New Product Development Process: A Perspective for Reexamination

In spite of the increased sophistication of new product development processes, the percentage of successful new product introductions has not improved significantly in the last two decades. This calls for a reexamination of the new products development process. Yoram Wind and Vijay Mahajan suggest 13 strategic guidelines for the development of new or modified products. These guidelines, if followed, could improve a firm's chances of developing and introducing successful new products.     

Customer Empowerment in New Product Development*

The traditional new product development (NPD) model, in which companies are exclusively responsible for coming up with new product ideas and for deciding which products should ultimately be marketed, is increasingly being challenged by innovation management academics and practitioners alike. In particular, many have advocated the idea of democratizing innovation by empowering customers to take a much more active stake in corporate NPD. This has become feasible because the Internet now allows companies to build strong online communities through which they can listen to and integrate thousands of customers from all over the world. Extant research has provided strong arguments that indicate that customer empowerment in NPD enables firms to develop better products and at the same time to reduce costs and risks if customers in a given domain are willing and able to deliver valuable input. Customer empowerment, however, not only affects the firm's internal NPD processes as reflected in the products that are ultimately marketed. Instead, it might also affect the way companies are perceived in the marketplace (by customers who observe that companies foster customer empowerment in NPD). This paper provides the first empirical study to explore how customers from the “periphery” (i.e., the mass that does not participate) perceive customer empowerment strategies. Customer empowerment in NPD is conceptualized along two basic dimensions: (1) customer empowerment to create (ideas for) new product designs; and (2) customer empowerment to select the product designs to be produced. Therefore, customers may be empowered to submit (ideas for) new products (empowerment to create) or (2) to “vote” on which products should ultimately be marketed (empowerment to select). In the course of two experimental studies using three different product categories (T‐shirts, furniture, and bicycles) both customer empowerment dimensions (as well as its interaction) are found to lead to (1) increased levels of perceived customer orientation, (2) more favorable corporate attitudes, (3) and stronger behavioral intentions. These findings will be very useful to researchers and managers interested in understanding the enduring consequences of customer empowerment in NPD. Most importantly, the results suggest that empowerment strategies might be used to improve a firm's corporate associations as perceived by the broad mass of (potential) customers. In particular, marketers might foster customer empowerment as an effective means of enhancing perceived customer orientation. Customers will in turn provide rewards, as they will form more favorable corporate attitudes and will be more likely to choose the products of empowering as opposed to nonempowering companies, ceteris paribus. Customer empowerment thus constitutes a promising positioning strategy that managers can pursue to create a competitive advantage in the marketplace.     

Web-Based Product Development Systems Integration and New Product Outcomes: A Conceptual Framework

In hopes of improving the effectiveness of their new product development (NPD) processes, many firms increasingly are eager to adopt integrated web‐based NPD systems for NPD. However, few would argue that the mere use of web‐based NPD systems substantially will improve the NPD process. But we know little about how and when these systems can be used for enhancing NPD. An organization desiring to employ the web in its NPD process can use it at varying levels of functionality and sophistication, ranging from a tool for automating manual tasks and exchanging data to a means of integrating various intra‐ and interorganizational NPD functions and processes. At higher levels of technology sophistication or integration, an organization's NPD processes will get more integrated internally, i.e., between different stages of the NPD process and with the processes of its suppliers, technology providers, etc. Such integration of both internal and external NPD processes is considered important for successful innovation. Thus, on the surface, higher levels of web‐based systems integration may seem universally desirable. However, each increasing level of integration brings with it higher costs—not only the costs of expensive technology but also costs of implementing a complicated system, redesigning intra‐ and interorganizational processes, disrupting the status quo, and spending management time and energy during implementation. Therefore, it may not be wise for firms to jump blindly on the web‐based NPD bandwagon. High levels of web‐based NPD systems integration may be created when low levels of integration may not deliver the desired results. Further, if such systems are installed without appropriate conditions within and outside the firm, it may not be possible to exploit their full potential. As such, it is important to know how much web‐based NPD systems integration is suitable for different conditions. In this article, we develop a conceptual framework that focuses on how web‐based NPD systems integration can influence the outcome of NPD and how the relationship between systems integration and outcomes can be affected by various contextual factors. For this purpose, we draw on research in areas such as NPD, web‐based information systems, and organization theory and on many discussions we had with professionals and software vendors who deal with NPD and web‐based NPD systems. The contextual factors of interest in this framework are strategic orientation of the firm, product‐related factors, business environment, organizational factors, information technology factors, and partner‐characteristics. Managerial and research implications of the framework are discussed.     

