Customer‐Perceived Positioning Effectiveness: Conceptualization,Operationalization, and Implications for New Product Managers

An extensive body of literature documents that positioning is a central success factor for the launch and overall performance of new products in the marketplace. Under certain circumstances, however, the measurement of positioning success can be problematic. Specifically, the application of attribute‐based measurement methods, which are frequently used in practice for this purpose, is subject to limitations in certain situations. For example, these methods can be problematic in product categories where products are evaluated as a whole or where they even lack attributes that create valuable differentiation. Their application can also be difficult in product markets in which the importance of product attributes is constantly shifting or in a cross‐national context where the importance of various attributes is likely to differ across countries. This paper introduces a new approach for measuring positioning effectiveness that helps overcome some key limitations of extant approaches and serves as a support tool for positioning‐related decisions. Positioning effectiveness is modeled as a customer‐based multidimensional construct capturing conceptually relevant dimensions of positioning success (namely dissimilarity, uniqueness, favorability, and credibility) at the holistic product level rather than the individual attribute level. Altogether seven studies show that the proposed positioning effectiveness measure is reliable, valid, and viable to be used across various types of branded products and distinct product categories. The results of the studies indicate the measure's ability to successfully predict important consumer behavior variables such as overall superiority or purchase intentions and demonstrate superior predictive performance compared with common attribute‐based approaches. The recognition of the relevance of different dimensions of positioning effectiveness should also enable new product managers to detect strengths and weaknesses of a product's current positioning, and thus serve as a tool to develop more effective product strategies. The general nature of the measurement instrument makes it particularly suitable for application in (1) longitudinal product‐tracking studies; (2) cross‐national studies involving comparisons of positioning effectiveness between products in different countries; (3) product categories characterized by technological turbulence (and hence attribute instability); and (4) studies aimed at comparing the positioning effectiveness of different products in a portfolio. Boundary conditions for the application of the measure and potential areas for further study are finally considered.     

Designing supply chains: Towards theory development

This paper describes a typology for designing supply chains that work in harmony to design, produce, and deliver products with different characteristics and customer expectations. This research discusses supply chain types that are necessary for success across three types of products: standard, innovative, and hybrid. It develops a framework for categorizing the supply chain types according to product characteristics and stage of the product life cycle. The key success factor for a product change as the product moves through its life cycle, and this may require different supply chain characteristics and capabilities. The paper blends literature and theory development with cases study research to create the typology and develop a set of research questions for further investigation.     

MULTIPROJECT STRATEGY AND SALES GROWTH: THE BENEFITS OF RAPID DESIGN TRANSFER IN NEW PRODUCT DEVELOPMENT

This paper explores the impact on sales growth of different product development strategies, especially an approach that focuses on the coordination of multiple projects that overlap in time and share critical components. The data for our analysis comes from the automobile industry, although the principles we discuss should apply to any industry where firms compete with multiple product lines and where the sharing of components among more than one distinct product is both possible and desirable. Some firms compete by trying to develop ‘hit’ products in isolation, with little or no reuse of components or coordination with other products. Another way to compete is to leverage a firm’s investment in new technologies across as many new products as possible as quickly as possible, while the technologies are still relatively new. This paper proposes a typology that captures this effect by categorizing product development strategies into four types: new design, rapid (or concurrent) design transfer, sequential design transfer, and design modification. An analysis of 210 projects from the automobile industry between 1980 and 1991 indicates that firms utilizing the rapid design transfer strategy—quickly leveraging new platform components across multiple projects–increased sales more than when they or their competitors did not use this strategy. The study’s results suggest that not only the sharing of technology among multiple projects but also the speed of technology leveraging are important to sales growth. © 1997 by John Wiley & Sons, Ltd.     

The Effect of Product Design Activities on Commercial Success Levels of New Industrial Products

Previous research has investigated the link between product success and key steps in the new products development process. Because the design/development phase of this process uses large proportions of resources, it has been carefully scrutinized. Nevertheless, the impact on new product success levels of an important aspect of this phase—the technically oriented design steps—has not been comprehensively examined and has been neglected in favor of such nontechnical dimensions as the marketing/R&D interface problem. Richard Hise, Larry O'Neal, James McNeal and A. Parasuraman report the results of a study of 195 new industrial products. They conclude that new product developers may jeopardize the success potentials of new industrial products by not performing specific design steps and by instituting an incomplete design/development agenda.     

