Erik Jan Hultink

Industrial New Product Launch Strategies and Product Development Performance

Abstract Just as reporters must answer a few fundamental questions in every story they write, decision-makers in the new product development (NPD) process must address five key issues; what to launch, where to launch, when to launch, why to launch, and how to launch. These decisions involve significant commitments of time, money, and resources. They also go a long way toward determining the success or failure of any new product. Deeper insight into the tradeoffs these decisions involve may help to increase the likelihood of success for product launch efforts. Erik Jan Hultink, Abbie Griffin, Susan Hart, and Henry Robben present the results of a study that examines the interplay between these product launch decisions and NPD performance. Noting that previous launch studies focus primarily on the tactical decisions (that is, how to launch) rather than on the strategic decisions (what, where, when and why to launch), they explore not only which decisions are important to success, but also the associations between the two sets of decisions. Because the strategic launch decisions made early in the NPD process affect the tactical decisions made later in the process, their study emphasizes the importance of launch consistency—that is, the alignment of the strategic and tactical decisions made throughout the process. The survey respondents—managers from marketing, product development, or general management in U.K. firms—provided information about 221 industrial new products launched during the previous five years. The responses identify associations between various sets of strategic and tactical decisions. That is, the responses suggest that the strategic decisions managers make regarding product innovativeness, market targeting, the number of competitors, and whether the product is marketing- or technology-driven are associated with subsequent tactical decisions regarding branding, distribution expenditure and intensity, and pricing. The study also suggests that different sets of launch decisions have differing effects on performance of industrial new products. In this study, the greatest success was enjoyed by a small group of respondents categorized as Niche Innovators. Their launch strategy involves a niche focus, targeting innovative products into markets with few competitors. Tactical decisions made by this group include exclusive distribution, a skimming pricing strategy, and a broad product assortment.

Launch decisions and new product success: an empirical comparison of consumer and industrial products

Many articles have investigated new product development success and failure. However, most of them have used the vantage point of characteristics of the product and development process in this research. In this article we extend this extensive stream of research, looking at factors affecting success; however, we look at the product in the context of the launch support program. We empirically answer the question of whether successful launch decisions differ for consumer and industrial products and identify how they differ. From data collected on over 1,000 product introductions, we first contrast consumer product launches with industrial product launches to identify key differences and similarities in launch decisions between market types. For consumer products, strategic launch decisions appear more defensive in nature, as they focus on defending current market positions. Industrial product strategic launch decisions seem more offensive, using technology and innovation to push the firm to operate outside their current realm of operations and move into new markets. The tactical marketing mix launch decisions (product, place, promotion and price) also differ markedly across the products launched for the two market types. Successful products were contrasted with failed products to identify those launch decisions that discriminate between both outcomes. Here the differences are more of degree rather than principle. Some launch decisions were associated with success for consumer and industrial products alike. Launch successes are more likely to be broader assortments of more innovative product improvements that are advertised with print advertising, independent of market. Other launch decisions uniquely related to success per product type, especially at the marketing mix level (pricing, distribution, and promotion in particular). The launch decisions most frequently made by firms are not well aligned with factors associated with higher success. Additionally, comparing the decisions associated with success to the recommendations for launches from the normative literature suggests that a number of conventional heuristics about how to launch products of each type will actually lead to failure rather than success.

The impact of new product development acceleration approaches on speed and profitability: lessons for pioneers and fast followers

This work investigates the impact of nine new product development (NPD) acceleration approaches (supplier involvement, lead user involvement, speeding up activities and tasks, reduction of parts and components, training and rewarding of employees, implementation of support systems and techniques, stimulating interfunctional cooperation, emphasis on the customer, and simplification of organizational structure) on development speed and new product profitability. Our findings from 233 manufacturing firms show that lead user involvement and training/rewarding of employees increase both development speed and profitability. Supplier involvement, speeding up activities and tasks, and a simplification of the organizational structure also enhance development speed, while an emphasis on the customer has an additional positive impact on new product profitability. Both new product speed and profitability increase firm financial performance. Our results further show that pioneers and fast followers should not select the same NPD acceleration approaches as the speed and profitability impact of the majority of the acceleration approaches depends on the new product strategy of the firm. These results are important as they provide guidance for pioneers and fast followers regarding which NPD acceleration approaches to select in order to enhance speed and profitability and, hence, firm financial performance.

The mediating role of new product development in the link between market orientation and organizational performance

The proficiency in new product development activities may be the key to the conversion of a market‐oriented culture into superior organizational performance through better new product performance. To examine this conjecture our study tests hypotheses on the mediating effects of the proficiency in new product development activities and new product performance on the relationship between market orientation and organizational performance. The results from a sample of 126 manufacturing firms present evidence for the mediating roles of the proficiency in commercialization activities and new product performance. These mediating roles are consistent for three moderator variables: technological turbulence, market turbulence and innovation strategy. Together our findings provide a better understanding of how a market‐oriented culture leads to superior organizational performance.

