Why some new products are
more successful than others?
Henard, D., Szymanski, D. (2001)
Yali Chai
Siru Liesola
Ella Leppänen
Susanna Mikkola
Johanna Rauhala
Assignment
• Present different typologies for
predictors of new product
performance
• Create your own typology
• How is your typology better than
those taken from literature?
Typology presented in
the article
Two alternative
typologies
Our new typology
1/15
Typology presented in the article
Different
categories
All
predictors
Dominant
predictors
Firm
Strategy
Product
Product:
Price
Innovativeness
Marketing
synergy
Technological
synergy
Advantage
Meets customer needs
Technological
sophistication
Order of entry
Dedicated HR
Dedicated R&D
+ Good categories
+ Comprehensive research
of successful products
-
Meta-analysis of new product performance
Literature collection of 41 studies with 798 correlations
Firm
Processes
Market
place
Structured approach
Reduced cycle time
Market orientation
Customer input
Cross-functional integration
Senior management support
Predevelopment proficiency
Marketing task proficiency
Technological proficiency
Launch proficiency
Likelihood of
competitive
response
Competitive
response
intensity
Market potential
Lack of top management’s contribution
Lack of implications of failed products
Lack of organizational insights
Difficult to get exact results based on
meta-analysis
The predictor performance
relationships can vary by:
measurement factors
•
the use of multi-item scales
vs. single-item scales
•
subjective vs. objective
measures of performance
•
senior vs. project
management reporting
•
short-term vs. long-term
contextual factors
•
services vs. goods
•
Asian vs. North American
markets
•
competition in high-tech vs.
low-tech market
2/15
Alternative typology: Evanschitzky, Eisend, Calantone & Jiang (2012)
Different
categories
All
predictors
Dominant
predictors
Product
Characteristics
Strategy
Characteristics
Product price
Innovativeness
Marketing synergy
Technological
synergy
Advantage
Meets customer
needs
Technological
sophistication
Order of entry
Dedicated HR
Dedicated R&D
Process
Characteristics
Marketplace
Characteristics
Structured approach
Reduced cycle time
Market orientation
Customer input
Cross-functional integration
Senior management support
Predevelopment proficiency
Marketing task proficiency
Technological proficiency
Launch proficiency
Likelihood of
competitive response
Competitive
response intensity
Market potential
Organizational
Characteristics
Climate
Size
Design
External relations
Degree of
centralization
Degree of
formalization
3/15
Alternative typology: Evanschitzky, Eisend, Calantone & Jiang (2012)
Different
categories
All
predictors
Dominant
predictors
Product
Characteristics
Strategy
Characteristics
Product price
Innovativeness
Marketing synergy
Technological
synergy
Advantage
Meets customer
needs
Technological
sophistication
Order of entry
Dedicated HR
Dedicated R&D
Process
Characteristics
Marketplace
Characteristics
Structured approach
Reduced cycle time
Market orientation
Customer input
Cross-functional integration
Senior management support
Predevelopment proficiency
Marketing task proficiency
Technological proficiency
Launch proficiency
Likelihood of
competitive response
Competitive
response intensity
Market potential
Organizational
Characteristics
Climate
Size
Design
External relations
Degree of
centralization
Degree of
formalization
4/15
Alternative typology: Evanschitzky, Eisend, Calantone & Jiang (2012)
Different
categories
All
predictors
Dominant
predictors
•
•
Product
Characteristics
Strategy
Characteristics
Product price
Innovativeness
Marketing synergy
Technological
synergy
Advantage
Meets customer
needs
Technological
sophistication
Order of entry
Dedicated HR
Dedicated R&D
Working culture has a strong impact on the
correlation between predictors and success
Organizational characteristics have stronger effect on
•
services than products (Climate)
•
Western countries than Asia (Climate)
•
high-tech than low-tech industry (Design)
Process
Characteristics
Marketplace
Characteristics
Structured approach
Reduced cycle time
Market orientation
Customer input
Cross-functional integration
Senior management support
Predevelopment proficiency
Marketing task proficiency
Technological proficiency
Launch proficiency
Likelihood of
competitive response
Competitive
response intensity
-
-
Market potential
Organizational
Characteristics
Climate
Size
Design
External relations
Degree of
centralization
Degree of
formalization
lack of explanation for each predictors
• What are the criterion for proficiency?
