Service inside: The impact of ingredient service branding on quality perceptions and behavioral intentions

Extant literature on ingredient branding is directed at tangible products but does not account for the role of services as ingredients. For B2B suppliers, however, service is emerging as the dominant route to achieving competitive advantage. The purpose of this research is to investigate how ingredient service brands impact customer preferences on B2B markets. We specifically assess how ingredients might impact industrial buyers' quality perceptions of the end product. By conducting a within-subjects scenario-based experiment among industrial buyers, we find a positive effect of the presence of an ingredient service brand on buyers' perception of the end product's service quality, whether the host brand is of higher or lower quality. The effect is stronger when the quality of the host brand is lower. Furthermore, results indicate that the host brand generally has a stronger impact on the quality evaluation of the end product meaning that an ingredient service brand cannot fully compensate for a lower-quality host brand. For managers, our findings indicate that ingredient service brands provide a cue to product quality of the end product, indirectly improving purchase intentions. As a result, branded service ingredients offer host service brands as well as ingredient service brands a potentially powerful strategy for improving competitive position in B2B markets.     

In the Eye of the Beholder? The Effect of Product Appearance on Shareholder Value

In times of convergence with regard to product functionality and performance, the appearance of a product constitutes an important source of competitive advantage. Astonishingly, only a few studies have empirically examined the relationship between design‐related aspects and firm value. Moreover, existing studies predominantly use accounting‐based and/or subjective performance measures. Against this background, the present work assesses the contribution of the three most important product design dimensions (i.e., aesthetic, ergonomic, and symbolic value) to the creation of firm value in the context of the automotive and consumer electronics industry. To do so, we examine stock market reactions to the unveiling of a new product's appearance to the public using event study methodology. In particular, we combine perceptual data at the consumer level with stock market data to examine how target consumers' perceptions of the aforementioned design dimensions are related to abnormal returns following the unveiling of a new product. Results reveal that ergonomic value is positively related to abnormal returns, while aesthetic value only exerts a significant positive effect on abnormal returns if the product also exhibits a certain degree of functional product advantage. Finally, symbolic value exerts a negative influence on stock market reactions. These findings have important implications for the allocation of design‐related investments to aesthetic, ergonomic, and symbolic design features.     

Consumer Response to Product Form in Technology‐Based Industries

Product design is a key driver of competitive advantage and new product success. Relative to its importance, product design remains an underresearched area. The authors address this issue by examining the moderating effects of consumer innovativeness and design acumen on consumer response to product form—i.e., the product's visual appearance. Using subjects from the United Kingdom, these effects were tested with a technology‐based product that is expected to be introduced to market in the near future. A technological innovation was chosen because such products are often characterized by an accelerating pace of innovation and shortening life cycles. In such contexts, the product's visual appearance is often critical to success because it drives inferences about the technical capabilities and functional novelty. Our findings indicate that for more innovative consumers, an innovative product form can further enhance perceived value, product liking, and purchase intention. Furthermore, for consumers who possess more design acumen, an innovative product form can increase perceived value and product liking. An innovative product form was not found to enhance purchase intention for consumers with higher levels of design acumen. A primary implication of the study is to consider target market characteristics such as consumer innovativeness and design acumen when selecting a product form strategy. Additional implications include involving consumer innovators in the development and evaluation of product forms and involving consumers with greater design acumen early in the product's introduction so that they may influence other buyers.     

