Measuring customer attractiveness

Various beneficial consequences can accrue when a customer is perceived to be an attractive customer, particularly in a business-to-business context. Opinions differ as to what makes for customer attractiveness and a number of different features have been suggested as contributing to it. Currently there exists no comprehensive view of what factors constitute customer attractiveness and how this may be valued, measured and evaluated. Drawing on various facets of customer attractiveness suggested in the literature, this paper seeks to delineate the customer attractiveness construct and develop an instrument to measure it. The paper concludes by discussing how the scale developed can be used as a tool to address some critical issues in assessing customer attractiveness.     

Customer value anticipation, customer satisfaction and loyalty: An empirical examination

A service-dominant logic by definition is inherently customer oriented and relational, reflecting deeper and more complex connections between suppliers and customers. The service mindset driving increased collaboration enables suppliers to have deeper insights to what customers' value. Customer value perceptions are dynamic, sometimes in constant flux, necessitating anticipatory capabilities on the part of suppliers. Yet, there is a notable lack of discussion about customer value anticipation and related empirical evidence of whether or not customers care if suppliers anticipate what they value. The authors report on two survey studies that test using structural equation modeling the notion that suppliers good at anticipating what customers will value realize higher customer satisfaction and loyalty. Understanding this relationship is critical for marketing managers wrestling with allocation of limited resources. We find that customer value anticipation is a strong driver of satisfaction and loyalty, with satisfaction acting as a mediator for loyalty.     

Linking customer lifetime value with shareholder value

The measurement of customer lifetime value has become a key issue for developing and maintaining long-term profitable customer relationships. It plays a significant role in customer acquisition and retention decisions. Given the growing importance of creating value for shareholders, market strategies have to be evaluated by their capacity to achieve this goal. Accordingly, both the acquisition and maintenance of customers must result in superior cash flows and augmented shareholder value. However, little attention has been paid to the link between customer lifetime value and shareholder value. The authors of this paper provide a conceptual framework for linking customer lifetime value to shareholder value. It is argued that customers have to be treated as assets that increase shareholder value by accelerating and enhancing cash flows, reducing cash flow volatility and vulnerability and increasing the residual value of the firm.     

Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers

The objective of the present study is to advance the understanding of the role of the strategic orientation of the firm for successful new product development (NPD), in the context of Chinese manufacturing firms. Through field research accompanied by a review of the related literature, this study identifies customer orientation and technology orientation as crucial strategic components that are important to successful new product development. This research proposes a conceptual model of strategic orientations, in which firm-internal (organizational support) and -external (environmental turbulence) factors are expected to influence strategic orientations, which, in turn, impact NPD performance. The model is tested using data collected from a large-scale survey of 232 manufacturing firms in China. The results largely support the hypotheses derived from the conceptual model. First, organizational support and environmental turbulence have a positive influence on the implementation of strategic orientations. Second, the two strategic orientations show a different pattern of performance implications.     

Customer interactivity and new product performance: Moderating effects of product newness and product embeddedness

Understanding customer needs which drive significant product innovation is particularly challenging for new product development (NPD) organizations. Research has addressed how organizations benefit from interacting with customers, but more conceptualization is needed into the dimensions of the customer interaction process. In a business-to-business (B2B) setting, customer interactivity is conceptualized as a multi-dimensional construct consisting of bidirectional communications, participation, and joint problem solving during NPD projects. Drawing upon organizational information processing theory, customer interactivity is hypothesized to be positively related to customer information quality when developing highly innovative products, but not when developing modifications or extensions of existing products. Another condition affecting this relationship studied is the embeddedness of the new product in the customer's business environment. Customer interactivity is hypothesized to be positively related to information quality for highly embedded product, but not for low embedded product. Results from a sample of NPD organizations in several B2B industries support these hypotheses. The study contributes to the marketing literature and practice by identifying important dimensions of the customer interaction process which lead to more proactive organizations, and identifying two moderating conditions of the customer interactivity and NPD performance relationship.     

The use of information technology tools in new product development phases: Analysis of effects on new product innovativeness, quality, and market performance

Extant research has largely ignored empirically examining how information technology (IT) affects new product effectiveness. Using the knowledge-based theory as a foundation, this study examines if, and how, particular IT tools used in the discovery, development, and commercialization phases of the new product development (NPD) process influence NPD effectiveness dimensions, namely, market performance, innovativeness, and quality of a new product. Based on data collected from NPD managers in the US and Canada, the findings indicate that specific IT tools contribute to various measures of new product effectiveness differently. Moreover, the results show the positive effect of these IT tools in different phases of the NPD process. This suggests that with regard to NPD, a decompositional approach that examines the role of IT within each phase of the NPD process is best. Based on these findings, the authors discuss theoretical and managerial implications of the study and suggest paths for future research. Managerially, some interesting results of our study are that decision support systems, file transfer protocols, and concept testing tools would significantly improve NPD effectiveness regardless of the phase they are used.     

New product development in Asia: An introduction to the special issue

Given the increasing importance of Asia, the purpose of this special issue is to broaden the scope of our understanding of New Product Development (NPD) by going beyond the traditional Western research settings and looking at how new products are developed in Asia. This paper introduces the special issue on NPD in Asia and identifies key patterns of similarities and differences between Asian and Western NPD practices. The paper highlights key similarities and differences in the areas of organizational/top management support; technological proficiency; customer/market orientation; information sharing; cross-functional interface; entrepreneurship orientation; NPD strategies; innovation orientation; contingencies of innovation orientation; innovative marketing strategies; NPD process; appointment of project managers; rewarding team members; success rate; and cycle time.     