A Model of Supplier Integration into New Product Development*

In many industries, firms are looking for ways to cut concept‐to‐customer development time, to improve quality, and to reduce the cost of new products. One approach shown to be successful in Japanese organizations involves the integration of material suppliers early in the new product development cycle. This involvement may range from simple consultation with suppliers on design ideas to making suppliers fully responsible for the design of components or systems they will supply. While prior research shows the benefit of using this approach, execution remains a problem. The processes for identifying and integrating suppliers into the new product development (NPD) process in North American organizations are not understood well. This problem is compounded by the fact that design team members often are reluctant to listen to the technology and cost ideas made by suppliers in new product development efforts. We suggest a model of the key activities required for successful supplier integration into NPD projects, based on case studies with 17 Japanese and American manufacturing organizations. The model is validated using data from a survey of purchasing executives in global corporations with at least one successful and one unsuccessful supplier integration experience. The results suggest that (1) increased knowledge of a supplier is more likely to result in greater information sharing and involvement of the supplier in the product development process; (2) sharing of technology information results in higher levels of supplier involvement and improved outcomes; (3) supplier involvement on teams generally results in a higher achievement of NPD team goals; (4) in cases when technology uncertainty is present, suppliers and buyers are more likely to share information on NPD teams; and (5) the problems associated with technology uncertainty can be mitigated by greater use of technology sharing and direct supplier participation on new product development teams. A supplier's participation as a true member of a new product development team seems to result in the highest level of benefits, especially in cases when a technology is in its formative stages.     

Spurring Cross‐Functional Integration for Higher New Product Performance: A Group Effectiveness Perspective*

Spurring integration among functional specialists so they collectively create successful, or high‐performing, new products is a central interest of innovation practitioners and researchers. Firms are increasingly assembling cross‐functional new product development (NPD) teams for this purpose. However, integration of team members' divergent orientations and expertise is notoriously difficult to achieve. Individuals from distinct functions such as design, marketing, manufacturing, and research and development (R&D) are often assigned to NPD teams but have contrasting backgrounds, priorities, and thought worlds. If not well managed, this diversity can yield unproductive conflict and chaos rather than successful new products. Firms are thus looking for avenues of integrating the varied expertise and orientations within these cross‐functional teams. The aim of this study is to address two important and not fully resolved questions: (1) does cross‐functional integration in NPD teams actually improve new product performance; and if so, (2) what are ways to strengthen integration? The study began by developing a model of cross‐functional integration from the perspective of the group effectiveness theory. The theory has been used to explain the performance of a wide range of small, complex work groups; this study is the first application of the theory to NPD teams. The model developed from this theory was then tested by conducting a survey of dual informants in 206 NPD teams in an array of U.S. high‐technology companies. In answer to the first research question, the findings show that cross‐functional integration indeed contributes to new product performance as long conjectured. This finding is important in that it highlights that bringing together the skills, efforts, and knowledge of differing functions in an NPD team has a clear and coveted payoff: high‐performing new products. In answer to the second question, the findings indicate that both intra‐ (or internal) and extra‐ (or external) team factors contribute and codetermine cross‐functional integration. Specifically, social cohesion and superordinate identity as internal team factors and market‐oriented reward system, planning process formalization, and managerial encouragement to take risks as external team factors foster integration. These findings underscore that spurring integration requires addressing the conditions inside as well as outside NPD teams. These specialized work groups operate as organizations within organizations; recognition of this in situ arrangement is the first step toward better managing and ensuring rewards from team integration. Based on these findings, managerial and research implications were drawn for team integration and new product performance.     