Evaluating Customer Support During New Product Development—An Exploratory Study

Anyone who has struggled with a balky computer understands the importance of product support. Useful support for a high-tech product may take various forms, including installation, documentation, field service, user training, and product upgrades. All these forms of support share a common goal: achieving customer satisfaction with the product. To increase the likelihood of customer satisfaction with a high-tech product, a firm must carefully consider the product's support requirements during the design stage of the new-product development (NPD) effort. As Keith Goffin points out, however, relatively little research has been published about the manner in which product design influences product support. He suggests that firms may benefit from considering product support requirements during the design stage, in much the same way as design for manufacturability (DFM) techniques enable firms to increase ease of manufacture. In a survey of high-tech firms, he explores the ways in which companies evaluate product support requirements during the design stage. The study also examines whether firms use quantitative goals to focus the design team's attention on a product's support needs. To provide deeper understanding of the interrelationship between support requirements and product design, he also presents a case study involving Hewlett-Packard's development of a complex medical device. With responses from 66 companies, the survey offers the first empirical data on how companies plan for product support. Whereas DFM techniques involve consideration of manufacturability during the early stages of design, more than two-thirds of the companies in the study begin planning for support during the second half of the product development process. Only slightly more than one-half of the respondents report the use of a formal product support plan, although use of this type of document is more prevalent among the computer firms in the study. The companies in this study do not consider all aspects of support during product planning. The respondents also do not set quantitative goals for all aspects of support during the design stage. They typically set quantitative goals for service-related aspects of support—for example, product reliability targets such as annual failure rate—rather than for such support areas as user training. The survey responses identify a range of measures which could be used for performing a more comprehensive evaluation of support requirements during the design stage.     

Key Factors Affecting Customer Evaluation of Discontinuous New Products

Common sense, as well as plenty of research, tells us that customer feedback can play an important role in successful product development efforts. By understanding the key factors that affect customers' evaluations of a new product, a project team improves its chances of making the right decisions throughout the design and development effort. However, customers typically lack a useful frame of reference for evaluating discontinuous, or really new products. In all likelihood, the key factors that affect customers' evaluations of radically new products differ from those for incremental innovations. Robert Veryzer describes the results of a study that examines the customer research efforts and findings of seven firms involved in the development of discontinuous new products. This study has the following objectives: gaining insight into the customer research inputs such companies use during the development of discontinuous new products, and exploring the critical factors that influence customers' evaluations of these really new products. The subjects in this study conducted relatively little formal customer research during the early stages of the NPD projects. The methods used for obtaining customer input during the concept generation and exploration stages were primarily qualitative. Although the companies in the study still did not focus consistently on customer issues during the technical development and design stage, the less discontinuous projects did use such traditional quantitative techniques as concept tests, clinics, and experiments during this phase of NPD. Throughout the projects in this study, the real opportunities for obtaining customer input came during the prototype testing and commercialization phases of the NPD projects. Several key factors appeared to influence customer evaluations of the products that were being developed by the NPD teams in this study. Lack of familiarity was manifested in customers' resistance to the new products in the study. Similarly, unfamiliarity with these new products often seemed to lead customers to focus on product attributes that development team members viewed as relatively unimportant. Other factors that affected customer evaluation of the products in this study included customer uncertainty about the benefits and risks associated with the product, customers' ability to understand how the product operates, perceptions of the product's safety, and product aesthetics.     

Measuring New Product Success: The Difference that Time Perspective Makes

Management is often criticized for overemphasizing short-term profits at the expense of long-term growth. On the other hand, although numerous studies have explored the factors underlying new product success and failure, such studies rarely distinguish between short- and long-term success. In fact, little research has been conducted to explore the relationship between a company's time perspective and its choice of criteria for measuring new product success. For that matter, little consensus exists as to just what we mean by the term success. Expanding on work done by a PDMA task force on measurement of new product success and failure, Erik Jan Hultink and Henry S.J. Robben identify 16 core measures of new product success. In a survey of large Dutch companies, they explore managers' perceptions of new product success, hypothesizing that the importance attached to each of the 16 core measures depends on the company's time perspective. For example, they propose that criteria such as development cost and speed-to-market are more important in the short term, and return-on-investiment (ROI) is more important in the long term. The study also examines the type of market served, the innovation strategy, and the perceived innovativeness of the company's products. It is hypothesized that these factors will influence the importance the company attaches to the core measures of new product success. For example, it is expected that speed-to-market is probably more important for technological innovators than for fast imitators or cost minimizers. The findings support the hypothesis that the firm's time perspective influences the perceived importance of the core measures of success. For the short term, the respondents emphasize product-level measures such as speed-to-market and whether the product was launched on time. In the long term, the focus is on customer acceptance and financial performance, including attaining goals for profitability, margins, and ROI. Four factors are perceived as being equally important for short-term and long-term success: customer satisfaction, customer acceptance, meeting quality guidelines, and product performance level. Customer satisfaction was found to be the most important measure, regardless of a company's time perspective. Contrary to expectations, the perceived importance of the 16 core measures does not differ on the basis of the type of market, the innovation strategy, or the product's perceived innovativeness. In addition, the firm's functional orientation—technology push or market pull—does not affect the importance attached to the core measures of new product success.     