New product development process and time-to-market in the generic pharmaceutical industry

Generic pharmaceutical companies tend to improve their market position by being first in the market when a patent on an original product elapses. The time-to-market of new products is an important source of their comparative advantages. In our study we investigate the organizational and managerial factors lying behind time-to-market in four generic pharmaceutical companies in Central and Eastern Europe. Our research also supports some results found in other studies on the lead-time of new product development. However, we find some factors specific to generic pharmaceutical companies. Our findings are incorporated into a diagnostic model of new product development in generic pharmaceutical companies, which is an important practical result of our research.     

The contingent value of exploratory and exploitative learning for new product development performance

This study endeavors to extend research on organizational learning by investigating the complicated effects between exploratory — exploitative learning and new product performance in a single new product project. Specifically, premised on contingency theory the authors investigate the negative nonlinear and interaction effects of project-level exploratory and exploitative learning behaviors on product development performance, and examine internal organizational and external environmental factors to recognize their differential moderating effects between the two learning behaviors and new product performance. Most of the hypotheses are supported based on questionnaire survey results of 253 new product projects. The results indicate that the two type of learning have curvilinear (inverted U-shaped) effects on new product performance, and suggest that product development performance will be enhanced when one learning is at higher level and the other is at lower level. Furthermore, the authors discover that process-based reward, encouragement to take risk, and environment dynamics strengthened the benefits of exploratory on new product performance. On the other hand, the advantages of exploitative learning on new product performance is further enhanced when output-based reward, project development formalization, and environment competitiveness is high. Finally, this study suggests that project managers should pay careful attention to employ the two learning behaviors during new product development.     

Portfolio of controls in outsourcing relationships for global new product development

Due to increasing globalization and technological discontinuities, firms strive to develop new product capabilities and flexibilities by engaging in outsourcing activities and adopting modular systems. However, these strategies contain risks of opportunistic expropriation of tacit knowledge and costs related to monitoring sourcing partners who are geographically and culturally distant. This study examines the antecedents of control mechanisms through which firms manage the risks and costs associated with outsourcing relationships in global technology-intensive markets. Modularity in design is hypothesized as a moderator of model relationships because it can serve as a substitute for formal or informal controls in a “controls portfolio”.     

Best new product development and management practices in the Korean high-tech industry

This paper investigates critical factors affecting the likelihood of new product success and effective new product development (NPD) models for Korean high-tech firms. Empirical results suggest that successful projects differ from unsuccessful projects in project environment, skills and resources, project leadership, strategic fit, efficient NPD process, and effective product-positioning strategies.This study confirmed that efficient and effective new product development and management were important determinants of high-tech firms' competitive advantage. Furthermore, the findings of this study raised questions about some commonly held beliefs when compared with Western studies focusing on high-tech industries.     

Towards a framework of customer value assessment in B2B markets: An exploratory study

This paper examines the key processes and activities of customer value assessment in business-to-business (B2B) markets. Given that an increasing number of B2B firms are providing combinations of products and services, or integrated solutions, the present study examines customer value assessment from the solution supplier's perspective. Specifically, based on an exploratory field study and in-depth interviews with 18 managers in three different firms, the present study identifies five key processes (i.e., value potential identification, baseline assessment, performance evaluation, long-term value realization, and systematic data management) and 11 related activities involved in customer value assessment in B2B markets, and integrates them into a managerially grounded framework. The findings from this study contribute to the literature on customer value and solution research, and provide useful insights for managers on how to assess the value delivered by their offerings to customers.     

A comparative analysis of new product development by Italian and Japanese manufacturing companies: A case study

Based on survey data from Italian and Japanese companies, six measurement scales are developed for practices, process, strategic guide, and capabilities for new product development as potential determinants of its financial performance, that is, attainment of profit goals and revenue goals. By employing a regression model with a country dummy variable, the differential determinants of financial goals attainment between Italian and Japanese samples are estimated. A significant difference can be found in the impact of new product development capabilities on profit goals attainment only. Then, we evaluate the level of improvement in explanatory power by dividing the pooled sample into two and enabling regression coefficients to take different values, and find no evidences of the significant improvement. Technology and marketing capabilities concerning new product development are demonstrated to be overwhelmingly important to financial performance.     

The impact of structural and contextual factors on trust formation in product development teams

This study examines antecedents of trust formation in new product development (NPD) teams and the effects of trust on NPD team performance. A theoretical framework relating structural and contextual factors to interpersonal trust and project outcomes was built, including task complexity as a moderating variable. Hypotheses from this model were tested with data on 93 product development projects carried out in Turkey. The findings showed that structural factors such as moderate level of demographic diversity, proximity of team members, team longevity, and contextual factors (procedural and interactional justices) were positively related to the development of interpersonal trust in NPD teams. The findings also revealed that interpersonal trust had an impact on team learning and new product success, but not on speed-to-market. Further, the findings showed that the impact of interpersonal trust on team learning and new product success was higher when there was higher task complexity. Theoretical and managerial implications of the study findings are discussed.