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.     

The Credibility–Cooperation Connection at the R&D-Marketing Interface

Research and development (R&D) managers' perceptions of both marketing information and marketing managers are analyzed using an information and source credibility framework. The findings are based on a study of R&D directors in 80 technology-intensive companies and focus on activities and interactions during the new product development process. The authors found that the R&D managers' perceptions differed significantly in high and low integration companies. These perceptions also were influenced by various organizational practices. The R&D-marketing cooperation was highest where organizational practices were conducive to cooperation and R&D perceived marketing input as credible. Several implications for creating a corporate climate conducive to interfunctional cooperation are developed.     

Managing innovation networks: Exploratory evidence from ICT, biotechnology and nanotechnology networks

This study examines the management of innovation networks which has enjoyed increased recognition in the marketing literature due to its growing prominence and relevance. By testing a causal model relating network factors to outcomes, the study contributes to theory development on managing innovation at the net level of analysis. Consequently, it contributes to the respective marketing literatures on new product development, open innovation, industrial marketing and its emerging network management sub-stream. It also offers a methodological contribution as respondents include key players from businesses, government agencies, research organizations and universities rather than from only one focal organization as studies in extant literature have predominantly done. Findings are based on 219 responses from Australian high technology networks, namely, information and communications technology and biotechnology/nanotechnology. The study offers valuable implications for marketing managers involved in new product development and innovation concerning strategies for managing their inter-organizational innovation initiatives effectively.     

Information Use in New Product Development: An Initial Exploratory Empirical Investigation in the Chemical Industry*

In‐depth interviews with product developers and product development software providers in a previous qualitative phase of research uncovered eight general types of information that are used across the new product development process (strategic, project management, financial, market and customer, wants and needs, technical, competitor, and regulatory information) and three general approaches to managing information in the process (project‐centric, functionally oriented, and fully distributed). This paper presents a second phase of research trying to understand the role that managing knowledge and information plays in developing new products and achieving NPD success. This research phase empirically investigates use of the eight types of information across three general phases of the NPD process in the chemical industry using 81 mail survey responses from marketing and new product development professionals. Respondents were asked to indicate the degree to which each of the eight information types was used in each of the following general phases of new product development: the fuzzy front end, development, and testing and launch. The respondents also provided information on new product development success, information management system sophistication, and innovation strategy. This research makes several contributions to new knowledge. First, this research suggests that information management in product development is even more complex than initially posited in Zahay et al. (2004) , with each of the eight types of information identified being used in each of the three phases of development. Unexpectedly, for all but one type of information use is higher in later stages of the NPD process, even though use of several kinds of information early in the project is associated with increased success. Thus, managers may need to encourage teams to start gathering information from outside the firm earlier than is currently the norm. Second, the results suggest that more sophisticated information management systems are indeed associated with increased use of various different types of information, as expected. Third, more sophisticated information management systems are more highly associated with success than less sophisticated information management systems. These results are important, as most new product development information management systems are limited in their ability to handle complex and non‐quantitative information such as customer wants and needs, as well as strategic, competitor, and regulatory information. However, being able to transmit information on these issues is associated with increased firm performance and project success from these data. Thus, firms need to figure out how to improve their ability to manage and use non‐quantitative information more effectively.     

Launching new product features: a multiple case examination

The present study investigates the strategies that eight companies employed in launching new product features in a variety of markets. A literature review shows that launching new product features is an under‐researched area. This lack of attention may be detrimental to companies, as in many mature markets—such as those for durable consumer goods like television sets, coffee machines or videocassette recorders—the launch of new product features is perhaps the single most important product development activity that companies employ. We sought to address three research questions, namely what are the current strategies used by managers for launching new product features, how do these strategies differ, and what are the opportunities and pitfalls of these strategies? A multiple case study involving 38 managers from different functional backgrounds was used, thereby investigating the feature introductions of eight companies in‐depth. The study first identifies six feature launch decisions: the feature's position in the feature life cycle, the core technology concerned, the focus on feature or product, the differentiation practices used by the firm, feature diffusion in the product line, and the make‐or‐buy decision. Based on these decisions, four distinct feature launch strategies were distinguished: dictatorship, pioneering, establishing, and following. Dictatorship companies launch feature innovations that are based on fundamentally new technologies. Pioneers are not as powerful as dictators and focus on features that are based on applied and proven rather than on fundamentally new technologies. Establishes copy and improve successful features and launch them quickly and broadly as a standard in mass markets. Followers launch standard features that already existed in the mass market. These four strategies describe how the firms in our sample launched new features in the marketplace. As such, they describe when and where in the product line what feature was introduced. Such a typology of feature launch strategies helps to proactively understand the strategies firms have for launching new product features. The article discusses for each strategy the relevant feature launch decisions, possible applications, and opportunities and pitfalls. We conclude with the implications of our study for research and managerial practice.     