Product Design Innovation and Customer Value: Cross‐Cultural Research in the United States and Korea

Innovation is one of the key drivers of success that a firm must utilize to develop a competitive advantage. The ability to innovate is especially important for a firm's survival in dynamic, changing environments. Customer demands are constantly changing, and more purchases are made when a firm's product design incorporates what customers perceive as cutting‐edge innovations. Satisfying customer demands is a distinct challenge for product designers because firms must develop a clear understanding of what aspects of design the customer wants. Although the importance of design has increased, very little research has been done to explain the relationship between product innovation and product design. Studies indicate that design innovation may create greater customer value through improvements in design value. Previous research has been limited and has not provided a clear concept of design innovation or defined the relationship between design innovation and marketing competencies. This paper seeks to offer a conceptual definition of design innovation, and to define the link between design innovation and marketing competencies. This paper utilizes cross‐cultural research to discover how these concepts differ due to cultural differences between the United States and Korea. This research contributes substantially to our understanding of the relationship between design innovation and customer value.     

Innovation Aesthetics: The Relationship between Category Cues,Categorization Certainty,and Newness Perceptions

Recent research notes a disconnect between what marketers deem new and innovative versus what consumers actually perceive. Many factors may contribute to this; however, the factor that has significant potential to first attract a consumer to a new product, visual aesthetic design, is investigated in this research. Findings from four studies indicate that if a consumer cannot affix a category label to a new product with certainty, as can happen with innovative aesthetics, a product's newness will be underappreciated and product evaluations will suffer. By utilizing a categorization framework and specifically accounting for the role of categorization certainty, insight into the effects of innovative visual aesthetics and why newness perceptions are inherently subjective, and therefore, potentially hazardous to new product adoption, is provided.     

Seller–Buyer Interactions During the Commercialization of Technological Process Innovations

For buyers and sellers alike, high-tech process innovations can be a double-edged sword. On the one hand, technological process innovations (e.g., computer hardware and software, factory automation equipment) offer buyers the potential for reduced production costs and enhanced product quality. However, early adoption of such innovations is often a risky proposition. For the seller, successful commercialization requires stimulating not only adoption, but also successful implementation of the innovation. In other words, effective management of seller—buyer relations during the development and commercialization process go a long way toward determining the success of a high-tech process innovation. Gerard A. Athaide, Patricia W. Meyers, and David L. Wilemon examine the relationship marketing activities employed by successful sellers of high-tech process innovations. They identify eight strategic marketing objectives that underlie these relationship marketing activities: product customization, information gathering on product performance, product education and training, ongoing product support, proactive political involvement (to encourage support for the innovation from the various affected parties in the buyer's organization), product demonstration and trial, real-time problem-solving assistance, and clarification of the product's relative advantage. Their findings suggest that successful sellers engage in relationship marketing activities throughout all phases of the commercialization process. Rather than simply trying to close a deal, these firms seek active involvement from potential customers, ranging from codesigning of products to seeking feedback on product-related problems or desired modifications. This broader scope of customer involvement necessitates cooperation among various groups in the seller's organization. Product development and engineering work closely with the customer during product customization. Those groups must communicate effectively with the salespeople who demonstrate the product and with the customer support people who obtain feedback and provide real-time problem-solving support. In other words, these relationship marketing activities cut across functional barriers. Consequently, a clear understanding of the buyer's needs and environment is essential throughout the seller's organization, not just in the sales and marketing departments.     

