Armand Smits

Exploratory and Exploitative Market Learning in Discontinuous New Product Development

This research presents the results of an inductive comparative case study of how exploratory and exploitative market learning is balanced during the development of eight discontinuous new product development projects in six different business units of different multinationals in the chemical industry. For these projects, all recently introduced into the market, we find market knowledge to be a multi-dimensional construct consisting of segment, product, application, and customer knowledge. We illustrate how a project’s exploratory and exploitative market learning is balanced across market knowledge dimensions and over time. More specifically, we find three generic market learning patterns that can be distinguished based on their trade-off between exploratory and exploitative market learning. Our data also allow us to identify several organizational arrangements, such as the organizational position of the projects’ core marketing function and senior management’s decision roles, which seem important in shaping different market learning patterns. Overall this research contributes to the emerging literature on exploratory market learning in new product development.