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.     

Exploring Users' Appropriateness as a Proxy for Experts When Screening New Product/Service Ideas

Despite the popularity and extensive use of engaging users in crowdvoting, very little research has been conducted into the appropriateness of users as substitutes for experts when judging ideas. Accordingly, the purpose of this paper is to investigate the appropriateness of using users as a proxy for professional experts during the initial idea screening of new product/service ideas. In other words, are users' assessments during idea screening conformant with professional experts' assessments and are they reliable as a proxy for experts during idea screening? In a comparative study, two different approaches to outsourcing the screening of wireless ideas to users are examined, including assessment by two different user panels: (1) technically skilled users and (2) technically naïve users. These two approaches were compared with the assessments made by professional experts. The results showed no conformance between users and experts when comparing their absolute scores. However, during a relative comparison (the ranking of ideas), both user panels were conformant with the professional experts. A test of the user panels' ability to select the same top ideas as the professional experts was successful, indicating good conformance between the user panels and the professional experts. This paper's contribution is knowledge of how conformant external users are compared with professional expert judges during idea screening. The results indicate that companies can employ users during the initial screening process using criteria assessment to select the best ideas for further elaboration, something that would significantly reduce the number of ideas. The paper suggests an alternative design to crowdvoting, whereby the users assess the relevant criteria.     

The Impact of User‐Oriented Design on New Product Development: An Examination of Fundamental Relationships*

Design offers a potent way to position and to differentiate products and can play a significant role in their success. In many ways it is the focus on deep understanding of the customer or user—what may be termed user‐oriented design (UOD)—that transforms a bundle of technology with the ability to provide functionality into a “product” that people desire to interact with and from which they derive benefits. Even though the importance of this type of design is gaining recognition, several fundamental relationships between user‐oriented design contributions and the new product development (NPD) process and outcomes (i.e., product) remain unresearched, although they are assumed. This article examines the fundamental relationships underlying the incorporation of a user orientation into the NPD process. The discussion is organized around UOD's impact in terms of enhancing collaborative new product development (process oriented), improving idea generation (process oriented), producing superior product or service solutions (product oriented), and facilitating product appropriateness and adoption (product oriented). Each of these is developed and presented in the form of a research proposition relating to the impact of user‐oriented design on product development. The fundamental relationships articulated concerning UOD's impact on NPD form a conceptual framework for this approach to product design and development. For practitioners, the article suggests how user‐oriented design can improve NPD through its more grounded and comprehensive approach, along with the elevated appreciation of design challenges and heightened sense of possibilities for a product being developed. For scholars, the article identifies four important areas for UOD research. In addition to the rich avenues offered for research by each of these, the framework presented provides a foundation for further study as well as the development of new measures and tools for enhancing NPD efforts.     

Knowledge Acquisition in University–Industry Alliances: An Empirical Investigation from a Learning Theory Perspective*

A firm's technological knowledge base is the foundation on which internal product and process innovations are generated. However, technological knowledge is not accumulated solely through internal learning processes. Increasingly, firms are turning to external sources in the technology supply chain to acquire the technological knowledge they need to introduce product and process innovations. Thus, the successful structuring and executing of partnerships with external “technology source” organizations is often critical to competitive success in technologically dynamic environments. This study uses situated learning theory as a basis for explaining how factors inherent to the knowledge acquisition context may affect the successful transference of technological knowledge from universities to their industry partners. Data collected via a survey instrument from 104 industry managers were used to explore the effects of various organizational knowledge interface factors on knowledge acquisition success in university–industry alliances. The organizational knowledge interface factors hypothesized to affect knowledge acquisition success in the current research include partner trust, partner familiarity, technology familiarity, alliance experience, formal collaboration teams, and technology experts' communications. Results indicate that partner trust predicts the successful acquisition of tacit knowledge but not explicit knowledge. Both forms of knowledge are predicted by partner familiarity and communications between the partners' technology experts. These findings suggest three principal managerial implications. First, although the development of a trusting relationship between the knowledge source and knowledge‐seeking parties is generally advisable, firms that seek to acquire explicit technological knowledge from their alliance partners may successfully do so without having made significant time and energy investments designed to assure themselves that they can trust those partners. The relative observability and verifiability of explicit knowledge relative to tacit knowledge may enable knowledge‐seeking parties to have greater confidence that knowledge has been acquired when partner trust is in question or has not been deliberately developed. A second implication is that, other things being equal, a knowledge‐seeking party's interests may be best served through repeated exposures to particular alliance partners, particularly if those exposures facilitate mutual understandings on relevant process‐related matters. A third managerial implication is that ongoing, broad‐based communications between the partners' technology experts should be used to effect technology transfer. A key quality of the organizational knowledge interface that promotes the successful acquisition of technological knowledge, both tacit and explicit, is multipoint, real‐time contact between the technology experts of the partner organizations. Such communications potentially enable the knowledge‐seeking party to directly access desired information through the most knowledgeable individuals on an as‐needed basis.     