The Importance of an Innovative Product Design on Customer Behavior: Development and Validation of a Scale

The importance of innovative product design (IPD) has increased in recent years because customers' decision‐making factors have changed from product price to product design. However, a definition and measurement of IPD have not been developed adequately. Building on the customer perspective, this study defines IPD and develops its standard measurement with three product design attributes: aesthetics, features, and ergonomics. Results of the empirical test indicate strong evidence for the reliability and validity of the measurement. Overall, this study shows that our measurement captures unique customer perceptions on product innovativeness from the product design. Additionally, theoretical and practical implications are discussed.     

Toward a Model of New Product Preannouncement Timing

For products and services ranging from software to the latest motion picture, the use of new product preannouncements (NPPAs) has become commonplace. In the weeks and months (and perhaps years) before the release of a new product, a company may share information with various groups, including customers, competitors, and producers of complementary products. These prelaunch communications serve various purposes—for example, building interest for the new product, obtaining feedback from customers, or encouraging consumers to delay purchases until the new product becomes available. Despite the key role that NPPAs play in the successful release of new products, however, almost no research has been conducted to explore the proper timing for such communications. Bryan Lilly and Rockney Walters provide a starting point for these investigations, by describing the elements of an NPPA and presenting a model of the factors that influence NPPA timing. Drawing on existing research and interviews with managers from firms in a wide range of industries, they offer insights into the nature and the timing of NPPAs, and they provide recommendations for improving the effectiveness of NPPAs. Their conceptual model lists four sets of factors that affect NPPA timing: expected reactions of competitors; product-related factors, such as the product's complexity and innovativeness; buyer-related factors, such as the length of the buying process; and firm-related factors, including final determination of the product's feature set. The relative strength of these effects depends on the objectives and the audience for the NPPA. For example, a late NPPA—that is, one close to the product's release date—effectively shields a new product from rapid competitive responses. On the other hand, an early NPPA allows channel members and customers to gain familiarity with complex or innovative products. Their findings suggest that early NPPAs are most appropriate for complex or highly innovative products as well as those that carry high, but avoidable switching costs for buyers. Late NPPAs are recommended if the firm expects sales of the new product to cannibalize those of existing products. Late NPPAs are also appropriate if a product's feature set is not yet frozen. To improve the effectiveness of NPPAs, managers must clearly define their objectives and carefully match the timing and the content of the NPPA to the target audience.     

Augmenting innovation project portfolio management performance: the mediating effect of management perception and satisfaction

Firms face the challenge of efficiently and effectively investing scarce resources in innovation projects in order to sustain or develop a firm's long‐term competitive advantage and sustainable growth. Innovation project portfolio management (IPPM) describes a firm's dynamic capability to assess the challenge of evaluating, selecting, and prioritizing innovation projects. The particular impacts of method usage, criteria usage, IPPM design, information availability, and internal interactions on management perception and satisfaction as well as on IPPM performance and innovativeness are hypothesized and tested. We found that methods and criteria play a negligible role in the IPPM context. IPPM design elements, like transparency and formality, are key drivers of high IPPM performance. Information availability is a key construct in driving IPPM performance, as well as management perception and satisfaction. Relevance of IPPM is supported by revealing IPPM performance's positive impact on firm performance, innovation project performance, and firm's innovativeness.     

Adoption of New Products by the Sales Force: The Construct, Research Propositions, and Managerial Implications