Exploring New Product Development Project Review Practices*

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

Principles of New Product Management: Exploring the Beliefs of Product Practitioners

Conventional wisdom might lead us to conclude that the various disciplines involved in product development and management are often at cross-purposes. For example, practitioners from R&D and engineering have been known to suggest that marketing fails to understand the technical trade-offs involved in product management decisions. Conversely, marketing professionals sometimes complain that their technology-oriented colleagues pursue product development initiatives without adequate market awareness. And practitioners from both sides of this debate have asserted that research on new product development tends to be of the ivory tower variety, with little or no relevance for industry. Are such complaints valid? Perhaps it is time for a reality check. By searching academic literature on product development, Roger J. Calantone, C. Anthony Di Benedetto, and Ted Haggblom have compiled a list of 40 fundamental principles of new product development. This list forms the basis for a survey of new product practitioners from marketing and technical disciplines. The study provides a means for assessing whether practitioners agree with the fundamental principles of new product development that are identified in current academic literature. By obtaining responses from both marketing and technical professionals, the survey also sheds light on whether those two groups hold fundamentally different beliefs regarding new product development. The survey results reveal strong overall agreement among practitioners regarding these fundamental principles of new product management. Managers believe that 80% of the principles are either usually or almost always true. In other words, the survey results support the idea that the academic community is pursuing research issues that are relevant to practitioners, and that they are reaching valid conclusions. There are only a few cases in which the responses from the technical and marketing practitioners differ. Those disagreements probably result from differences in the basic orientations of the two groups. For example, it is not surprising that marketing managers would be more likely to agree that “product users and the marketplace form the most important source for new product ideas,” while technical managers more strongly support the idea that “radically new technologies constitute an important source of new product ideas.” The respondents noted overall disagreement with only a few of the 40 principles. In many of these cases, the academic literature has reached mixed conclusions. In other words, these “principles” might actually be oversimplifications, and further research is probably needed before we can fully understand the issues involved.     

Do New Product Development Managers in Large or High-Market-Share Firms Perceive Marketing-R&D Interface Principles Differently?

In the quest for successful innovation, the importance of the R&Dlmarketing interface is virtually unquestioned. For many organizations, however, effective integration of technical and marketing functions is difficult, if not impossible. Despite seemingly widespread understanding of fundamental new product principles, some companies still manage to gain a larger share of the market than their competitors. This raises the question of whether managers in more successful companies have special insights into R&D'/'marketing interface principles that give them an edge over their competitors. To gain a better understanding of managers' perceptions of new product principles defined in the academic literature, Ted Haggblom, Roger J. Calantone, and C. Anthony Di Benedetto conducted a survey of 687 nonacademic members of the Product Development and Management Association. The basis for the survey was a set of 78 product management principles compiled from a search of more than 500 books and articles from various disciplines. From this survey, 14 of the 78 principles were selected as relevant to the study reported in this article. The principles discussed in this article involve such issues as resistance to change, short-term orientation, communication and trust between marketing and technical people, the effect of centralized decision-making on innovation, the importance of open communication flows, senior management's role in the R&D I marketing interface, and the necessity of a product champion. The primary quesstion addressed in this study is whether managers from successful companies perceive these principles differently from managers of less successful firms. The study provides partial support for the proposition that managers' perceptions of these new product principles depend on their company's success. In other words, the survey results suggest that managers in companies with higher market shares tend to agree more strongly with these principles than their counterparts in less successful firms. The study also explores the relationship between firm size and agreement with these principles of new product success. Specifically, the study assesses whether the perceptions of managers from smaller, more entrepreneurial companies differ from those of managers in larger companies. Although managers from small and large firms may view these principles from different perspectives, there were no statistically significant differences in the perceptions of managers from small and large firms.     