Exploring the Contributions of Involving Ordinary Users in Ideation of Technology‐Based Services*

Lead users have long been acknowledged as important contributors to the market success of innovative products and services. The ability of lead users to be such effective innovators has been ascribed to a combination of adequate technological expertise and superior knowledge of the user domain so‐called use experience. Drawing on the apparent success of lead users in innovation, many companies are now attempting to involve other types of users, namely, ordinary users, for ideation at the fuzzy front end (FFE) of new product and service development. However, ordinary users do not usually possess the technological knowledge of lead users, and the existing literature provides little guidance on how to manage such user involvement or its expected contributions. The purpose of the present study is, therefore, to contribute to scholarly knowledge regarding the benefits and management of user involvement during the ideation phase of innovation in technology‐based services. More specifically, the study investigates the contribution made in this respect by “ordinary” users, as opposed to professional developers. The research questions that are addressed are as follows: (1) What contributions do ordinary users make when involved in the FFE for ideation of new technology‐based services; and (2) how is the contribution of the users affected by their knowledge of the underlying technology? The study addresses these questions through a literature review and conceptual analysis of the involvement of users in innovation in mobile telephony, followed by an empirical study using a quasi‐experimental design in which the independent variable is the users' technological knowledge of the underlying mobile telephone system and the dependent variable is the quality of the created idea‐proposals from an innovation perspective. Various scenarios involving guided users, pioneering users, and professionals are investigated. The study finds that the users' knowledge of the underlying technology has an effect on their propensity to contribute with incremental or radical new ideas. The ideas from guided users tend to be more incremental whereas the pioneering users' ideas are more radical. Contrary to the users in the guided user scenarios, the users in the pioneering user scenarios have a propensity to produce ideas that challenge the prevailing dominant logic of the company; these ideas can be used to assist the company to think in new trajectories. The paper proposes that ordinary users should not be expected to contribute ideas that can be directly put into the new product development process; rather, ordinary user involvement should be regarded as a process whereby a company learns about users' needs and is inspired to innovate. The paper concludes that user involvement can actually be a stimulus for review of a company's business strategy.     

Time-Driven Development of Software in Manufactured Goods

Microprocessors are being incorporated into an increasingly wide range of products. However, many of the companies that manufacture such products are not effectively managing software development for these embedded systems. Despite the current focus on concurrent engineering and cross-functional teams, software engineering is often poorly integrated with the rest of the product development effort. The result is usually a costly delay in the product's introduction to the market. Tomlinson G. Rauscher and Preston G. Smith describe several practices that have proved helpful for accelerating the development of products that incorporate embedded software. Managerial and economic opportunities for accelerating development of hardware-software systems involve planning for dramatic growth in products that include embedded software, cultivating in-house software knowledge, recognizing the financial effects of project decisions, and measuring project progress. Improving time to market requires hiring and developing software engineering staff and managers with the requisite knowledge of the application, ensuring that they understand the techniques for specifying requirements and design, and providing them with clear guidelines for evaluating the trade-offs between project duration, project cost, and product performance. Progress should be measured in terms of the number of components completed, rather than the number of lines of code that are written. During the development process, emphasis should be placed on managing the scheduling links between hardware and software development, obtaining user feedback about the system as early as possible, and using a flexible, ongoing review process. Development groups should establish software requirements and design parameters before they start coding, and testing should commence early in the system design process. By creating a working prototype of the user interface, developers can obtain user feedback and thereby sharpen the design specification. Effective, timely software development requires focusing greater energy and resources on development of the requirements specification. By expending this effort in the first phase of a project, the development team can minimize its use of the time-consuming code-and-debug approach to software development. In addition to breaking down a complex system into understandable pieces, a modular design supports efforts to accelerate product development. With a modular design, work on various modules can be assigned concurrently to relatively independent teams. A modular design facilitates testing of the product as well as reuse of software that was developed and deployed in previous projects.     