the research result is inconsistent with other research
works
• meeting customer needs and order of entry have a
little effect on success?
 lack of examples which provide deeper reasoning for
why certain predictors are negligible
5/15
Alternative typology: Montoya-Weiss & Calantone (1994)
Different
categories
All
predictors
Dominant
predictors
Strategic Factors
Company resources
Product Advantage
Strategy
Marketing synergy
Technological
synergy
Market
Environment
Factors
Market potential
Market
competitiveness
Environment
Development
Process Factors
Organizational
Factors
Speed to market
Costs
Financial/business analysis
Internal/external
communication
Organizational factors
Proficiency of predevelopment
activities
Proficiency of market-related
activities
Proficiency of technological
activities
Top management support,
control and skills
Protocol
Three forms of analysis: Fisher Combined test, Correlation Effect Size test and Summary Counts
6/15
Alternative typology: Montoya-Weiss & Calantone (1994)
Different
categories
Strategic
Factors
Company resources
All
predictors
Dominant
predictors
Market
Environment
Factors
Market potential
Market
competitiveness
Environment
Product Advantage
Strategy
Marketing synergy
Technological
synergy
Development
Process Factors
Speed to market
Costs
Financial/business analysis
Proficiency of
predevelopment activities
Proficiency of marketrelated activities
Proficiency of
technological activities
Top management support,
control and skills
Protocol
Organizational
Factors
Internal/external
communication
Organizational factors
Product
Characteristics
Product price
Innovativeness
Meets customer
needs
Technological
sophistication
• Added Organizational Factors
• Lacks Product Characteristics
7/15
Alternative typology: Montoya-Weiss & Calantone (1994)
Different
categories
All
predictors
Dominant
predictors
•
Strategic
Factors
Company resources
Market
Environment
Factors
Development
Process Factors
Speed to market
Costs
Financial/business analysis
Market potential
Market
competitiveness
Environment
Proficiency of
predevelopment activities
Proficiency of marketrelated activities
Proficiency of
technological activities
Top management support,
control and skills
Protocol
Product Advantage
Strategy
Marketing synergy
Technological
synergy
strategy and development process factors are the
most important determinants → successful firms
develop a superior product that is attuned to
customer wants and needs and they have strong
marketing and technical knowledge to launch the
product
-
-
-
Organizational
Factors
Internal/external
communication
Organizational
factors
lacks the consideration of intangible assets, such as
brand value and customer loyalty on product
performance
lacks focus on the intellectual capital of the firm or the
dedication and motivation of the workforce (employee
engagement)
conclusions drawn from a meta-analysis are limited and
thus subject to publication bias → need for further
research
8/15
Our suggestions
Extending the Henard & Szymanski typology
➔ Brand
◆
◆
◆
Brand image has a huge impact on attractiveness of both products and services. In case the consumer feels that a
company acts responsibly, products manufactured by this company are thus more desirable than its rivals.
Specification with homogenous products can be challenging; the companies need to consider different ways to set
themselves apart in order to add value to customers.
On the other hand brand loyalty diminishes in the future. Generation Z demands more from products: f.ex. technical
qualities need to meet their acquirements.
➔ Complementary assets
◆
◆
Specialized assets increase protection and secure long-term profit, especially when the dominant design has emerged.
The company does not need to own the complementary assets internally, digital and global economy allows the
companies to reach them with less resources which helps smaller companies to also emerge and profit (startups eg.
Spotify, Uber).
➔ Order of entry under varying economic situations
◆
◆
First-movers in the market usually have advantage over others. When developing new products these advantages need
to be capitalized.
Economic conditions change over time in line with the economic and business cycle (expansions and contractions).
Timing the marketplace entry with a product/service is therefore crucial from this point of view.