What Separates Japanese New Product Winners from Losers

Operating in the upper echelons of highly competitive, global markets, numerous Japanese firms enjoy well-deserved reputations for excellence in new product development. Despite this success, however, almost no research has been conducted to explore the keys to successful new product development in Japanese companies. For the most part, research in this area has focused on North American and European firms. X. Michael Song and Mark E. Parry address this gap with a study of 404 Japanese firms and 788 new product introductions. Their research explores the links between new product success and 10 factors: product advantage; marketing synergy; technological synergy; market potential; market competitiveness; market and technical understanding; senior management support; proficiency in the predevelopment planning process and in concept development and evaluation; proficiency in market research, market pretesting, and market launch; and technical proficiency. To avoid any cultural bias, development of the survey was preceded by in-depth case studies and focus group interviews with Japanese and American new product development teams. Although time-consuming and expensive, these preliminary steps were necessary for ensuring the validity of the survey contents and procedures. Notwithstanding the obvious cultural differences, the findings from this study suggest that Japanese new products professionals view the keys to success in much the same way as their North American counterparts. For the survey respondents, the most important success factor is product advantage. Other important success factors include predevelopment proficiency (that is, proficiency in the predevelopment planning process as well as in concept definition and evaluation) and marketing and technological synergy. Consistent with previous research on North American firms, market competitiveness was found to be the least important success factor. For managers who are trying to predict whether a project will result in a product advantage, several survey items may be useful as a checklist for assessing potential product advantage. In particular, these managers should consider whether the product offers potential for reducing consumer costs and expanding consumer capabilities, as well as the likelihood that the product offers improved quality, superior technical performance, and a superior benefit-to-cost ratio.     

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.     

Formal Rules in Product Development: Sensemaking of Structured Approaches*

Many scholars consider the use of formal structured approaches to manage product development as very significant for successful product innovation. Others consider them a predictor of the likely outcome of the processes. Structured approaches can be considered management technologies for product development. Prior research has addressed the design of structured approaches and has measured how different types or generations of these are related to different processes and outcomes in different ways. However, only limited research has addressed how managers and employees actually understand and makes sense of these methods. This paper investigates how structured approaches are translated through a number of interpretations into daily practices. The research draws on research in sociology and management accounting to analyze structured approaches for product development as a managerial technology that consists of rules that individuals must understand (i.e., make sense of). The paper presents arguments for building a model of factors that influence the sensemaking of structured approaches for product development based on Scandinavian cases. First, structured approaches are presented as a type of managerial technology that consists of rules. Second, a framework to classify structured approaches for product development according to their degree of elaborateness and exhaustiveness is derived. This helps to identify the types of rule systems in companies—and how these influence everyday practices. The sensemaking from rules to practice is implemented through a number of translations, based on the context, the history, and the authorized statements and feedback processes. Empirical findings show that structured approaches differ both with respect to their degree of elaborateness and exhaustiveness. Additionally, firms differ greatly in terms of how rigorously they enforce the rules. Furthermore, the importance assigned to them by functional managers and project managers differ greatly. Even companies with extensive and elaborate rule regimes enforce the rules in a flexible manner, and rules are often applied at the discretion of project managers. Practices are influenced by the interpretation, use, and feedback from senior managers. Observations make it possible to develop a model for the sensemaking processes that influences how a specific structured approach through sensemaking is altered, modified, and sometimes even cut off from influencing innovation processes. The sensemaking of rules might reverse elaborate and exhaustive rules into quite flexible systems in practice. One implication of this is that individual sensemaking of structured approaches for product development thus needs to be analyzed to understand managerial practices. Another implication is that it cannot be assumed, a priori that formal approaches are the same as exercised practices.     

Modified Stage‐Gate® Regimes in New Product Development*

The purpose of this research was to explore the nature of the Stage‐Gate^®process in the context of innovative projects that not only vary in new product technology (i.e., radical versus incremental technology) but that also involve significant new product development technology (i.e., new virtual teaming hardware‐software systems). Results indicate that firms modify their formal development regimes to improve the efficiency of this process while not significantly sacrificing product novelty (i.e., the degree to which new technology is incorporated in the new offering). Four hypotheses were developed and probed using 72 automotive engineering managers involved in supervision of the new product development process. There was substantial evidence to creatively replicate results from previous benchmarking studies; for example, 48.6% of respondents say their companies used a traditional Stage‐Gate^®process, and 60% of these new products were considered to be a commercial success. About a third of respondents said their companies are now using a modified Stage‐Gate^®process for new product development. Auto companies that have modified their Stage‐Gate^®procedures are also significantly more likely to report (1) use of virtual teams; (2) adoption of collaborative and virtual new product development software supporting tools; (3) having formalized strategies in place specifically to guide the new product development process; and (4) having adopted structured processes used to guide the new product development process. It was found that the most significant difference in use of phases or gates in the new product development process with radical new technology occurs when informal and formal phasing processes are compared, with normal Stage‐Gate^®usage scoring highest for technology departures in new products. Modified Stage‐Gate^®had a significant, indirect impact on organizational effectiveness. These findings, taken together, suggest companies optimize trade‐offs between cost and quality after they graduate from more typical stage‐process management to modified regimes. Implications for future research and management of this challenging process are discussed. In general, it was found that the long‐standing goal of 50% reduction in product development time without sacrificing other development goals (e.g., quality, novelty) is finally within practical reach of many firms. Innovative firms are not just those with new products but also those that can modify their formal development process to accelerate change.     

PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices

Product development professionals may have the feeling that yet another buzzword or magic bullet always lurks just around the corner. However, researchers have devoted considerable effort to helping practioners determine which tools, techniques, and methods really do offer a competitive edge. Starting 30 years ago, research efforts have aimed at understanding NPD practices and identifying those which are deemed “best practices.” During the past five years, pursuit of this goal has produced numerous privately available reports and two research efforts sponsored by the PDMA. Abbie Griffin summarizes the results of research efforts undertaken during the past five years and presents findings from the most recent PDMA survey on NPD best practices. This survey, conducted slightly more than five years after PDMA's first best-practices survey, updates trends in processes, organizations, and outcomes for NPD in the U.S., and determines which practices are more commonly associated with firms that are more successsful in developing new products. The survey has the following objectives: determining the current status of NPD practices and performance; understanding how product development has changed from five years ago; determining whether NPD practice and performance differ across industry segments; and, investigating process and product development tools that differentiate product development success. The survey findings indicate that NPD processes continue to evolve and become more sophisticated. NPD changes continually on multiple fronts, and firms that fail to keep their NPD practices up to date will suffer an increasingly marked competitive disadvantage. Interestingly, although more than half of the respondents use a cross-functional stage-gate process for NPD, more than one-third of all firms in the study still use no formal process for managing NPD. The findings suggest that firms are not adequately handling the issue of team-based rewards. Project-completion dinners are for the most frequently used NPD reward; they are also the only reward used more by best-practice firms than by the rest of the respondents. The best-practice firms participating in the study do not use financial rewards for NPD. Compared to the other firms in the study, best-practice firms use more multifunctional teams, are more likely to measure NPD processes and outcomes, and expect more from their NPD programs.     

A Cross‐National Comparative Study of Senior Management Policy,Marketing–Manufacturing Involvement,and Innovation Performance

The marketing–manufacturing interface is important to the success of product development. This research investigates the effect of senior management policies on the effectiveness of the marketing–manufacturing interface. Based on existing literature, a conceptual framework is developed that relates senior management policies, marketing–manufacturing involvement, and new product performance. The proposed framework is contingent on the national culture of the country in which product development occurs. Structural equation modeling is used to test the framework with data from a sample of 146 U.S. marketing managers and 185 Japanese marketing managers. The results suggest that a number of senior management policies are effective in promoting joint involvement between the marketing and manufacturing functions during the innovation process. While the use of formal cross‐functional integration policies was found to promote marketing–manufacturing involvement both in the United States and Japan, team leader autonomy, team rewards, and job rotation were found to promote marketing involvement in the United States but not in Japan. On the other hand, promoting marketing–manufacturing involvement via goal clarity and promotion of teamwork proved to be effective in Japan. The results have a number of implications for product development practice. Foremost among these is the finding that, despite the fundamental ideological differences separating the marketing and manufacturing functions, senior management policies can enhance the level of marketing–manufacturing involvement, and consequently can improve the likelihood of new product success. The second implication is that the effectiveness of specific senior management policies depends on national culture. Thus, managers wishing to improve the marketing–manufacturing interface should select the policies that match the culture in which the product development project is located.     

New Product Management Practices of Small High Technology Firms

Various methods exist for managing the planning, cost estimating, scheduling and statusing of new product development projects. David Boag and Brenda Rinholm investigate whether the use of formal management procedures and structured frameworks are the most effective methods for achieving control over new product development activities. This article describes the new product development management practices of 33 small and medium-sized high technology companies. The authors employ a judgmental procedure to group the firms into three stages of development for their management of new products. Findings indicate that success at new product development is greater for more formalized companies than for companies which are less formalized or which use informal methods.     

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.     