Factors for improving the level of knowledge generation in new product development

Globalization and other rapid changes in markets and technologies increasingly require companies to generate new knowledge in order to remain competitive. In order to innovate successfully, firms must generate knowledge faster than their rivals. This study develops and tests a conceptual model that focuses on how managerial controllable variables influence the level of knowledge generation in new product development. Based on literature and 'theory-in-use' field research in seven knowledge-intensive organizations, the authors developed research hypotheses and tested the hypotheses using data collected from 277 firms in high technology industries. The findings suggest that information technologies, organizational crisis, individual commitment, the R&D budget, and job rotation increase levels of knowledge generation, whereas lead user and supplier networks are negatively associated with the level of knowledge generation in new product development, and the influence of co-location of R&D staff is not significant.     

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.     

Design,Meanings, and Radical Innovation: A Metamodel and a Research Agenda*

Recent studies on design management have helped us to better comprehend how companies can apply design to get closer to users and to better understand their needs; this is an approach usually referred to as user‐centered design. Yet analysis of design‐intensive manufacturers such as Alessi, Artemide, and other leading Italian firms shows that their innovation process hardly starts from a close observation of user needs and requirements. Rather, they follow a different strategy called design‐driven innovation in this paper. This strategy aims at radically change the emotional and symbolic content of products (i.e., their meanings and languages) through a deep understanding of broader changes in society, culture, and technology. Rather than being pulled by user requirements, design‐driven innovation is pushed by a firm's vision about possible new product meanings and languages that could diffuse in society. Design‐driven innovation, which plays such a crucial role in the innovation strategy of design intensive firms, has still remained largely unexplored. This paper aims at providing a possible direction to fill this empty spot in innovation management literature. In particular, first it proposes a metamodel for investigating design‐driven innovation in which a manufacturer's ability to understand, anticipate, and influence emergence of new product meanings is built by relying on external interpreters (e.g., designers, firms in other industries, suppliers, schools, artists, the media) that share its same problem: to understand the evolution of sociocultural models and to propose new visions and meanings. Managing design‐driven innovation therefore implies managing the interaction with these interpreters to access, share, and internalize knowledge on product languages and to influence shifts in sociocultural models. Second, the paper proposes a possible direction to scientifically investigate the management of this networked and collective research process. In particular, it shows that the process of creating breakthrough innovations of meanings partially mirrors the process of creating breakthrough technological innovations. Studies of design‐driven innovation may therefore benefit significantly from the existing body of theories in the field of technology management. The analysis of the analogies between these two types of radical innovations (i.e., meanings and technologies) allows a research agenda to be set for exploration of design‐driven innovation, a relevant as well as underinvestigated phenomenon.     

Creating Dynamic Capability: The Role of Intertemporal Integration, Knowledge Retention, and Interpretation

Uncertainty about the ability for technological knowledge to be transformed to meet market demands, lack of complementary technologies, the lack of developed markets for a given technical feature, and other types of uncertainty add significant challenges to organizations as they develop products for future markets. In spite of these significant challenges, some organizations develop a dynamic capability in new product development that becomes a powerful source of competitive advantage and a source of renewal, growth, and adaptation as the environment changes. Many approaches to new product development (e.g., cross‐functional development teams, quality function deployment, early supplier involvement, heavyweight product development teams) address the need to integrate knowledge more rapidly and effectively within projects. These approaches do not address, however, how knowledge is integrated over time or how integration of knowledge from previous new product development efforts influences the firm's new product development performance. This study focuses on providing a greater understanding of the integrative practices that contribute to this capability in new product development. Based on insights from the innovation and learning literatures, this study proposes relationships about the influence of knowledge retention and interpretation activities on the organization's ability to integrate knowledge developed in prior new product development projects and on new product development performance. Data collected from a sample of new product development professionals are employed to test the proposed relationships among knowledge retention, knowledge interpretation, integration of prior knowledge, and new product development performance. The findings suggest that knowledge retention and interpretation activities positively impact a firm's new product development performance. In particular, practices that enable the retention and interpretation of knowledge improve new product development performance indirectly through the firm's enhanced ability to apply knowledge developed in prior product development projects to subsequent projects. Practices that enable the interpretation of knowledge in the firm's current strategic context also improve new product development performance directly. These findings lead to important implications for managing new product development.     