9/15
Extending the Henard & Szymanski typology
➔ Optimized marketing task proficiency
◆
◆
Proficiency with which a firm conducts its marketing activities, combined with
reaching and educating the target audiences with market offerings with optimized content (inbound marketing)
➔ Market regulation
◆
◆
Controlled markets where governments controls the forces of supply and demand
A competitive product market environment “allows new firms to challenge incumbents, efficient firms to grow, and
inefficient ones to exit, can help boost economic growth and living standards”. (OECD)
➔ Firm’s proficiency in certain market (already in the market vs. new entrants)
◆
◆
Complementary assets (if already in the market)
Tacit knowledge of the market phenomena
10/15
Our approach
Product
Characteristics
➢
Brand
➢
Advantage
➢
Meets
customer
needs
➢
Technological
sophistication
Firm Strategy
Characteristics
Firm Processes
Characteristics
➢
Complementary
assets
➢
Predevelopment
proficiency
➢
Order of entry and
economic
situation
➢
Optimized
marketing task
proficiency
➢
Dedicated HR
➢
➢
Technological
proficiency
Dedicated R&D
➢
Marketplace
Characteristics
➢
Market regulation
➢
Firm’s proficiency
in certain market
(already in the
market vs. new
entrants)
➢
Market potential
Launch
proficiency
11/15
Organization to the Henard & Szymanski typology
➔ Internal / External Communication
◆
◆
◆
◆
◆
Internal communication occurs frequently in performing organizational activities; exchanges information of various
departments and divisions of the organization.
Two types: vertical and horizontal
External communications’ coverage is much broad with external bodies; the exchange of information is done mainly for
maintenance.
No such classification. *
Goal of external communication is ultimately to promote the company and increase revenues. External communications
play therefore an important role of overall marketing plan of the company.
➔ Organizational factors
◆
◆
◆
Culture
Climate
Design
12/15
Our approach +
Product
Characteristics
➢
Brand
➢
Advantage
➢
Meets
customer
needs
➢
Technological
sophistication
Firm Strategy
Characteristics
Firm Processes
Characteristics
➢
Complementary
assets
➢
Predevelopment
proficiency
➢
Order of entry and
economic
situation
➢
Optimized
marketing task
proficiency
➢
Dedicated HR
➢
➢
Technological
proficiency
Dedicated R&D
➢
Launch
proficiency
Marketplace
Characteristics
➢
Market
regulation
➢
Firm’s
proficiency in
certain market
(already in the
market vs. new
entrants)
➢
Organization
Characteristics
➢
Internal /
External
Communication
➢
Organizational
factors
Market
potential
13/15
Additions to our approach
Capabilities
‘Capabilities,’ which entail more actionable and specific skills, competencies, and routines that firms develop and adjust in
line with the dynamics of the situation in the shorter term. In this view of what leads to success, resources are seen as
having an indirect impact on performance, in that they are empowered by relevant capabilities.
According to the article written by (Teece et al., 1997), dynamic capabilities are seen as firm's ability to "integrate, build and
reconfigure both internal and external competences to address rapidly changing environments”. The ability to react
adequately, and in a sufficient and timely manner to external challenges is typically a blend of multiple capabilities
overlapping with each other.
Resources
‘Resources,’ which are the longer-term, background factors—that is, the more tacit, ‘softer,’ and difficult-to-imitate—factors
that must be part of the internal environment of the firm if it is to achieve a sustainable competitive advantage.
Assumptions:
➔ Firms are heterogeneous with respect to their resources/capabilities/endowments
➔ Resource endowments are ‘sticky’, at least at short-term
➔ Invites consideration of managerial strategies for developing new capabilities (skill acquisition, the management of
knowledge and know-how and learning)
14/15
Conclusion
•
•
•
•
Doesn’t take nonsignificant
predictors into account
→ only dominant predictors
Analyzes also organizational factors
More suitable nowadays because of
the new predictors
More balanced regarding the
categories
15/15
Thank you. Questions?
References
Evanschitzky, H., Eisend, M., Calantone, R. and Jiang, Y. (2012). Success Factors of Product Innovation: An Updated Meta-Analysis.
Journal of Product Innovation Management, 29, pp.21-37.
Henard, D. and Szymanski, D. (2001). Why Some New Products Are More Successful Than Others. Journal of Marketing Research,
38(3), pp.362-375.
Montoya- Weiss, M. & Calantone, R. (1994). Determinants of New Product Performance: A review and Meta-Analysis, Journal of Product
Innovation Management, vol. 11, pp. 397-417.
OECD.org, Indicators of Product Market Regulation Homepage, [Online], Available:
http://www.oecd.org/eco/growth/indicatorsofproductmarketregulationhomepage.htm [25 Jan 2016]
Teece et al. (1997), Dynamic Capabilities and Strategic Management, Strategic Management Journal, vol. 18, no. 7, August, pp. 509533.