程序公平对新产品开发成功的影响——跨职能整合的中介作用

本文通过对中外汽车合资企业的实地调研,提出将程序公平引入现有关于跨职能整合与新产品开发成功的模型中,并进一步提出跨职能整合在合资企业程序公平与新产品开发成功关系中的中介作用。通过对获取数据的分析,发现合资企业程序公平不仅可以直接影响合资企业的新产品开发成功,而且也可以通过跨职能整合间接影响新产品开发成功,而跨职能整合在程序公平与新产品开发成功关系中起中介作用。     

The Impact of Customer Involvement on New Product Development: Contingent and Substitutive Effects

More and more companies are actively involving their customers in the new product development (NPD) process. However, there is little consensus regarding the contribution of customer involvement to new product outcomes. A better understanding of this contribution can shed light on whether and when it is worthwhile to involve customers and thus provide firms better guidelines for making such decisions. This study examines the effects of two forms of customer involvement on new product outcomes: the traditional form of customer involvement as an information source (CIS) and the more active form of customer involvement as co‐developers (CIC). The authors offer a better understanding of whether customer involvement can lead to successful innovation by (1) identifying conditions that impact the effects of CIS and CIC on NPD outcomes, (2) contrasting the conditional effects of CIS and CIC to understand how they influence NPD outcomes differently, and (3) examining the potential substitutive relationship between CIS and CIC to understand their joint effects in improving innovation. They find that an experimental NPD approach that emphasizes trial and error learning moderates the relationship between customer involvement and new product outcomes. Specifically, the results reveal contrasting contingent effects of CIS and CIC: CIS is more beneficial for new product outcomes when firms take a more experimental NPD approach, whereas the effect of CIC is stronger when the NPD process is characterized with lower experimentation. CIS and CIC also substitute for each other in their contribution to new product outcomes. These findings suggest that each of the two forms of customer involvement has its unique advantages and is suitable for different conditions. When considering the adoption of CIC, firms should take into account their learning approaches as well as the effectiveness of CIS in the NPD process.     

Marketing Hype: A New Perspective for New Product Research and Introduction

Marketing research procedures typically used to support new product development activities often emphasize the collection of data from potential customers, even when the product success depends on the decisions of a number of key stakeholders such as distributors, media, etc. Consequently, most conventional product introduction efforts focus on a target customer segment and ignore the needs of other stakeholders. These narrowly concentrated research efforts can lead to unfounded expectations regarding the product performance. Similarly, the lopsided focus on consumers can lead to reduced marketing effectiveness. Jerry Wind and Vijay Mahajan argue for the recognition of the process of "marketing hype," a set of prelaunch activities leading to the creation of a supportive market environment. This can lead to the creation of broader strategies that focus on the key stakeholders as subjects for new product research, and targets for the introductory marketing programs. This could lead to a richer understanding of the intergroup influences on the adoption of the new product and increase the chances of a successful new product launch.     

Building Dynamic Capabilities in New Product Development through Intertemporal Integration

Although successful development of a given product may help explain the current success of a firm, creating longer‐term competitive advantage demands significantly more attention to developing and nurturing dynamic integration capabilities. These capabilities propel product development activities in ways that build on and develop technological and marketing capabilities for future product development efforts and create platforms for future product development. In this article, we develop a conceptual model of a dynamic integration process in product development, which we call intertemporal integration (ITI). In its most general form ITI is defined as the process of collecting, interpreting, and internalizing technological and marketing capabilities from past new product development projects and incorporating that knowledge in a systematic and purposeful manner into the development of future new products. Research propositions outlining the relationship of ITI to performance are presented. We provide specific examples of managerial mechanisms to be used in implementing ITI. We conclude with implications for research and practice. Effective management of ITI can increase new product development success and long‐term competitive advantage. This implies that management needs to engage in activities that gather and transform information and knowledge from prior development projects so that it can be used in future development projects. Project audits, design databases in computer‐aided design (CAD) systems, engineering notebooks, collections of test and experimental results, market research and test market results, project management databases, and other activities will all be important in the acquisition of knowledge from prior new product development (NPD) projects. Managers also should initiate the creation and maintenance of databases of technical and marketing information from prior projects, job performance reports, seminars and workshops related to technological issues and advances, and publication of technical journals to assist in the process of knowledge acquisition. Similarly, techniques such as assigning project managers from earlier development projects, reusing key components and technologies, and developing a company‐wide methodology for managing projects can be used to boost the application and use of knowledge.     