Strategies of Innovation and Imitation of Product Languages*

Nowadays, design is recognized as a strategic resource. Customers are increasingly paying attention to the aesthetic, symbolic, and emotional value of products, a value that is conveyed by the design language—that is, the combination of signs (e.g., form, colors, materials) that gives meaning to a product. As a consequence firms are devoting increasing efforts to define a proper strategy for the design language of their products. An empirical analysis was conducted on the product language strategies in the Italian furniture industry; in particular, the present article explores the relationship between innovation and variety of product languages. Companies are usually faced by two major strategic decisions. The first one concerns the innovation of product languages: To what extent should a firm proactively propose new design languages or, rather, should adopt a reactive strategy by rapidly adopting new languages as they emerge in the market? The second decision concerns the variety and heterogeneity of languages in their product range. Should a firm propose a single product language to communicate a precise identity, or should it explore different product languages? Of course, the two strategic decisions—innovativeness and variety of product languages—are closed connected. Analyzing more than 2.000 products launched by 210 firms, the present article explores how the variety of product languages is approached in the strategy of innovators and imitators. The empirical results illustrate an inverse relationship between innovativeness and heterogeneity of product signs and languages. Contrary to what is expected, innovators have lower heterogeneity of product languages. They tend to be strongly proactive and limit experimentations of new languages in the market. Imitators, instead—which would be expected to have low variety since they can invest only in languages that have been proven successful in the market—tend on the contrary to have higher product variety. Eventually, by having lower investments in research on trends of sociocultural models, they miss the capability to interpret the complex evolution of products signs and languages in the market. Strategic decisions on innovativeness and variety of product languages are therefore interrelated; counterintuitively companies should carefully analyze these decisions jointly.     

The dynamics of product innovation and firm competences

This study examines how product innovation contributes to the renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high‐tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path‐dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation. Copyright © 2002 John Wiley & Sons, Ltd.     

Leadership Differences in New Product Development Teams

Innovativeness is unlikely without skilled leaders to guide the teams which develop new products and technologies. Although the importance of leadership to innovation success is often discussed, the specific practices of effective team leaders are not. In this study, Gloria Barczak and David Wilemon focus on the roles, functions and methods employed by leaders of operating and innovating types of new product development teams. Operating teams are part of the daily activities of the firm, are involved with current markets and develop products similar to current product offerings. Innovating teams do not routinely engage in day-to-day activities. They pursue new markets and develop products quite different from existing ones. The results suggest that successful leaders of both types of teams perform similar roles and functions. However, the methods they use to achieve them vary by the type of new product development team.     

Collapsing New Product Development Times: Six Case Studies

Today's customers are sophisticated. They demand product variety, functionality and performance. To survive in this arena, successful companies in a global economy must rapidly introduce new products (new product lines or improvements to existing lines) by collapsing their product development times. Vincent Mabert, John Muth and Roger Schmenner report results from a comparative case study of six new product introduction projects at six different firms, identifying those elements that are important to product introduction lead time and how they are influenced by customer and organizational and technical factors. They note that the new product innovation process is very complex, sensitive to external forces like customer demands or expectations and to internal issues like how team leadership is defined for the development team. The article describes the participating companies and analyzes the six projects with particular attention to four structural elements: motivation, workings of teams, external vendor's cooperation with the teams and project control. The authors conclude by identifying the top priority factors influencing new product introduction time.     

New Product Strategies of Large, Dominant Product Manufacturing Firms: An Exploratory Analysis

Although researchers have expended considerable effort exploring the links between new product strategy and firm-level performance, most studies of this subject focus on small- to medium-sized firms. Compared to smaller firms, however, large companies typically maintain broader portfolios of products and have easier access to capital markets. Such fundamental differences suggest the need for closer examination of the relationship between new product strategy and the performance of large firms. Based on a study of 459 new products introduced during a 5-year period, Richard W. Firth and V. K. Narayanan profile the new product strategies of 18 large companies. They examine the methods used to acquire new products (internal development or external sources) as well as three dimensions of each firm's new product introductions: newness of embodied technology, newness of market application, and innovativeness in the market. In other words, these profiles identify the degree to which a firm's new product introductions involve core technologies and markets that are new to the firm, as well as the degree to which the market views these products as innovative. Because new product strategy is an investment decision, the study also examines the relationship between these strategic profiles and two facets of firm-level performance: risk and return. The study identifies five archetypes of new product strategy: Innovators, who produce innovative products by using their existing resources; Investors in Technology, who focus on expanding their technological base. Searching for New Markets, firms that venture into unfamiliar markets by introducing products closely aligned with those in their existing portfolios; Business as Usual, firms that rely on existing technologies and products to serve existing markets; and Middle-of-the-Road, firms content to introduce new products rated as low to moderate along all three dimensions of the strategic profile. For new products closely aligned with their core markets and technologies, the firms in this study typically rely on internal development. To introduce products involving new technologies or market applications, they turn to acquisition from external sources. Firms that emphasized market innovativeness in their new product introductions enjoyed higher returns than less innovative firms. And contrary to conventional wisdom, they gained this advantage without an accompanying increase in risk. In other words, continual innovation might provide a large firm with the means for achieving higher returns without higher risk.     