Some firms take salesforce commitment to any new product as a given, seemingly adopting the attitude, “If we build it, they will sell.” However, management has no guarantee of salesforce commitment to a new product. For various reasons, salespeople may fail to sell a new product, or they may engage in dysfunctional behavior during the selling process—for example, misrepresenting the product's benefits to gain short-term sales. Ensuring salesforce adoption of a new product requires careful consideration of the characteristics of the product, the competitive environment, the firm, and the members of the salesforce. In other words, managers who hope to engender support for a new product would do well to view the salespeople as a first line of customers. Successfully launching a new product to the company's salesforce requires the same high levels of creativity, energy, and managerial insight as does the product's launch into the marketplace. Consequently, managers and researchers need to examine more closely the factors underlying the successful launch of a new product to a firm's salesforce. As a first stop toward gaining greater insight into those factors, Kwaku Atuahene-Gima develops a model for exploring the characteristics that affect new-product adoption by the salesforce. His model suggests that a salesperson's commitment to a new product depends, to a large extent, on the salesperson's learning style, performance orientation, and problem-solving style. For example, he proposes that, compared to their colleagues with systematic problem-solving styles, salespeople with intuitive problem-solving styles are more likely to adopt a new product and are less likely to engage in dysfunctional behavior in the selling process. The model also suggests that the salesforce's perceptions of the firm's commitment to new products, tolerance for failure, and attitude toward intradepartmental conflict during the product development process play key roles in determining whether the salesforce will take an active, positive approach to selling the new product. For example, a firm that views occasional failures as opportunities for learning and growth offers an environment in which salespeople can accept the risks that selling a new product entails. The proposed model also takes into account the moderating effects of the product's innovativeness, the intensity of market competition, and the type of sales control systems that the firm uses.     

Integrating the Kano model into a robust design approach to enhance customer satisfaction with product design

The aesthetic qualities of products are critical factors in achieving higher customer satisfaction. This study presents a robust design approach incorporating the Kano model to obtain the optimal combination of design form elements. This can effectively enhance customer satisfaction and aesthetic product qualities with multiple-criteria characteristics. The Kano model is used to better understand the relationship between performance criteria and customer satisfaction, and to resolve trade-off dilemma in multiple-criteria optimization by identifying the key criteria in customer satisfaction. The robust design approach combines grey relational analysis with the Taguchi method to optimize subjective quality with multiple-criteria characteristics. This simultaneously yields the optimal aesthetic performance and reduces the variations in customer evaluations. Based on Kano model analysis, a weight adjustment process determines the weight of each product criterion for achieving the desired customer satisfaction performance. This process guides the prioritizing of multiple criteria, leading to higher customer satisfaction. A mobile phone design experiment was conducted to verify the benefits of using the proposed integrative approach. Results show that the generated optimal mobile phone design can effectively enhance overall aesthetic performance and customer satisfaction. Although mobile phone designs are the examples of this study, the proposed method may be further used as a universal robust design approach for enhancing customer satisfaction and product quality with multiple-criteria characteristics.     

Concurrent pricing and lot sizing for make-to-order contract production

This paper develops a model for the simultaneous (i.e. concurrent) determination of the inventory and pricing policies of a supplier, which produces and supplies a product to a buyer, on the basis of a contractual agreement, calling for the delivery of a specific quantity periodically. Assuming that the customer is rational, i.e. it follows its own optimal purchasing policy, the objective of the supplier is to determine the product's selling price, in conjunction with an appropriate production/inventory policy, so that a predetermined gross profit level is achieved. It is further assumed that the supplier's production batch size is an integer multiple of the buyer's order quantity. In formulating a mathematical model of this situation, the interactions between the product's price, the buyer's economic order quantity and the supplier's selling price, costs and profit are taken into account. For solving this model, a simple iterative algorithm is proposed, which is illustrated through a numerical example. Sensitivity analysis performed on the model demonstrates that it is relatively robust and quite insensitive to errors in estimating the buyer's ordering to carrying cost ratio on the part of the producer.     

