Peter N. Golder

What Is Quality? An Integrative Framework of Processes and States

Quality is a central element in business strategy and academic research. Despite important research on quality, an opportunity for an integrative framework remains. The authors present an integrative framework of quality that captures how firms and customers produce quality (the quality production process), how firms deliver and customers experience quality (the quality experience process), and how customers evaluate quality (the quality evaluation process). The framework extends the literature in several ways. First, the authors describe important linkages between the three processes, including links reflecting the role of co-production. Second, they point to overlooked aspects of the quality processes that influence how quality is conceptualized and should be managed. These include customer heterogeneity in measurement knowledge and motivation; the role of emotion in quality production, experience, and evaluation; and a new typology of attributes. Third, they propose a quality state residing within each quality process and describe what gives rise to these states, which will enhance decision makers’ ability to measure and manage quality processes. Finally, they offer theoretical and managerial implications derived from their integrative quality framework including 20 strategies to increase customer satisfaction.

Whose Culture Matters? Near-Market Knowledge and Its Impact on Foreign Market Entry Timing

Market entry decisions are some of a firms most important strategic choices. Although some recent studies have begun to consider the impact of learning and experience on foreign market entry, no study has examined the impact of a firms own operations in similar markets on subsequent entry decisions. In this study, the authors introduce the concept of near-market knowledge to reflect the knowledge firms generate by operating in markets that are culturally and economically similar. The authors compile extensive data on the complete foreign market entries of 19 multinational firms. They use a hazard model on 722 entry observations to evaluate the impact of the dynamic near-market knowledge measures and other economic and cultural variables on foreign market entry timing. In contrast with much previous research, the authors find that cultural distance from the domestic market is not a significant factor. However, the authors find significant effects for the new measures of near-market cultural and economic knowledge and for several other economic variables as well. The authors discuss the implications of these findings for further research and management practice.

Historical Method in Marketing Research with New Evidence on Long-Term Market Share Stability

Several researchers have advocated historical or longitudinal approaches to study marketing phenomena. Although some have applied this approach, more often it has been overlooked or denigrated. The author argues that historical method is capable of producing scientific knowledge that is currently useful, rather than simply a remembrance of the past. The author presents a complete description of the historical method, so researchers can use this article as a guide when applying this method. The value of the method is illustrated by examining the prevailing finding in the marketing literature that market shares are stable over time. Although this finding is considered an empirical generalization, an analysis of more than 650 brands in 100 categories raises doubts about the longevity of market share stability.

Deconstructing the Pioneer's Advantage: Examining Vintage Effects and Consumer Valuations of Quality and Variety

Several studies have demonstrated an order-of-entry effect on market share, suggesting that pioneers outperform later entrants. However, other research has pointed out the limitations of these studies and found evidence that many pioneers fail or have low market share. Given this background, the purpose of this research is to understand the conditions under which pioneers are more likely and also less likely to have an advantage. We propose a game-theoretic model that includes important sources of pioneer advantages as well as disadvantages. Specifically, we incorporate a pioneer advantage due to preemption in markets with heterogeneous tastes. In addition, we incorporate a potential pioneer disadvantage due to technology vintage effects, where later entrants utilizing improved technology can have lower costs and higher quality. The model allows us to evaluate the extent of vintage effects necessary to overcome a pioneers advantage. Key relationships are found between the magnitude of the pioneer advantage or disadvantage and consumer valuations of product attributes (e.g., variety and quality). We empirically validate the model with vintage effect data in 36 product categories, and measures of consumer valuations of product variety and quality for 12 of these 36 categories. The results show that pioneers do better in product categories wherevariety is more important and worse in categories where productquality is more important. Pioneers in categories with high vintage effects are shown to have lower market shares and higher failure rates. Similar results appear when analyzing persistence of market leadership over time, further validating our models major implications. We also present two case studies that illustrate key elements of the model.