Signaling Strategies for Innovative Design: A Study on Design Tradition and Expert Attention

There is increasing acknowledgement that innovative product design has a positive effect on financial performance. However, innovative design may require specific efforts to aid interpretation and appreciation by the market. So far, little is known about how companies can enhance their chances of success when introducing innovative designs. This study contributes to the development of this area of research. Drawing on signaling theory, it examines the role of two types of signals that may act as enablers for market acceptance of innovative design: adherence to a national design tradition, and attention from experts and specialized media. Using data collected from Danish design‐intensive companies, findings show that design innovativeness has a positive impact on financial performance. The analyses demonstrate that the effect is reinforced if a novel design adheres to a national design tradition. In addition, novel designs will be more positively accepted if they receive attention from design experts and attract media coverage. Research also contributes to signaling theory, as it shows how intrinsic—design innovativeness and adherence to a design tradition—and extrinsic—expert and media attention—cues interact and influence financial performance. The paper concludes by discussing managerial implications, particularly in relation to the new product development process and the role of design, and by suggesting avenues for further research.     

Implementation of Industrial Process Innovations: Factors, Effects, and Marketing Implications

Recent research concerning industrial process innovations, such as robotics, expert systems, computer-aided design and manufacturing, and decision support systems, calls for greater focus on the early usage activities that often follow the adoption decision. These activities are called implementation. Implementation determines whether buyers realize the full benefits of industrial process innovations. Providers of industrial innovations may be interested in understanding the key factors influencing implementation and the nature of effects. Such knowledge would be useful not only in enhancing implementation but also in devising strategies to build market advantages. To address the knowledge need, we reviewed the large, fragmented body of work on implementation, which is dispersed across many disciplines, including process engineering, information technology, human resources management, and marketing. We then synthesized relevant findings, developing a conceptual framework and deriving propositions describing the effects of key factors on implementation. Finally, to demonstrate the usefulness of the integrated knowledge, we draw some marketing implications, specifically for new product development, market development, and relationship management.     

Development of the conceptual model of energy and utility management in textile processing: A soft systems approach

This paper aims to use soft systems methodology (SSM) to identify management support system opportunities for managing energy and utility usage in textile manufacturing processes. It presents an approach based on SSM to analyze the complex situation of developing an effective energy and utility management support system (EUMSS). This involves the identification of the scope of the system and user requirements, conceptual modeling of complex problem situations, identification of actors and decision processes, and information-needs modeling. The current study pioneers the examination of the application of SSM to the development of a novel EUMSS and contributes to the body of information systems knowledge in the context of EUMSS design. There appears to be limited academic research in the field of energy and utility system development and, in particular, in the area of EUMSS design, and none in the area of the application of SSM to EUMSS design. In addition, the modeling process could be beneficial if EUMSS design ideas could be widely shared and discussed. The identified scope and system requirements can serve as a guideline for designing and developing an effective EUMSS for textile processing.     

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.     

Team Design Thinking,Product Innovativeness,and the Moderating Role of Problem Unfamiliarity

Team design thinking in new product development (NPD) refers to a set of design-oriented principles that can be embedded in the everyday routines of NPD teams. We theorize that team design thinking enables NPD teams to develop more innovative products––products that are useful and novel––by reducing the routine and cognition-based inertia that constrains the team’s innovativeness. Through a study of 247 NPD projects, we investigate the relationships between team design thinking, product utility, and product novelty. Further, we also explore whether the team’s unfamiliarity with product contexts influences these relationships. Findings show that team design thinking is positively associated with useful products in both familiar and unfamiliar contexts, but that team design thinking is associated with product novelty only in familiar contexts. Findings also suggest that team design thinking can be framed as a dynamic capability that addresses routine and cognition-based inertia by expanding the organization’s knowledge resource base, particularly in familiar contexts. A key implication of this research is that team design thinking will influence product utility in a variety of situations, but its influence on product novelty will be evident primarily in familiar contexts.     

Developing Sustainable New Products in the Textile and Upholstered Furniture Industries: Role of External Integrative Capabilities

Environmental sustainability has become one of the key issues for strategy, marketing, and innovation. In particular, significant attention is being paid by companies, customers, media, and regulators to development and consumption of green products. It is argued that through the efficient use of resources, low carbon impacts, and risks to the environment, green products can be essential to help society toward the environmental sustainability targets. The number of green product introductions is rapidly increasing, as demonstrated by the growing number of companies obtaining eco‐labels or third party certifications for their environmentally friendly products. Hundreds of companies representing most of the industries, such as Intel, SC Johnson, Clorox, Wal‐Mart, and Hewlett–Packard, have recently introduced new green products, underlining the need to develop products that create both economic and environmental values for the firm and customers. A review of the literature shows that academic research on green product development has grown in interest. However, to date, only a few empirical studies have addressed the challenge of integrating environmental issues into new product development (NPD). Previous empirical works have mainly focused on a set of activities for the green product development process at the project level. After years of paying no or marginal attention to environmental sustainability issues, most of the companies now generally realize that it would require knowledge and competencies to develop green products on a regular basis. These knowledge and competencies can be varied, such as R&D, environmental know‐how, clean technology/manufacturing process, building knowledge on measuring environmental performance of products, etc., that may be developed internally or can be integrated through external networks. Adopting a resource‐based view of the firm, this article aims at (1) investigating the role of capabilities useful for companies to integrate knowledge and competencies from outside of the firm on green product development in terms of both manufacturing process and product design and (2) understanding whether green product development opens new product, market, and technology opportunities, as well as leads to better financial performance of NPD programs. To this end, a survey was conducted in two Italian manufacturing industries in which environmental issues are becoming increasingly important, namely textiles and upholstered furniture. A questionnaire was sent to 700 firms, and 102 useable questionnaires were returned. Results show that (1) companies engage in developing external integrative capabilities through the creation of collaborative networks with actors along the supply chain, the acquisition of technical know‐how, and the creation of external knowledge links with actors outside the supply chain; (2) external knowledge links play a key role in the integration of environmental sustainability issues into the manufacturing process, whereas capabilities such as the acquisition of technical know‐how and the creation of collaborative networks prove to be more important for integrating environmental issues into product design; and (3) the integration of environmental sustainability issues into NPD programs in terms of product design leads to the creation of new opportunities for firms, such as opening new markets, technologies, and product arenas, though not necessarily leading to improved financial performance of the NPD programs.     

Integrating Customer Requirements into Product Designs

Despite all best efforts, the design process often leads to the introduction of products that do not meet customer expectations. Although the design team typically applies customer-related information from several sources, the product design somehow fails to satisfy customer requirements. Clearly, we need to develop a better understanding of the process by which designers in large development organizations transform information about customer requirements into the final design specification. To improve our understanding of this process, Antonio J. Bailetti and Paul F. Litva examine design managers' perspectives on the sources of customer requirement information. During the evolution of a product design, the design team applies information that is endorsed by marketing and product management. Common sources of such information include commercial specifications, inferences from existing products and services, deployment studies, and external standards. When this management-endorsed information is deemed inadequate, designers supplement it by creating and sharing their own customer-related information. This local information includes the results of benchmarking function and performance, the designers' perceptions of a service provider's installed base of equipment, and validations of intermediate designs. Marketing and product management cannot easily review the local information that designers create and share in evolving a final design. This article highlights the importance of creating mechanisms for ensuring that customer requirement information from various sources is internally consistent. To meet this goal of consistency, organizations must ensure that customer requirements information produced by marketing satisfies the information processing requirements of the design community. In addition, the knowledge that designers actually apply to produce a design must incorporate customer requirement information endorsed by marketing and product management at all stages of product development.     

Process Innovation and Integration in Process‐Oriented Settings: The Case of the Oil Industry