Interdepartmental Integration: A Definition with Implications for Product Development Performance

Improved interdepartmental integration yields improved product development performance. But what do we mean by interdepartmental integration? Is it increased interaction between the various departments involved in product development—in other words, more meetings and other formal information flows between R&D marketing and manufacturing? Or is the term integration another way of saying collaboration—that is, various departments working collectively toward common goals? Or are collaboration and interaction both important elements of interdepartmental integration? Kenneth B. Kahn presents the results of a study exploring how collaboration and interaction affect product development performance and product management (post-launch) performance. Survey respondents are marketing, manufacturing, and R&D department managers working for firms in the electronics industry. It is hypothesized that both collaboration and interaction between departments will positively influence product development performance and product management performance. It is further hypothesized that collaboration will have a stronger effect than interaction. The survey responses indicate that collaboration has a strong, positive effect on performance. (The only exception is the effect of manufacturing managers' collaboration with marketing on product development success; the effect of this variable is not statistically significant). However, interaction does not have a significant effect on product development performance or product management performance. In fact, the responses indicate negative effects for meetings and the exchange of documented information. The results support increased emphasis on company policies that facilitate collaboration between departments as opposed to those that only stress meetings and documented information exchange. Although a certain level of interaction is necessary throughout the product development process, such interaction doesn't lead to success; collaboration makes the difference between success and failure. To best manage interdepartmental integration, managers should first assess their firm's levels of interdepartmental collaboration and interaction. The scales presented in this study can be used for this benchmarking effort. The results of this assessment can be used for developing and implementing an action plan for improving interdepartmental integration. For example, a manager faced with a prevailing interaction philosophy might seek to reduce the number of meetings or the amount of paperwork flowing between departments.     

New Product Development Structures: The Effect of Customer Overload on Post-Concept Time to Market

In corporate policy statements, seminars, journal articles—even in television commercials—the message comes through loud and clear: To remain competitive, we must do a better job of listening to our customers. Through close contact with customers, designers can more accurately identify market requirements, quickly refine product specifications, and thus reduce time to market. However, too much customer input can create confusion and duplication of effort, which ultimately increases time to market. In other words, some firms run the risk of over-listening to their customers. In a study of three global players in the electronic component industry, Srikant Datar, Clark Jordan, Sunder Kekre, Surendra Rajiv, and Kannan Srinivasan explore the effects of having too much input from customers. Specifically, they examine the relationship between a company's new product development structure and the volume of customer input, which in turn can affect time to market. The high-tech, fast-cycle firms examined in this study employ two distinct new product development structures: concentrated and distributed. A concentrated structure locates all product designers in one facility. This facilitates cross-product learning among designers, but limits designers' contact with customers and process engineers. A distributed structure disperses new product development among numerous manufacturing sites, giving designers close contact with customers and process engineers. However, a distributed structure limits designers' opportunities for cross-product learning. Analysis of 220 new product efforts reveals that the distributed structure offered a time-to-market advantage as long as these firms efficiently managed the level of customer interaction. When designers received input on the product design from no more than 25 customers, the distributed structure provided shorter time to market than the concentrated structure. Beyond the 25-customer level, time-to-market performance of the distributed structure degraded quickly and at an increasing rate. In such cases, more effective management of customer interaction might allow firms employing a distributed structure to enjoy the benefits not only of customer input, but also of improved coordination between product designers and process engineers.     

Enhancing New Product Development Performance: An Organizational Learning Perspective

Several years ago, an editorial in a software industry journal asked readers, “Why aren’t they using all those marvelous methods?” The focus of the editorial was on software engineering methods, but the question also applies to the broader realm of new product development (NPD). Proven tools exist for gathering, disseminating, and using market information. But despite widespread recognition of the important role that market knowledge plays in NPD, most firms fail to employ these tools in a consistent manner.Marjorie E. Adams, George S. Day, and Deborah Dougherty contend that the tools for successful NPD cannot be implemented successfully until we understand the barriers that hinder an organization’s capabilities for learning about markets. To foster that understanding, they describe the results of a study that explores the organizational barriers to learning about markets for new products. The study examines 40 NPD efforts in 15 large firms, and it has the following goals: identifying the processes through which organizational barriers impede market learning, developing specific ideas for how NPD professionals can cope more effectively with these barriers, and offering suggestions for improving market tools and techniques to help overcome these barriers.The study identifies three organizational learning barriers: avoiding ambiguity, compartmentalized thinking, and inertia. For the participants in this study, these barriers persistently act in specific ways to inhibit market learning. In acquiring market information, people typically focus on less ambiguous, more easily understood technologies and business truisms. Dissemination of market information is hindered because people focus on their own goals, which are often defined within their department’s role instead of the overall goals of the project. Inertia acts as a barrier to the effective use of market information. That is, people tend to proceed as they always have, maintaining the status quo rather than adjusting actions to capitalize on market learning.By encouraging broad functional participation in the acquisition and interpretation of data, NPD organizations can reduce the perceived ambiguity of market information. However, cross-functional approaches are only one step in overcoming organizational barriers. Managers must enable teams to develop rich, vivid market data, help people extend established routines into new practices, and promote trust. Specific market research tools and methods that promote market learning are also suggested.     

