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Perspective: New Product Failure Rates: Influence of Argumentum ad Populum and Self-Interest
Abstract
A persistent myth in product innovation and management is that the failure rate of new products is 80% or higher. How does this false idea continue to displace the conclusions of empirical studies since 1977 that the new product failure rate is 40% or less? We examine the influence of a fallacy that encourages people's unthinking acceptance of ideas on new product failure rates and whose appeal rests primarily on an emotional, rather than a reasoned, argument. Self-interest also plays a major role in keeping this myth alive.
... However, the ability to develop impactful breakthrough services and products has far-reaching implications [2] and it is not a straightforward process [3]. This is due to the growing complexity and rapidly changing market environment [4] which consequently leads to a demanding and hampered concept associated with innovation success, such as technical uniqueness, competitive advantage, diversity of market offering, protection of a market position, and profitability [5]. As a consequence, there is around 40% rate (in contrast to the popular invalidated belief of being around 80%) in innovative product failure, as the percentage of new products introduced to the market that then fail to meet the commercial objectives of the business unit that launched the product [5]. ...
... This is due to the growing complexity and rapidly changing market environment [4] which consequently leads to a demanding and hampered concept associated with innovation success, such as technical uniqueness, competitive advantage, diversity of market offering, protection of a market position, and profitability [5]. As a consequence, there is around 40% rate (in contrast to the popular invalidated belief of being around 80%) in innovative product failure, as the percentage of new products introduced to the market that then fail to meet the commercial objectives of the business unit that launched the product [5]. The rates of idea failure are impractical to quantify due to the unavailable concrete factual data, however, they are expected to be significantly higher than the product failure rate. ...
... Not defined yet 1 translated into different forms of financial support such as money, coaching, mentoring, consulting services and infrastructure 2 Virtual reality 3 also known as frontotemporal dementia 4 health-related quality of life 5 In vitro diagnostic From Besides the data on the LLs' participant projects, information regarding the participant teams was also taken into consideration. There were a total of 83 innovators (considering all the members in each participating provider team) that participated in the total six LLs'. ...
Living Labs, experiencing a global surge in popularity over the past years, demands standardized guidance through the development of widely accepted good practices. While challenging due to the complex and evolving nature of Living Labs, this task remains essential. These knowledge innovation ecosystems facilitate a diverse array of interconnected and interacting end-users and stakeholder partners who engage collaboratively to co-create, embed, and/or leverage end-user-centric breakthroughs at one or more innovation phases within a real-world context. Based on the development of six Living Labs in the health domain, this study proposes a more general yet critical set of Living Labs' good practices, emphasizing the importance of strong initial marketing and promotion strategies for Living Labs' open calls, enforcing gender equality, carefully selecting stakeholders, devising and implementing effective framework strategies for end-user engagement and value creation, ensuring value creation for all Living Labs partners, prolonging the long-term viability of the Living Lab project, promoting and disseminating impactful actions and results, fostering environmental sustainability, and processing results data for Living Lab performance evaluation.
... New products are the greatest source of competitive advantage for a manufacturing company (Geleilate et al., 2021); however, not all new products are successful in the market (Evanschitzky et al., 2012). Research on the success of new products is essential (Ledwith & O'Dwyer, 2009) because the failure rate, around 40% according to empirical studies (Castellion & Markham, 2013), prevents companies from improving their market share and value (Rubera & Kirca, 2012). ...
... The study of the success factors of the NPDP is crucial for firms, as the new product failure rate stands at around 25-40%. (Castellion & Markham, 2013;Evanschitzky et al., 2012). Empirical evidence highlights that a structured NPDP is a critical determinant of new product success (Cooper, 2019;Salerno et al., 2015). ...
Since not all new products are introduced to the market successfully, the quality of the new product development process and its technical or market focus are of special importance. Many studies based on large companies in developed economies show that market orientation is a key factor for success. Despite this, little attention is still paid to this issue in developing economies. The purpose of this study is to analyze to what extent the success of new products depends on the rigor with which new product development processes are carried out and their market orientation. Using a dendrogram with the Ward’s linkage method on a sample of 140 manufacturing companies from Peru, three clusters of companies were identified. The clusters that report the greatest success are those characterized by superior quality and a strong technical orientation.
... Apparel companies, work on more new products to satisfy their customers' needs however almost half of them fail [14], [15]. Constant failure is a red flag to its survival hence companies need to understand customers´ willingness to purchase a new product. ...
... threshold as the minimum value for these indices. However, it could not be considered the best model since the CMIN df (14) exceeded the ideal range (0 -2). But at least the analysis generated a CMIN value. ...