The world’s path to the better mousetrap: myth or reality? An empirical investigation into the launch strategies of high and low advantage new products

Focuses on product advantage, a major contributing factor to new product performance, by examining the launch strategies associated with high and low levels of product advantage. Views a launch strategy as integrating protocol decisions, which have steered the course of a product’s development with the tactical marketing mix decisions. Data confirm all associations between key elements of new product protocol and product advantage. Growth‐related objectives guide the development of new products with high advantage, while the speedy development and early timing of the projects, the focus on growth markets, and the use of a niche targeting strategy are the hallmarks of products with high advantage. Contends that companies offering the world a better mousetrap do not believe the myth that a path to its door will be beaten; the better mousetrap requires and receives a different launch treatment from more pedestrian competitors.

New consumer product launch: strategies and performance

The launch strategies of new consumer goods have not been subject to rigorous study, although anecdotes abound in the form of news items in newspapers and specific industry journals. This contrasts...

How to launch a high-tech product successfully: An analysis of marketing managers' strategy choices

Abstract The launch strategy for a new product is a crucial decision issue for marketing managers. Little agreement exists however about the content of a launch strategy and about the individual and combined effects of its constituent parts on new-product success. In this study, the relative importance of some launch strategy tactics (pricing, promotion, product assortment and competitive advantage) on the expected success of the new product is investigated by using a one-third fractional conjoint-analysis design. All respondents (N = 28) were product and marketing managers in the Dutch consumer electronics industry. The results of the study showed that two clusters of managers can be identified with distinct preferred launch strategies. The first cluster of managers preferred a penetration pricing strategy, a small product assortment and a customer oriented promotional campaign. The second cluster of managers preferred a skimming strategy while keeping the product assortment small. We discuss criteria for assigning managers to one of the two clusters and discuss implications of the study for further research.

Product Design in a Circular Economy: Development of a Typology of Key Concepts and Terms

Summary In a circular economy (CE), the economic and environmental value of materials is preserved for as long as possible by keeping them in the economic system, either by lengthening the life of the products formed from them or by looping them back in the system to be reused. The notion of waste no longer exists in a CE, because products and materials are, in principle, reused and cycled indefinitely. Taking this description as a starting point, the article asks which guiding principles, design strategies, and methods are required for circular product design and to what extent these differ from the principles, strategies, and methods of eco-design. The article argues that there is a fundamental distinction to be made between eco-design and circular product design and proceeds to develop, based on an extensive literature review, a set of new concepts and definitions, starting from a redefinition of product lifetime and introducing new terms such as presource and recovery horizon. The article then takes Walter Stahels Inertia Principle as the guiding principle in circular product design and develops a typology of approaches for Design for Product Integrity, with a focus on tangible durable consumer products. The newly developed typology contributes to a deeper understanding of the CE as a concept and informs the discussion on the role of product design in a CE.

Choice of consumer research methods in the front end of new product development

This study investigates the choice of consumer research methods in the fuzzy front end (FFE) of the new product development (NPD) process. First, it delivers an up-to-date overview of currently available consumer research methods for use in the FFE of NPD. Second, using an online questionnaire, we obtain insights into the use of these consumer research methods by B-to-C companies based in the Netherlands (N = 88, including many major multinational companies). Third, these companies provided the major reasons for choosing these methods, and specified the types of consumer information that they aim to gather using these methods. Finally, we investigate the influence of company size, type of products developed (durable/non-durable) and product newness on the use of these methods. Based on these findings, we build a contingency framework that helps companies to improve their choice of consumer research methods in the FFE, where consumer insights are most important for new product success.

Market Information Processing in New Product Development: The Importance of Process Interdependency and Data Quality

While there is a growing interest in the role of market information processing activities (i.e., the acquisition, dissemination, and use of market information) in new product development (NPD), a number of gaps remain in our knowledge on this topic. When investigating the performance impact of market information processing, most studies have treated the three activities as independent. Our research adds to the extant knowledge by exploring not only both direct relationships between each of the market information processing activities and new product performance, but also interaction effects. We, thus, ask the question of whether there may be synergies in obtaining performance increases by jointly improving two processing activities, rather than just considering each activity independently. In addition, we investigate these effects for different levels of information quality; a topic largely neglected in the market information processing literature. Our analysis is based on empirical data from 152 Dutch NPD projects. The results indicate that market information acquisition and use are both directly associated with increased performance. We also find significant interaction effects for information acquisition and dissemination, and for information dissemination and use. Finally, the importance of information quality is emphasized, with lower quality information producing lower performance and wiping out the effects between various aspects of market information processing and new product performance. We provide several implications of our findings for managers and academics.