Global Integration of Brands and New Product Development at General Motors

The rapidly globalizing marketplace reflects environmental characteristics requiring the development of unique capabilities that enable the firm to create competitive advantages. Correspondingly, this study addresses challenges faced by managers in a large company with a broad global footprint as it integrates the product development process and the portfolio of brands across geographic markets. In a global organization, the unique dynamic capabilities that need to be developed include a global orientation, global market knowledge competencies, and global coordination. The present study considers these capabilities with respect to process, position, and evolutionary history of the firm and its brands. Qualitative research methodology is employed to explore the phenomenon of moving products and brands from multidomestic to global. The findings indicate the structure of a global brand portfolio evolves through complex interactions among new product development, marketing, and brand management. Overall, the organization's current positions and past history form the basis of the ways routines, practices, and means of learning are combined and coordinated to implement product decisions that support brand objectives.     

Customer and Competitor Insights,New Product Development Competence,and New Product Creativity: Differential,Integrative, and Substitution Effects

Developing creative new products requires a synthesis among customer‐oriented and competitor‐oriented learning, and new product development competence. However, underlying this synthesis is a paradox: how to integrate both customer and competitor insights within a technology‐centric new product development process. In order to examine the nature of this organizational tension, this study develops a conceptual framework and tests a series of six hypotheses with data generated from our study of creative new products within 187 high‐technology ventures in China. Differential effects are found in the way in which customer‐oriented learning (neutral) and competitor‐oriented learning (positive) relate to new product creativity. Their integration, meanwhile, is positively related to this new product outcome. Results also reveal that new product development competence, both independently and when integrated with customer‐oriented learning, positively impacts new product creativity. However, the study also reveals a surprising finding of a substitution effect where the combination of competitor‐oriented learning with new product development competence is inversely related to new product creativity. These findings are discussed, and their implications are derived for further research and both market and technology management.     

A Survey of Major Approaches for Accelerating New Product Development

Product life-cycles are becoming shorter, leading firms to reduce the time to bring new products to market. Being early can provide a significant competitive advantage, making the acceleration of new product development (NPD) an important area for research and inquiry. Based on their review of a wide range of literatures in business strategy, marketing, new product development, manufacturing and organization management, Murray Millson, S. P. Raj and David Wilemon report a general set of techniques for reducing the developmental cycle time for new products. The article develops a hierarchy of available NPD acceleration approaches and discusses potential benefits, limitations and significant challenges to successful implementation.     

Perspective: Changing Product Development Strategy—A Managerial Challenge

By changing its product development strategies to match more closely the wants and needs of the marketplace, a firm can transform product development into a formidable competitive weapon. Just as formidible, however, is the effort that this transformation requires. Established organizational structures and corporate politics present significant barriers to acheiving fundamental changes in product development strategy. Christer Karlsson and Pär Åhlstrom present a case study of one firm's efforts to build capabilities for creating new products quickly and efficiently. Rather than focus on the content of the firm's product development strategies, however, they emphasize the process this electromechanical manufacturing firm used for changing its product development strategy. Drawing on their experiences as clinical researchers in this effort, they describe key lessons learned during the change process, and they offer suggestions for managing the process of changing product development strategy. They highlight five key lessons learned during the strategy development process. First, rather than viewing product development as a line function, a firm should view product development as a key executive area with responsibility for the company's competitive position. Second, market issues are the responsibility, not only of marketing, but also of product development and production. Third, to avoid corporate myopia, management control systems must consider not only time and money, but also acheivement of goals. Fourth, strategic planning flows more smoothly if the participants start by mapping the firm's past and present position before attempting to define the desired position. Finally, formulation of a product development strategy is the responsibility of a multifunctional team of executives. Managers should keep a few rules in mind when devising a process for formulating a product development strategy. First, adopt a learning strategy throughout the change process. Formulation of a product development strategy involves many abstract concepts, and a successful strategy requires cross-functional consensus. Second, combine tangible, direct activities with long-term strategic aims. Third, avoid the pitfall of best practice. The form that the product development organization takes depends, to a great extent, on the type of development work. Finally, before discussing future strategies, the strategy formulation process should focus on analyzing the current situation.     