When Visual Product Features Speak the Same Language: Effects of Shape‐Typeface Congruence on Brand Perception and Price Expectations*

Recent studies in marketing research and consumer psychology indicate that congruence, as opposed to incongruence, of symbolic meanings connoted across or within marketing mix elements positively affects consumer response. However, controlled studies addressing congruence effects among visual product features such as shape and typeface are nonexistent. Since consumer products comprise multiple visual elements that connote symbolic meanings, and considering that a product's visual appearance is an important determinant of consumer choice, such studies are called for. Based on processing fluency accounts, the authors argue that shape‐typeface congruence facilitates stimulus processing, thereby positively affecting perceptions of brand credibility, brand aesthetics, and brand value; the latter reflected in higher price expectations. Two studies were conducted to test these predictions. In study 1 , two shape variants and two typeface variants of a fictitious brand of bottled water connoted either luxury or casualness. Cross‐pairing the two shapes with the two typefaces resulted in four product variants, either congruent or incongruent in terms of the symbolic meanings connoted. Participants were randomly presented with one of the product variants, after which they filled out a questionnaire comprising the dependent measures. Largely in line with expectations, results revealed overall positive effects of meaning congruence on perceptions of brand credibility and price expectations. In addition to replicating the findings from study 1 using another set of stimuli, study 2 tested the prediction that meaning congruence positively affects perceptions of brand aesthetics. As in study 1 , four product variants were created by cross pairing two product shapes and two typefaces, this time connoting either masculinity or femininity. In line with the findings from study 1 , results revealed overall positive congruence effects. In addition, subsequent analyses showed that perceived brand aesthetics partially mediates congruence effects on price expectations, indicating that consumers expect to pay more for congruent variants because they are considered more attractive. The findings presented testify to the importance of careful consideration of visual product features and the symbolic meanings they connote, and stress the importance of perceived brand aesthetics. In discussing these findings, it is proposed that congruence effects and the mediating processes involved may vary across product categories and depend on consumer personality. In addition, the findings presented are discussed in relation to research indicating that moderate degrees of incongruence may be useful for attracting consumer attention and stimulating information processing. Managerial implications and avenues for future research are discussed.     

Understanding the role of service innovation behavior on business customer performance and loyalty

Providing new services to customers gives firms a competitive advantage in the market. Consequently, firms strive to develop innovative service that delivers new value propositions to customers and leads to customer satisfaction and the acquisition of new customers. The authors investigate the relationship between the innovative behavior of service providers, business customer performance, and business customer loyalty in the safety industry. The study's results show that technology-oriented and co-creation-oriented innovative behavior leads to business customer performance. Business customer performance is closely related to recommendations and re-contracts. Moreover, the degree of safety involvement has a moderate effect between service innovation and business customer performance. The findings have important theoretical and managerial implications for service innovation for researchers as well as service providers.     

Launch decisions and competitive reactions: an exploratory market signaling study

When firms launch a new product into the marketplace they often aim to find a balance between building scale and provoking extensive and quick competitive reactions. Competitors react to new products when they perceive the product introduction as hostile, committed or when they feel that the product entry will have a large impact on their profitability. The present study develops a framework that shows how strong and fast incumbents react to perceived market signals resulting from a new product's launch decisions (broad targeting, penetration pricing, advertising intensity and product advantage). The strength of the relationships between the launch decisions and the perceived market signals was expected to depend on one industry characteristic (i.e., market growth) and on one entrant characteristic (i.e., aggressive reputation). We distinguished three market signals in our framework: hostility, commitment and consequences. Signal hostility refers to the extent to which the approach used by an acting firm to introduce the new product is perceived hostile whereas the commitment signal refers to the extent to which incumbents perceive the entrant firm to be committed to the new product introduction. The consequence signal is defined as the incumbents' perception of the impact of a new product entry on their profitability. We tested our framework using cross‐sectional data provided by 73 managers in The Netherlands who recently reacted to a new product entry. The results clearly reveal which launch decisions create which market signals. For example, incumbents consider high advantage new products hostile and consequential. Penetration pricing and an intense advertising campaign are also considered hostile, especially in fast growing markets. Broad targeting is not perceived hostile, especially not when used by entrants with an aggressive reputation. In addition, this study explored the impact of three perceived market signals on the strength and speed of competitive reaction. The results reveal that perceived signals of hostility and commitment positively impact the strength of reaction, whereas the perceived consequence signal positively impacts the speed of reaction. The article concludes with the implications of our study for managers and academics. The relevance to managers was assessed from both the perspective of the incumbent firm that must defend, and that of the rival firm that is introducing the new product.     