Managers' perception of relationship management in heterogeneous markets

Relationship management holds many promises of becoming a new paradigm in marketing and management. However, the development of relationship marketing is still difficult to accomplish in heterogeneous markets, since different management practices are needed in markets ranging from homogenous segments of customers with the same preferences to customers with individual demands for customized services. This paper investigates managers' perceptions of relationship development in heterogeneous markets. Results from a survey of 135 branch bank managers show that they perceive that the more heterogeneous the market, the more difficult to achieve relationship development. The study also finds that more difficult relationship development leads branch managers to perceive a more centralized locus of realized strategy. This suggests that firm relationship development needs to focus more on customer orientation and that realized strategies need to be at a local level to support this.     

Innovative versus incremental new business services: Different keys for achieving success

In companies where new product development plays an important strategic role, managers necessarily contend with a portfolio of projects that range from high technology, new‐to‐the‐world, innovations to relatively simple improvements, adaptations, line extensions, or imitations of competitive offerings. Recent studies indicate that achieving successful outcomes for projects that differ radically in terms of innovativeness requires that firms adjust their NPD practices in line with the type of new product project they are developing. Based on a large‐scale survey of managers knowledgeable about new product development in their firm, this study focuses on new business‐to‐business service projects in an attempt to gain insights about the influence of product innovativeness on the factors that are linked to new service success and failure. The research results indicate that there are a small number of “global” success factors which appear to govern the outcome of new service ventures, regardless of their degree of newness. These include: ensuring an excellent customer/need fit, involving expert front line personnel in creating the new service and in helping customers appreciate its distinctiveness and benefits, and implementing a formal and planned launch program for the new service offering. Several other factors, however, were found to play a more distinctive role in the outcome of new service ventures, depending on how really new or innovative the new service was. For low innovativeness new business services, the results suggest that managers can enhance performance by: leveraging the firm's unique competencies, experiences and reputation through the introduction of new services that have a strong corporate fit; installing a formal “stage‐gate” new service development system, particularly at the front‐end and during the design stage of the development process; and ensuring that efforts to differentiate services from competitive or past offerings do not lead to high cost or unnecessarily complex service offerings. For new‐to‐the‐world business services, the primary distinguishing feature impacting performance is the corporate culture of the firm: one that encourages entrepreneurship and creativity, and that actively involves senior managers in the role of visionary and mentor for new service development. In addition, good market potential and marketing tactics that offset the intangibility of “really new” service concepts appear to have a positive performance effect.     

Innovation and Product Development Strategies in the Italian Motorcycle Industry

The motorcycle industry in Italy offers fertile ground for anyone interested in developing a better understanding of the role innovation plays in enhancing a firm's competitive position. This industry includes both domestic and Japanese firms, with companies ranging from high-volume manufacturers to specialty or niche producers. Firms trying to gain a competitive edge in this crowded field must contend with not only advances in product and process technology, but also the whims of fashion. In a survey of top-level marketing and product development managers from eight leading firms in the Italian motorcycle industry, Moreno Muffatto and Roberto Panizzolo explore the innovation models these firms employ to enhance their competitive position. Their study has the following objectives: categorizing the various competitors in terms of their product and market strategies and their product development and innovation strategies; highlighting differences between the methods of Italian and Japanese firms competing in this market; analyzing the relationships between firms, as well as the roles suppliers play in the various innovation strategies; and identifying the various organizational models employed by the firms in this industry. Different product and market strategies are identified on the basis of three variables: total production volume, the number of different products offered, and the number of different engine capacities offered. Using these variables, the companies in the study are categorized as volume producers, specialists, or niche specialists. The firms are further differentiated on the basis of the relative emphasis each places on product technology and design, product innovation, product variety, and time-based competition. In the firms studied, partnerships play a key role in new product development. Nearly every firm participates in joint projects, most often involving development of either an entire vehicle or an engine. Other partnerships involve firms in countries that offer emerging markets for the motorcycle industry. Organizational structures and strategies employed by the volume producers in this study include: the large product leader, who oversees concept definition and product planning; the project leaders group, which coordinates all phases of development, including activities assigned to external groups; the project managers matrix, a matrix organizational structure with a strong product orientation; and the business unit program manager, who oversees all projects within an independent business unit.     

A Survey of New Product Evaluation Models

New product development is a dynamic and lengthy process ranging from idea generation through product launch. It is quite important that product managers evaluate the viability of a new product at every stage of its development. Previous literature provides a large number of models that can be used to evaluate new products at different stages of the new product development process. These models vary with respect to their objectives, applicability to different products, data requirements, suitable environments and time frames, and diagnostics. This article presents a critical review of the models with an emphasis on these factors. The article also outlines other emerging methods that companies are using today. It concludes with managerial and research implications. © 1999 Elsevier Science Inc.