Beyond Diffusion: An Affordability Model of the Growth of New Consumer Durables

A firms ability to compete in new product markets is vital to its profitability and long-term survival. Therefore, it is important to understand the development and growth of these markets. Following a pioneering study by Bass (1969), diffusion models have traditionally provided this understanding in marketing. The great appeal of the Bass model is that it is a simple one that fits the data very well and provides parameters that have an intuitive behavioural interpretation. The model suffers from three well-known limitations: (1) it does not include marketing variables that could infuence new product diffusion and sales; (2) the models parameters are unstable; and (3) the models forecasts are inaccurate before the sales peak and especially prior to the point of inflection. Subsequent research has made progress especially in extending the Bass model to include marketing variables. However, the extensions have come at the cost of simplicity: the new models are far more complex than the simple Bass model. We propose an alternate simple model of new product growth for consumer durables, based on the concept of affordability rather than on diffusion. We compare this model with the diffusion model in terms of fit, stability and validity of parameters, and forecasting ability. The alternate model is a little inferior to the diffusion model in fit, but superior in terms of the stability and validity of parameters and forecasting ability. We discuss the limitations and implications of our model.

Findings---Innovations' Origins: When, By Whom, and How Are Radical Innovations Developed?

Innovation research tends to consider only the post-commercialization period or examine a few innovations through case studies. In this study, we examine 29 radical innovations from initial concept to mass-market commercialization. We find that these innovations were developed over an average of at least 50 years and divide this long development period into four distinct stages---conceptualization, gestation, early incubation, and late incubation. We find that the duration of a stage is longer when different firms lead product development at the beginning and end of the stage. These changes in product development leaders happen frequently, e.g., 76% of firms that were first to commercialize an innovation failed to launch it in the broader market. We also find that the time-to-takeoff for a product category is significantly related to the duration of the preceding late incubation stage. In addition, we find four different ways in which radical innovations borrow from prior seemingly unrelated innovations. We report many other findings on when (duration times), by whom (product development leaders), and how (technology borrowing) radical innovations are developed.

Findings---Using Stock Prices to Predict Market Events: Evidence on Sales Takeoff and Long-Term Firm Survival

We evaluate whether stock prices can predict the sales takeoff and the long-term survival of firms at takeoff. We find that abnormal returns are strongly positive in the year prior to takeoff, thus suggesting an important signal of the takeoff. Moreover, we find that negative abnormal returns in the year of takeoff and one year after takeoff increase the hazard of market exit by 9.5 times relative to firms without these negative abnormal returns. We discuss the implications of these findings for managers and researchers.

Innovation and New Products Research: A State-of-the-Art Review, Models for Managerial Decision Making, and Future Research Directions

This chapter has a three-fold purpose. First, we provide a literature review of major papers in the field of new products research. We organize our review into four tables, one for each of the four stages of the new product development process, and then by topic within each stage. We provide a short summary of each paper in the tables. Second, we highlight specific models within each stage of the new product development process. These models are useful for marketing researchers and managers tackling challenges in the new products domain. Third, after reviewing the literature, we suggest numerous general research directions as well as specific research questions to guide future investigations in this area.

New product development research: consolidating the present and guiding the future

New products are the lifeblood of organizations. Successful new products create new organizations, grow existing organizations, raise living standards, and generate wealth. Without new products, entrepreneurial ventures will never come to life and established firms will soon perish. Given the critical importance of new product development, marketing researchers have devoted considerable attention to investigating this topic. In this handbook, we bring together the world’s thought leaders on new product development with two overarching goals in mind. First, we seek to compile existing knowledge on new products research in a single source. We hope this will aid researchers and business practitioners in their efforts to become familiar with state-of-the-art knowledge in this area. The second overarching objective is to expand the boundaries of our knowledge. The authors of the handbook’s chapters identify numerous previously unaddressed research questions that provide opportunities to advance our understanding of new product development. Moreover, in this opening chapter, we outline broad areas of new product development research that are underrepresented in marketing. Each of these areas could benefit immensely from the insights a marketing perspective offers. Furthermore, in an effort to spur additional research, we developed a conceptual framework of the antecedents of new product performance. New product performance is the key outcome of the new product development process and can be measured by firm profits, market share, stock market return, survival rate, and other metrics. In this framework, we propose that new product performance is determined by markets, customers, organizations, and the environmental context within which these entities exist. We map the handbook chapters into this framework so that readers can understand where current research exists to inform these relationships. Moreover, this framework illustrates many additional opportunities for enhancing current knowledge on the antecedents of new product performance. Before describing these opportunities for new research, we begin our chapter with an overview of the handbook chapters. We organize these chapters into handbook parts according to the five common stages of the new product development process: