Successful New Product Pricing Practices: A Contingency Approach

The purpose of this study is to examine the success of new product pricing practices and the conditions upon which success is contingent. We distinguish three different pricing practices that refer to the use of information on customer value, competition, and costs respectively. Following Monroe's (1990) price discretion, we argue that the success of these practices is contingent on relative product advantage and competitive intensity. The hypotheses are tested on pricing decisions for new industrial products. Our results show that there are no general best or bad practices, but that a contingency approach is appropriate. These results may help reduce the complexity that managers experience in pricing new products.     

Improving New Product Quality: An Empirical Study of Product Development Teams in Taiwan

ABSTRACT

The role of team and organizational factors affecting new product quality and their interactions as moderating the effects are examined. Results from a domestic study suggest that new product quality is positively affected by information capability in the team and quality orientation in the firm; in contrast, it is negatively related to the innovativeness of the new product as seen by the firm and speed-to-market pressure in the team. However, teams' information capabilities alleviate the negative effect of innovativeness on quality. Quality orientation lessens the relationship between information capability and new product quality. Functional diversity and tenure diversity do not affect new product quality. In addition, managerial implications and directions for future research are proposed.     

New Product Introduction and Seasonality Effect in Food Products Retailing

ABSTRACT

This study aims to measure the effects of market demand and seasonality on new product introduction. Major factors contributing the variability of market demand and seasonality of new products have been discussed in reference to timing of introducing new products, variability of consumer preferences, retail sales, and product promotion. The study is based on 243 new products in selected self-service stores in Mexico, which belong to major food products sectors for the reference period 2002–2006. Results of the study reveal that market demand and seasonality factors are most important for the timing of new product introductions, as such conditions determine success of the new products in a given market.     

The Impact of Innovativeness and Development Time on New Product Performance for Small Firms

Timing is becoming a new source of competitive advantage. The business press extols the benefits of faster product development. This paper examines whether competitive advantage can be gained by reducing development time across all types of new products or whether this advantage is restricted to certain types of new products. It proposes that product innovativeness moderates the relationship between development time and initial market performance. A survey of 110 small manufacturing firms in computer related industries supports the hypothesis. The survey findings indicate that a firm must guard against over- or under-development of the new product since product innovativeness was found to influence the impact of development time on market performance. The implications for managers are: beware of bringing a new product that is too much, too early or too little, too late.     

Price Consciousness and Purchase Intentions for New Food Products: The Moderating Effect of Product Category Knowledge when Price Is Unknown

This study examines the degree to which consumers' price consciousness affects their purchase intentions for a newly introduced product when the price of the product is unknown. Based on data from 186 consumers exposed to a new product offering, the results show that price consciousness indeed has a negative effect on purchase intentions, but only for consumers with a high level of product category knowledge. Although perceived risk and perceived value are significantly related to purchase intentions in general, price consciousness seems to affect only those consumers who make inferences about price based on their knowledge of the product category. Both theoretical and managerial implications of the findings are offered.     

Virtual Product Placement as a New Approach to Measure Effectiveness of Placements

Product placement is a fast growing multi-billion dollar industry, yet measures of its effectiveness, which influence the critical area of pricing, have been problematic. Past attempts to measure the effect of a placement and, therefore, provide a basis for pricing of placements, have been confounded by the effect on consumers of multiple prior exposures of a brand name in all marketing communications. Virtual product placement offers certain advantages: as a tool to measure the effectiveness of product placements; as assistance with the problem in the lack of audience selectivity in traditional product placement; as a testing of different audiences for brands; and in addressing a gap in the existing academic literature by focusing on the impact of product placement on recall and recognition of new brands.     

顾客参与新产品开发的绩效影响:产品创新类型的调节效应

顾客参与企业新产品开发对新产品开发绩效有着重要影响,在处于转型经济背景下的中国进行相关研究更有着极为重要的战略意义。文章以B-B市场中的制造企业为研究对象,构建了以产品创新类型为调节变量的顾客参与对新产品开发绩效差异化影响的调节效应模型。研究表明,顾客参与对新产品开发时间绩效与创新绩效的积极影响会受到产品创新类型的调节作用;但产品创新类型对顾客参与和财务绩效关系的调节影响不显著。     

To Launch or Not to Launch: An Empirical Estimate of New Food Product Success Rate

New product introduction is one of the most important activities for a company’s growth. It is generally accepted that new product introductions are essential to the health of food companies. Yet, many believe that most new products fail, therefore discouraging companies to introduce some new products. However, most of the estimates suggesting high failure rates are either anecdotal or qualitative. This article provides a quantitative approach to measuring new product success rates for food products and to show the relationship between the success of new product and entry strategies. This article uses a quantitative approach to measuring product success/failure exclusively for food products. The authors contend that failure rates for food products are not nearly as low, and success rates much higher than it was previously established in the literature and perceived by the industry professionals. There was a significant variability of success rates between various food groups ranging from 58% for both fruit and vegetables and desserts and ice-cream categories to 88% for baby food. Success rates also varied among the different introductory strategies of the new food products, ranging from 50% for new packaging to 75% for re-launch strategies.

Academics and practitioners usually quote very low success rates for new products based on subjective and/or strictly qualitative information. This empirical quantitative research shows that success rates for food products are much higher than previously reported. This should encourage greater use of new products to grow sales and profits. The previously reported low success rate may have led to the reluctance to introduce new products and therefore set many of the legacy food companies in their current poor financial condition.     

Technology Synergy,Product Characteristics,and New Product Performance: A Meta‐Analytic Review

The associations of technology synergy, product characteristics, and new product performance are widely spread in the marketing and innovation management literatures. However, little research integrates these associations. This study adopts a meta‐analytic approach to aggregate prior findings across studies published before 2010 to review the relationships between technology synergy, product characteristics, and new product performance. Structural equation analysis reveals that technology synergy has: (a) a positive medium effect on new product performance; (b) a positive and strong impact on product advantage, which then affects new product performance; and (c) an indirect effect on new product performance through product innovativeness and product advantage. These findings suggest that product innovation and advantage are important intermediaries between technology synergy and new product performance—as yet unrevealed in extant literature. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.     

When Fiction becomes Fact: Effect of Reverse Product Placement on Consumer Attitudes

ABSTRACT

This exploratory study investigates the persuasive effects of reverse product placement (RPP)—subsequent commercialization of fictional brands from entertainment media into real world products—comparing it with product placement (PP). Persuasion Knowledge Model and Attribution theory were applied to frame hypotheses of effects on brand attitudes along with the constraining effect of skepticism. A mixed test design revealed presence of persuasion knowledge, recognition of persuasive intent, and negative effect of skepticism for PP, but not for RPP. RPP also had a stronger, positive effect on consumer attitudes. Potential application of RPP in new product development and adoption is discussed.     

Understanding Corporate Social Responsibility and Product Perceptions in Consumer Markets: A Cross-cultural Evaluation

The concept of corporate social responsibility is becoming integral to effective corporate brand management. This study adopts a multidimensional and cross-country perspective of the concept and analyses consumer perceptions of behaviour of four leading consumer products manufacturers. Data was collected from consumers in two countries – Spain and the UK. The study analyses consumers’ degree of interest in corporate responsibility and its impact on their perception about the company. The findings here suggest a weak impact of company-specific communication on consumers’ perception. The implications of this study are relevant to companies for strengthening their social responsibility associations with the consumers. Dr. Jaywant Singh is Senior Lecturer at Kingston University, London where he teaches consumer behaviour and international marketing. His research interests include customer loyalty, product variants, new brands, corporate social responsibility, and consumer panel data. He received his PhD in marketing in 2004. Dr. Maria de Mar Garcia de los Salmones is Lecturer at University of Cantabria (Spain). Her current research interests include corporate social responsibility, brand image and consumer behaviour. She received her PhD in business administration in 2002. Dr. Ignacio Rodriguez de Bosque is Professor of Marketing at the University of Cantabria (Spain). His current research interests include Business Communication, relationship marketing and distribution channels. He has published in several international journals such as Tourism, Management, Journal of Retailing and Consumer Services and Industrial Marketing Management.     

功能经济下产品服务系统的企业竞争优势研究

功能经济是欧美发达国家所倡导的发展模式。产品服务系统是在功能经济理论指导下,以提供高附加值的服务来降低产品在整个生命周期对环境的影响,并提高消费者满意度和企业竞争力,其有效性已被多家企业的成功案例所证实。本文阐述了功能经济和产品服务系统的理论内涵和分类,以案例分析的研究方法详尽分析了北美客车工业公司(NABI)实施产品服务系统所获得的竞争优势,并概括总结出一系列可供中国汽车企业采纳的产品服务系统模式及其竞争优势,为中国这个将成为世界上最大的汽车消费国可持续发展汽车行业提供了战略新思路。     

Alliance-Based New Product Development Success: The Role of Formalization in Exploration and Exploitation Contexts

Purpose: Although alliances offer tremendous strategic potential, firms still struggle to successfully manage new product development alliances (NPD alliances). A prominent explanation for this is the institutional economics' view (see Williamson 1985 Williamson, O. E. 1985. The economic institutions of capitalism: Firms, markets, relational contracting, New York: The Free Press.  [Google Scholar]) that, in general, a key disadvantage of alliances versus vertical integration is that administrative control mechanisms are weaker. Here, a key control mechanism is formalization (the use of explicit rules to govern business activities).

However, regarding formalization's influence on both NPD and alliance performance, conceptual views and empirical findings are mixed, which suggest that unexamined variables moderate formalization's influence on NPD performance.

Therefore, it is surprising that there is no research on whether formalization's influence differs in alliances pursuing an NPD exploration strategy versus an NPD exploitation strategy because both (1) require varying levels of freedom of action and adherence to procedural rules to achieve success, and (2) are extensively employed in NPD.

Further, there is also surprisingly little intrafirm NPD and non-NPD alliance research on formalization in exploration and exploitation contexts because here as well formalization's influence on performance (1) is central, and (2) differs based on the project's innovative and learning intent.

The purpose of this research is to begin to close important literature and industry practice knowledge gaps about formalization's influence on NPD alliance performance in exploitation versus exploration strategic contexts.

Originality, value, and contribution: This research is the first examination ever of two key NPD strategies—exploration and exploitation—in an NPD alliance context. The research sheds light on conflicting views about formalization's NPD performance-enhancing and inhibiting aspects, and offers implications for industry best practices.

Methodology/approach: Empirical examination of survey data from 151 NPD alliances via hierarchical regression and tests of group moderation.

Findings: Results shed light on when and why formalization moderates the influence of key fundamental alliance success mechanisms on NPD alliance performance based on strategic context.     

Effects of Organizational Learning and Information-Processing Behaviors on New Product Success

Individual learning constructs were formulated in an organizational learning context and empirically tested for relationships with new product success. Two constructs, information recording-retrieving and information reviewing, were found to be positively related to new product success. The relevance of these constructs to organizational learning theory are discussed, along with the implication that managers should carefully record and review past information to improve future new product success rates.     

关系范式下新产品开发模式的变革

市场的成熟和技术的进步推动着营销从交易范式转变为关系范式。在关系范式下新产品开发在企业经营中的地位有了很大的提升,新产品开发模式本身也发生了根本性的变化。本文以关系营销的核心特征为理论依据,通过对交易范式和关系范式下新产品开发模式的比较研究,凸现关系范式下新产品开发模式的特点———“3I”,旨在为中国企业转变新产品开发模式,提升企业竞争力提供有益参考。     

A Neural Network for Predicting Manufacturers' Perceived Cooperation with Distributors in the New Product Development Process

ABSTRACT

This research has two objectives. The first is to develop a conceptual neural network for studying manufacturer-distributor cooperation in the new product development (NPD) process and to compare the neural network directly with the traditional multiple regression. The second objective is to examine the relative importance of the antecedents of manufacturer-distributor cooperation. Data from 295 U.S. manufacturing firms are used to test the neural models. The study demonstrates that neural network analysis is a good method predicting manufacturer-distributor cooperation in the NPD process. The results also show that the ranking of antecedents of manufacturer-distributor cooperation from most to least important is: relative dependence, shared values, communication, commitment, and trust. Implications for NPD managers are offered at the end of the paper.     

企业资本结构与产品市场竞争——一种新的理论视角

直到 2 0世纪 80年代 ,企业资本结构对产品市场竞争的影响才引起经济学家的广泛关注。对于这一问题的研究 ,存在着两种截然不同的理论结论 :一种观点认为企业债务水平的提高会使其在产品市场竞争中更为强硬 ,增强其竞争力 ;另一种观点则恰好相反。借鉴前人理论成果的基础上 ,尝试着提出了一种较为一般的分析框架 ,并将不同的理论成果作为这一分析框架的不同侧面。     

The Effect of Probabilistic Selling on the Optimal Product Mix

Determination of the merchandize assortment is an important decision for retailers since the composition and depth of the product mix greatly impact both unit sales and costs. This paper considers how Probabilistic Selling (PS), an emerging marketing strategy, impacts the type and number of products a retailer should carry. We find that adopting PS can alter the optimal number of products (i.e., encourage the retailer to offer more or fewer products), depending on demand- and supply-side factors. Furthermore, introducing probabilistic goods sometimes increases the optimal degree of product differentiation and sometimes reduces it. Specifically, less differentiated products are warranted if there are either few or many consumers with extreme tastes, but more differentiation is needed otherwise. Our analysis reveals that PS can serve either as a substitute to new product introduction (because it enables a retailer to serve a diverse market at a lower cost) or as a complement to new product introduction (since, under PS, a new product enables a retailer to offer additional probabilistic goods that utilize this new product as one of its components). In sum, our results indicate that a retailer must adjust its merchandize assortment appropriately in order to fully benefit from probabilistic selling.     

The dramatic breakdown of the market orientation concept in the pharmaceutical industry: lessons from Vioxx

In this article we present an in-depth case study to better understand the underlying market orientation concept in relation to bringing new technologies to the marketplace. We use the case history of the anti-arthritis drug Vioxx, developed and marketed by the company Merck & Co. Inc that allegedly killed thousands of customers. The case shows how market orientation can take shape and how the key components may form an explosive cocktail prone to problematic behaviour rather than a synergistic set of orientations that creates value for customers. From the data covering 20 years, it is clear that a consumer orientation and competitor orientation, for example, are difficult to internalise and balance by employees. A competitive orientation seems to lead to tunnel vision regarding profit and market share outcomes. Implications for the fundamental market orientation concept, innovation management, together with management challenges are discussed.