A dynamics-based approach to solutions typology: A case from the aerospace industry

The process of servitization for manufacturing firms has been studied to help improve understanding as to how manufacturing firms can combine products and services in order to provide business solutions for their customers. Several proposals as to a typology for business solutions have been made. Typologies proposed are static in nature rather than dynamic. The aim of this paper is to propose a typology of the dynamic solution process, taking the aerospace industry as an appropriate context of analysis. A qualitative and exploratory research is adopted, using a case study approach. A triadic approach is applied in the selection of cases in order to capture the multi-actor base element of the network and solution dynamics. The data reveals four different time-based categories of business solution: 1) solutions before manufacturing; 2) solutions for manufacturing; 3) solutions for product performance and 4) solutions for innovation. This paper has theoretical and managerial contributions by presenting a typology for business solutions as a variable combination of products, services and developments over time.     

Expert Systems: An Emerging Technology for Selecting New Product Winners

Sundaresan Ram and Sudha Ram describe INNOVATOR, an expert system that they have developed to assess the success potential of new products in the financial services industry. They provide details on key aspects of the system: how knowledge is collected from experts and encoded; how a user interacts with the system to obtain recommendations on specific new products; and how the inference engine of the system arrives at the final recommendation. They discuss how INNOVATOR can, if necessary, be linked to external databases for additional data inputs. The authors also recommend alternative ways of eliciting the expertise of new product planners and different ways of programming their knowledge into the system. They highlight the key advantages that an expert system provides over conventional new product planning models. With its ability to detect potential winners early, an expert system like INNOVATOR can significantly contribute to the new product development process.     

Services growth options for B2B product-centric businesses

Many B2B companies that have traditionally been product-centric businesses (PCBs) are addressing the services opportunity (servitization), providing services aligned with customers' operations and/or that address products from other suppliers. The purpose of this paper is to create a new typology through which PCBs' services strategies can be categorised using these two dimensions, which is used to explore four services strategies and three growth options. Companies selling less complex products predominantly use services to enhance product differentiation, whereas those selling more complex products often undergo servitization, with opportunities and risks from each growth option. The risks of providing operations services are particularly noted since their successful provision requires significant changes to a PCB's activities. The results provide a critique of resource-based theory, specifically those resources that enable PCBs to create market differentiation through services. The importance of relational resources increases as services strategies involve products from other suppliers and customers' operations.     

Technological capability, social capital and the launch strategy for innovative products

The Launch strategy for innovative products is a crucial strategic typology adopted by many high tech firms, and which has been identified in prior research focusing on new product introduction to the market. However, the nexus between launch strategies and firm resources has gained little research attention. This article therefore aims to investigate the influence of technological capability and social capital, two key resources for innovation in high tech firms, on the adoption of a launch strategy for innovative products. Furthermore, prior research has revealed that market characteristics play a moderating role on the relationship between firm resources and company strategies; thus, this study also examines the moderating effect of market characteristics. This study takes Taiwan's integrated circuit design firms as the analytical sample. Based on a sample of ninety companies, two interesting findings have been found. First, both technological capability and social capital are associated positively with the launch strategy for innovative products. Second, while the market growth rates increase, the positive relationship between technological capability and the launch strategy for innovative products becomes weaker.     

Can All Brands Innovate in the Same Way? A Typology of Brand Position and Innovation Effort*

Product innovation is vital to ongoing brand equity and has been responsible for revitalizing many brands, including Apple, Dunlop Volley, Mini, and Gucci. While several scholars have noted the relationship between a brand's position and the form of innovation available to a firm, surprisingly no study has sought to bridge this gap. This study aims to address this issue by, first, building a typology of the innovation practices underpinning differently positioned brands and, second, exploring the strategic and tactical implications of different brand‐related innovation efforts. In so doing, this study addresses a critical question: How do differently positioned brands organize their innovation efforts? A multiple case‐study approach was used in this paper. Cases were sampled from a number of industries and across a range of different countries with a focus on business‐to‐consumer brands. Thirty‐five interviews were conducted across 12 cases. The brands studied differed in their approach to innovation (incremental vs. radical) and in their relationship to the marketplace (market‐driven and driving markets). These two dimensions result in four alternative ways of organizing the innovation effort to effectively reinforce the brand: (1) incremental and market driven (follower brands); (2) radical and market driven (category leader brands); (3) incremental and driving market (craft‐design‐driven brands); and (4) radical and driving markets (product leader brands). For follower brands, new product success is contingent upon the quality of the firm's marketing information systems and speed to market. Category leaders seek to dominate and appeal to the mass market with bold product initiatives. Craft‐designer‐driven brands aim to maintain an aura of authenticity, downplaying the commercial realities of their innovation efforts, while product leader brands seek to reaffirm their status as industry pioneers. This research contributes to the branding and new product development literature in several ways. It illustrates that differently positioned brands require the deployment of different firm capabilities and resources and a unique organizational philosophy to achieve new product success. The findings also enrich the brand extension literature through an examination of alternate bases, beyond that of product category, by which brand fit can be established. Finally, this research demonstrates how brand positioning can pose limitations on an industry leader's ability to respond to disruptive technologies. This study identifies that failed new products or brand extensions are driven by a mismatch between desired strategy and the capabilities necessary for achieving success (suggesting brand extensions are not as low risk as previously thought). As such, managers should carefully attend to brand perceptions when developing innovation strategies, particularly in relation to brand extensions.     

Performance typologies of new product projects

New product success is a vital but elusive goal for many firms. The last two decades have witnessed numerous studies into new product successes and failures in an attempt to uncover what makes a winner. Indeed, myriad characteristics, factors, and practices have been found that appear to discriminate between successful and unsuccessful new products.With few exceptions, much of this research has tended to view new product performance on a unidimensional continuum, usually financial performance (e.g., profitability). Whereas immediate profitability is no doubt an admirable goal, there are other ways of looking at a new product's performance—for example, degree of technical success, time-to-market, and its overall impact on the company.The current investigation takes a broader view of new product success. A number of measures of new product performance were captured, rather than just the single measure continuum; this resulted in a performance map with two major and quite independent underlying dimensions of performance. A typology of performance was then developed—a classification of new product projects by how well they performed: five scenarios or clusters of projects are identified on this map, each with its unique performance characteristics. We then investigate in detail each project type and probe what drives the performances of these five different clusters of projects: that is, what makes for new product success of these five project types, when success is measured in different ways. The study was undertaken in world class multinationals in the chemical industry in four countries, but its results appear to have validity across a broad spectrum of industry.     

The impact of new product launch strategies on competitive reaction in industrial markets

The importance of successful innovation for the long‐term performance of companies can hardly be exaggerated. However, we need to consider this in a dynamic setting, in which competitors do not remain passive. We find that two thirds of new product launches meet reaction by competitors after their launch. We also empirically demonstrate that the strategic launch decisions that managers take have an effect on future reaction by competitors. Following an extensive review of the literature, a propositional model is developed. In order to test this theoretical model, an ex post facto field study was designed, in which the authors obtained comprehensive information on 509 new industrial products launched in the US, the UK and the Netherlands. Competitive reaction is diagnosed in terms of changes in the marketing instruments of the competitor. A logistic regression model is estimated on the occurrence of competitive reaction with any marketing instrument. We also look at the occurrence of individual marketing instrument reactions. The data show that competitors react primarily by means of price changes. Product assortment and promotional changes are less frequent, whereas distribution policy modifications occur very rarely. The characteristics of the new product launch strategy were found to have a significant impact on both the occurrence and nature of competitive reactions. We claim that the competitive effect of radically new products and incrementally new products greatly differs. The results show that competitors fail to respond to radical innovations and to new products that employ a niche strategy. They do react if a new product can be assessed within an existing product category and thus represent an unambiguous attack. Both innovative and imitative new products meet reaction in this case. The results also demonstrate that competitors are more inclined to react to the introduction of new products that are supported by extensive communication by the innovating firm. The likelihood of reaction is also higher in high growth markets than in low growth markets. The article discusses theoretical and managerial implications of these results, as well as thoughts for future research that may add more insight.     

Industrial marketing firms and knowledge transfer: Toward a basic typology of community structures

Industrial firm boundaries are dynamic, changing with every new alliance or acquisition. As boundaries evolve, managers must develop organizational structures that effectively leverage knowledge. This paper presents and explains the analytical foundation of a typology of community structures, featuring the basic structures of Crew, Séance, and Guru. This typology is applied to three examples of knowledge transfer in industrial marketing. A competence exploitation example examines knowledge transfer between a firm and a subsidiary established primarily for increasing existing product sales in a new market. A competence creation example examines the community structures for utilizing the product and market knowledge of a subsidiary to benefit the firm's new product development decisions. The final example examines the “tech vs. touch” tradeoffs in interpersonal communication and knowledge transfer. The back-to-basics typology of community structures helps stimulate strategic thinking, and facilitates future explorations of knowledge management in industrial marketing.