PDMA Success Measurement Project: Recommended Measures for Product Development Success and Failure

Success is not just elusive; it is also multifaceted and difficult to measure. A firm can assess the success or failure of a development project in any (or all) of many terms, including customer satisfaction, financial return, and technical advantage. To complicate matters, success may be measured not only at the level of the individual project, but also at the program level. With so many variables to consider and so many stakeholders involved, managers face a difficult challenge just deciding which measures are useful for measuring product development success. Recognizing that no single measure suffices for gauging the success of every product development project, Abbie Griffin and Albert L. Page hypothesize that the most appropriate set of measures for assessing project-level success depends on the project strategy. For example, the objectives (and thus, the success criteria) for a new product that creates an entirely new market will differ from those of a project that extends an existing product line. Similarly, they hypothesize that the appropriate measures of a product development program's overall success depend on the firm's innovation strategy. For example, a firm that values being first to market will measure success in different terms from those used by a firm that focuses on maintaining a secure market niche. To test these hypotheses, product development professionals were presented with six project strategy scenarios and four business strategy scenarios. For each project strategy scenario, participants were asked to select the four most useful measures of project success. For each business strategy scenario, participants were asked to choose the set of four measures that would provide the most useful overall assessment of product development success. The responses strongly support the idea that the most appropriate measures of project-level and program-level success depend on the firm's project strategy and business strategy, respectively. For example, customer satisfaction and customer acceptance were among the most useful customer-based measures of success for several project strategies, but market share was cited as the most useful customer-based measure for projects involving new-to-the-company products or line extensions. At the program level, firms with a business strategy that places little emphasis on innovation need to focus on measuring the efficiency of their product development program, while innovative firms need to assess the program's contribution to company growth.     

Marketing Ignorance and the Validity of Narver and Slater's MKTOR Scale in High‐Tech Russian Firms

A firm's market orientation is an important factor influencing its ability to successfully develop and introduce new products. To measure market orientation, Narver and Slater's MKTOR scale has been accepted in the literature as a valid and reliable scale. In fact, it can be considered state of the art. This study, though, challenges the validity of that scale in high‐tech industries and transition economies. As part of a larger study, the scale was used to measure the market orientation of 10 Russian high‐tech small‐ and medium‐sized enterprises, next to other measures of market orientation. These were the respondent's perceptions of their market orientation; the firm's philosophy on selling goods/services or solving customer problems; and in‐depth interview questions on goals, strategies, network ties, targeted market segments, and competitive advantage. It was found that the firms obtained high scores on the MKTOR scale but that these scores were accompanied by ideas and behaviors reflecting a low or even lacking market orientation. On a scale from 1 to 7, the firms average 6.2 on customer orientation, but at the same time, they are not aware that they do not have customer‐focused strategies and do not fully understand the chain in which they operate. Further, the average on competitor orientation is 5.4. Some firms have competitor‐oriented characteristics, but others are ignorant of their competition and believe in their technological superiority as a source of competitive advantage. Analyzing these anomalies, it is concluded that the scale requires a minimum level of marketing knowledge of respondents. Without such knowledge, the MKTOR scale is susceptible to the respondent's unconscious incapability, thereby producing invalid results. In the 10 Russian cases, the respondents did not have much experience or education in marketing, which explains why they were incapable of adequately answering the items of the MKTOR scale. The results of this study help to explain the ambivalent findings in the literature about the effect of market orientation on innovation and new product development in high‐tech sectors and transition economies. The paper concludes with suggestions on how market orientation could be better measured in such contexts. It is suggested to replace the Likert‐scale by a semantic differential scale, where statements reflecting product, production, and sales orientations are confronted with statements reflecting a market orientation. Given the importance of experience and education in marketing as positive antecedents, measures of these factors should be included in the scale as well. With these adaptations, measures of market orientation will be more factual, will require less knowledge of marketing terminology, will reduce bias caused by respondents' perceptions, and will prevent ambiguity in terminology.