Scholars have long argued that in new product development integrated innovation processes replace sequentially organized ones because of changing capabilities, integration of knowledge, and the increasing importance of market orientation. The intention of this paper is to study whether this also applies in process‐oriented industries. Process‐oriented settings are fundamentally different from product‐oriented ones as the emphasis is on efficiency, clear guidelines, and tacit knowledge, while radical innovation is less important. It is also less obvious why market orientation—a key driver of integration in new product development—should change the way the innovation process is organized, as there is no product to be developed in the first place. A Stage Gate Model could therefore be well‐suited to achieve more efficiency and effectiveness. In order to investigate process innovation in a process‐oriented setting, we decided to study the upstream oil and gas industry, a scale‐intensive, process‐oriented setting that substantially contrasts with traditional science‐driven industries such as biotechnology and pharmaceuticals, where patents are relevant. The particular advantage of this setting is that virtually no product innovation occurs, allowing the isolation of process innovation. Relying on five inductive case studies of major projects (BP's Prudhoe Bay, Chevron's Kern River, Conoco Philips's Ekofisk, ENI's el‐Bouri, and Shell's Troll field), we find that integration occurs in process‐oriented settings but does so for different reasons than in product‐oriented ones. Integration emerges from an innovation mode characterized by: (1) trial and error (not R&D) as the main mode of innovation; (2) the cooperation of experts from different knowledge backgrounds; (3) the development of Information and Communication Technology (ICT), which facilitates this cooperation across disciplines and projects; and (4) the need to increase efficiency as demand outstrips supply. More precisely, demand shapes reward systems and determines whether new raw materials will be used (creating new supply that requires innovation of processes in periods when demand outstrips supply). Supply and reward systems therefore create the conditions where trial and error, integration of knowledge, and ICT development mutually enforce each other, leading to the integration of the innovation process. Besides contributing to the literature on innovation the paper also offers interesting insights for managers. In order to foster innovation in process‐oriented settings they need to provide specialists with room to experiment over extended periods of time, encourage cooperation across disciplines, and create both incentives and systems to facilitate this process. Finally, managers need to consider the ability of staff to cooperate at the outset, when they set up their recruitment process.     

User toolkits for innovation

Manufacturers must accurately understand user needs in order to develop successful products-but the task is becoming steadily more difficult as user needs change more rapidly, and as firms increasingly seek to serve "markets of one." User toolkits for innovation allow manufacturers to actually abandon their attempts to understand user needs in detail in favor of transferring need-related aspects of product and service development to users along with an appropriate toolkit.
User toolkits for innovation are specific to given product or service type and to a specified production system. Within those general constraints, they give users real freedom to innovate, allowing them to develop their custom product via iterative trial-and-error. That is, users can create a preliminary design, simulate or prototype it, evaluate its functioning in their own use environment, and then iteratively improve it until satisfied. As the concept is evolving, toolkits guide the user to insure that the completed design can be produced on the intended production system without change.
Pioneering applications in areas ranging from the development of custom integrated circuits to the development of custom foods show that user toolkits for innovation can be much more effective than traditional, manufacturer-based development methods.     

Applying Hedonic Pricing Models and Factorial Surveys at Parker Pen to Enhance New Product Success

Walking the path from new product concept to successful commercialization is a tightrope act. Product developers must carefully balance a variety of factors, including predictions of consumer price sensitivity as well as which combination of product attributes will be most valued by the intended market. A well-chosen mix of analytical tools can enhance a firm's chances of accurately predicting market demand. Chuck Tomkovick and Kathryn E. Dobie describe how the integration of two product attribute assessment techniques–hedonic pricing models and factorial surveys–allows product designers to more accurately gauge price sensitivity and market receptivity to new product designs. They also describe how these analytical tools were used to improve decision-making in product development at the Parker Pen Company, and they discuss the role these tools can play in facilitating the transition from concept to commercialization. Hedonic price analysis is an econometric method for determining the value purchasers place on attributes of existing products. In product development, factorial surveys are used to identify the value members of the target market place on new product concepts and prototypes. When used in combination with identified hedonic prices, the responses to a factorial survey allow product developers to predict consumer willingness-to-pay for various combinations of new product attributes. Following development of prototypes for two new product lines, product developers at the Parker Pen Company used hedonic pricing models and factorial surveys as a means for reducing demand uncertainty and for clarifying what consumers were willing to pay for various combinations of product attributes that were under consideration. The integration and use of these techniques involved a five-step process of target market identification, product attribute identification, hedonic price estimation, administering of the factorial survey, and determination of consumer willingness-to-pay. The results of these analyses allowed Parker Pen to better focus product development efforts on those design elements for which test market customers indicated both demand and willingness-to-pay. The Parker Pen Company found hedonic pricing and factorial surveys useful for predicting both the rate and the degree of change in consumers' marginal utility for specific product attributes. The usefulness of these techniques also extends beyond the early stages of new product conception. These techniques are helpful in the development and implementation of dynamic new product marketing mix strategies, including such elements as product design, pricing, channel selection, and promotion.