionals from North America, Europe, and Asia, social cohesion is conceptualized and tested across three levels—within team cohesion, between team cohesion, and between firm cohesion. The results of a structural equation model indicate several differences between the antecedents of the varying forms of social cohesion. A post hoc exploration of the difference between goods‐ versus service‐dominant firms provides a clearer picture of cohesion's influence on innovation outcomes. Specifically, within team and between team cohesion are positively associated with new services performance, while for traditional goods‐based NPD, within team, between team, and between firm cohesion all appear to be positively related to performance. The findings suggest that high social cohesion is not always optimal and that managers should focus on specific types or levels of social cohesion as opposed to thinking about social cohesion as a one‐dimensional construct. The findings also suggest that goods‐ and service‐centric firms can use different tactics or strategies to drive social cohesion and, ultimately, new product performance, and that innovation managers may need to allocate resources differently depending on the nature of the market offering being developed. The paper also presents several implications for theory and practice, as well as future research directions related to the various levels of social cohesion and their influence on new product and new service performance.     

Product development cycle time for business-to-business products

For a number of years, firms have been implementing changes in the way they develop new products, changes that are targeted at reducing overall product development cycle times. And over the years, a number of academics have conducted research trying to understand the factors that are related to reducing new product development (NPD) times. But the question remains — just how long does product development generally take in absolute numbers? Information on how long product development takes is helpful to firms for planning and controlling the flow of products into the marketplace and in determining resource needs for NPD. Other than anecdotal data pertaining to particular projects that have been commercialized by particular firms, very little hard data have been reported on this topic. This article analyzes data to quantify average cycle times for physical goods commercialized by business-to-business (B2B) firms. The data are a subset of a much larger data set from the Product Development & Management Association's (PDMA) Best Practices research. The analysis presents average product development cycle times for four different types of projects (new-to-the-world, new-to-the-firm, next generation improvements and incremental improvements), presents evidence of the lack of a relationship between cycle time and success and looks at factors that are associated with differences in the length of product development cycle times.     

Book Reviews

We have reviews of five books that deserve practitioners' attention. The first review discusses the sixth book about accelerating new product development that we have recently reviewed. The McGrath et al. book will be of particular value to those readers who work in large firms on large new product development projects. The second and third reviews cover second editions of significant books. Randy Englund's review of Russ Archibald's book on project management emphasizes how this discipline has value to all new product development project teams. James Scheu reports that George Gruenwald's useful book is of special value to those working in the package goods industry.
The last two reviews stress aspects of teamwork. George Castellion notes that the book by Katzenbach and Smith helpfully illuminates the difference between teamwork and teams. Randy Englund's review of the book by Jeffrey Pfeffer draws our attention to the role and potential abuse of a manager's power in product development.     

Changing Strategies and Tactics for New Product Development

There has been a considerable amount of effort and writing devoted to improving the new product development process during the last two decades. Although there have been some surprises in this literature and in reports from the field on how to manage this complex business process, we now have a good view of the state-of-the-art practices that work and do not work to accelerate commercial success of new ventures. We know much less about how firms change their strategies for new product development.
In this article, we report on a study to investigate how companies change the way they originate and develop new products in manufacturing. We made no prior assumptions about what best practices might be for changing the direction of the new product development process, but we reasonably were sure there would be trends in how companies were attempting to create this strategic change. Even though one size does not fit all, there were significant trends in our findings.
We studied eight manufacturing firms using in-depth, open-ended interviews and were surprised to find that most of these companies are beginning to develop products that are new to the firm, industry, and the world (nearly half, or 10 of 21 new product projects), where they had not been eager for radical change in the past. These newer products likely are to be driven by a combination of market and technology forces, with general requirements being directed by internal forces: middle and top management. Results also indicate significantly that being able to marshal resources and capabilities is easier if change is less demanding and less radical, but when middle managers are driving the conversion of general requirements into specifications, resource issues have yet to be resolved. Implications of these findings are discussed for companies aspiring to change the entire process of new product development in their firms based on these significant results.     

Problem formulation in industrial marketing research

Marketing research is achieving increasingly greater recognition in the industrial marketing field as one of the major tools to assist management in decision-making processes. Its position in consumer goods marketing has long been well established, and its use has been widespread. At the present time industrial marketing research is becoming more accepted as a normal part of marketing management whose efforts are directed to the industrial markets for goods and services.     

Featuring Capability: How Carmakers Organize to Deploy Innovative Features across Products

Innovative features such as hands‐free car entry and ignition systems, stop‐start devices, telematics systems, and panoramic windshields are increasingly important to carmakers' innovation strategies. However, while product‐centric innovation has been extensively studied, there is less insight into the way companies implement their feature‐innovation strategies. The capability to explore, integrate, and deploy such attractive features is a critical dynamic capability; it allows carmakers to refresh their products, develop their competences, and maintain the efficiency of their traditional new product development. This research investigates the structures and processes of feature innovation in the automotive industry. It is based on a global investigation encompassing 9 generalist carmakers and 26 cases of feature innovation. The results show a clear trend, over the past decade, toward a structure of autonomous “advanced engineering” units and processes that are responsible for exploring innovative features and transferring them to multiple products. This paper details the key attributes of these units, and the role they play along the multiproduct learning cycle. Supplementing this structural analysis, the paper also identifies the coordination patterns between exploration and new product development activities. These results provide industry‐level insights into the way firms organize their feature‐innovation capability, and bring empirical elements to the ambidexterity literature.     

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

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

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.     

Product Development Strategy: An Integration of Technology and Marketing

Although it seems obvious that a new product development strategy must bring together marketing and R&D strategies, the conceptual development of marketing and R&D strategies has taken place in relative isolation. More than ten years ago, when Professor Harry Nyström began his research program on product development in Swedish firms, he realized that the isolation wasn't an appropriate point of view. He began to construct a conceptual framework for analyzing product development strategies that incorporated many more variables than had traditionally been considered. The latest set of firms in the research program are four pulp and paper companies. They are in mature, process industries, quite unlike the earlier study firms. Yet many of the same propositions from the earlier research still hold. In this article, Professor Nyström presents the most recent version of his framework to help managers develop an integrated product development strategy.     

Knowledge sharing and strategic fit in integrated product development proejcts: An empirical study

While product strategy has been approached from a variety of perspectives, the role of strategic fit as a critical linkage of knowledge sharing practices and new product development outcomes have not been adequately explored. This paper discusses how strategic fit is instrumental for cross-functional teams to integrate product development outcomes. This paper identifies critical knowledge sharing components that enhances the extent of strategic fit that in turn improves the success of product development efforts. Strategic fit or alignment requires knowledge sharing practices of the product development team. Teams with a shared knowledge base are more capable of thinking strategically, adapting their actions to their project environment and accordingly engaging in innovative problem-solving while ultimately achieving project goals of time, cost and value. This paper presents and tests a research model using a sample of 285 product development projects of firms from USA, Canada and Spain. The results suggest that strategic fit is associated with greater knowledge sharing and enhance product development outcomes in both small and large firms as well as diverse regions (i.e., USA, Canada and Spain).