New Product Development Performance and the Interaction of Cross-Functional Integration and Knowledge Management

Previous research on cross-functional integration between research and development (R&D) and marketing has focused on the development of appropriate structural modes and levels of integration and cooperation across the R&D–marketing interface. A gap in the previous research in this area has been the failure to investigate the integration of information from past related product development projects (i.e., knowledge management). In this investigation of R&D–marketing integration, variables from the emerging research literature on organizational learning and knowledge management are examined. By simultaneously investigating the effects of knowledge management variables and R&D–marketing integration, this gap in the literature is addressed. The results demonstrate that the combined effects of R&D–marketing integration and knowledge management in the form of recording, retrieving, and reviewing information from past projects results in interaction effects. In 8 of 18 tests interactions were found. In 6 of 18 tests these resulted in the form of amplification effects with dependent variables such as product prototype development proficiency, product launch proficiency, technological core competency fit, and design change frequency.     

Environmental Uncertainty, Organizational Integration, and New Product Development Effectiveness: A Test of Contingency Theory

R&D/marketing integration clearly improves new-product development (NPD) effectiveness. However, achieving this integration increases the costs of NPD efforts. If technical and market uncertainty moderate the effects of integration on NPD effectiveness, perhaps a firm can achieve NPD success in a more cost-effective manner by seeking the appropriate level of integration, based on the perceived level of uncertainty. In a study of 101 NPD projects at high-tech firms in the U.S. and the U.K., William E. Souder, J. Daniel Sherman, and Rachel Davies-Cooper explore the interplay between technical and market uncertainty, integration, and NPD effectiveness. Their study examines two types of integration: R&D/marketing integration and direct R&D/customer integration. The study measures NPD effectiveness in terms of such indicators as NPD cycle time, prototype development proficiency, design change frequency (a negative performance indicator), and product launch proficiency. The responses from both the U.S. and the U.K. firms provide balanced samples of high and low uncertainty projects, as well as successful and unsuccessful projects. The results of this study support previous research regarding the positive effects of both R&D/marketing integration and direct R&D/customer integration on NPD effectiveness. However, only one measure of NPD effectiveness—R&D comercialization effectiveness—was affected by both R&D/marketing integration and direct R&D/customer integration. This result suggests that the two types of integration are distinct from one another and that managers need to emphasize different types of integration, depending on which aspects of NPD effectiveness their firms need to improve. The results also suggest that technical and market uncertainty influence some aspects of NPD effectiveness. For example, the perceived level of technical uncertainty was found to influence prototype development proficiency and to moderate design change frequency. In other words, these results support the idea that a high level of technical uncertainty warrants paying extra attention to increasing prototype development proficiency in the interest of reducing design change frequency. However, the results also reinforce the idea that NPD activities generally involve high levels of technical and market uncertainty, which means that the high cost of integration may be a requirement for NPD success.     

创新顾客需求和产品设计开发管理的探讨

顾客需求和设计开发,决定产品定位和产品的质量。阐述了顾客需求和设计开发管理中存在的问题,说明了进行顾客需求和设计开发创新管理的必要性,并通过故障模式及影响分析的案例来说明创新管理的重要性。     

Faster New Product Development

Clearly today's business climate mandates the need for faster development of new products. Drawing upon his experience, Milton Rosenau describes several techniques that have not been mentioned explicitly in recent articles: short, focused development phases; management involvement and support; procurement and use of productivity improvements; multifunctional teamwork; distraction reduction; frozen specifications; and microcomputer-based project management software.