The internet is flooded with research on the influence of brand equity on consumer buying behavior. This paper offers a reversal of the variables wherein brand equity becomes the dependent variable and consumer buying behaviors (utilitarian and hedonic), along with sex, as the independent variables. Employing path analysis, the study delves into the dominant buying behavior of 300 graduating college male and female university students in Region XI. They are the prospective consumers of apparel products once employed in the immediate future. The study highlights the interconnectedness of utilitarian and hedonic buying behaviors in shaping the brand equity of apparel goods. Sex, on the other hand, is not a significant predictor of consumer buying behavior and brand equity.
... Not all new products will last, not even all award winners (Victory and Tanusondjaja, 2023), but how many typically fail? An 80% rate is widely accepted but cumulative evidence shows new products fail at half the accepted rate (Castellion and Markham, 2013;Crawford, 1979Crawford, , 1987. Past research sampling new product projects continually support a 40% rate when using practitioner evaluation (e.g. ...
... Around a third of LEs fail in the first quarter after launch, 50% fail in the year after launch, and this continues to increase reaching 80% three years after launch. Although the final failure rate in this research is widely believed in industry, it is seldom seen in past research investigating new product projects (see, Castellion and Markham, 2013). An 80% rate does exist for LEs, but it is important to remember it takes three years (12th quarters) after launch to reach this rate. ...
Purpose
New product introductions, particularly line extensions (LEs), are common in consumer goods categories. Despite their commonality, the success of LEs are not guaranteed. The purpose of this study is to provide brands that introduce LEs a benchmark about what success to expect.
Design/methodology/approach
This study investigates the success of 36,994 LEs in each quarter for the first three years after introduction. Four indicators are calculated using consumer panel data to benchmark how long LEs survive (failure rate), how competitive they are in the category (market share) and how they are adopted by category buyers (penetration and repeat buyer rate).
Findings
Most LEs survive after the first year, but many cease to exist or perform well in the long term. Around 50% of LEs fail a year after launch, but this failure rate halves once seasonal LEs are removed. Failure rates start to approach 80% after three years. Most LEs do not perform better than existing products. Around three in four LEs have a market share or penetration near or below the category norm. Although this percentage decreases the longer after launch, most LEs are still below the category norm.
Practical implications
These new product success benchmarks provide guidelines to practitioners about what success the “typical” LE will achieve. This research can help guide new product investment decisions because it provides context on what is feasible to achieve.
Originality/value
Four market success measures are used, a departure from past benchmarking research which uses practitioner evaluation on metrics seldom used in practice. The authors provide guidelines about when and how to measure LE and new product success more broadly.
... However, despite high investment and R&D expenditures, diversifying customer expectations and increasing complexity of product dynamics cause businesses to have a success rate much lower than expected in their innovative processes. Some studies emphasize that this rate is between 40-90% (Castellion & Markham, 2013;Rhaiem & Amara, 2021). This situation requires businesses to review their approaches in the innovation process and include new technologies. ...
... It is widely recognized by both senior managers and academics for its importance in achieving high business performance and increasing market shares (Gunday et al., 2011). However, implementing innovations and incorporating them into the organizational lifecycle present significant challenges, with a failure rate that can reach up to 90% in some instances (Castellion & Markham, 2013;Rhaiem & Amara, 2021). Despite this, a majority of senior managers rank innovation performance as a top priority (McKinsey & Company, 2022). ...
Meeting diverse customer expectations at the right place and time requires a creative and innovative organizational
culture and employee mindset. Businesses can sustain a competitive advantage if they remain innovative. To offer
creative and innovative products and services in this uncertain environment, employees must keep up with
emerging technologies and integrate them into business processes swiftly and effectively. Generative AI
(Generative Artificial Intelligence), a hot topic recently, and the tools it provides are among these new
technological opportunities. Generative AI offers substantial benefits in addressing the challenges businesses face
when creating innovative solutions. In particular, it manages various strategies concurrently to understand the
expectations of both internal and external customers. It presents original ideas and fosters the emergence of more
robust and comprehensive innovative approaches. It provides designs and features that go beyond the norm,
evaluates ideas concurrently, and allows various stakeholders to participate in the innovation process. This offers
opportunities in many areas. Considering all these aspects, the study aims to increase the awareness of businesses
about Generative AI and the opportunities it offers in producing innovative solutions. In accordance with this
purpose, the relationship between Generative AI and innovation has been discussed within the scope of the extant
literature. It is evaluated that the study will increase the awareness of policymakers and senior managers,emphasizing the importance of Generative AI in increasing innovation performance, which offers a significant
strategic advantage. In addition, it expands the literature by addressing the relationship between Generative AI and
innovation in a collective manner and serving as a source for future studies.
Keywords: Generative AI, Innovation, Creativity.
... These challenging situations are far more evident for entrepreneurial firms which tend to operate in resource-constrained environments due to their newness and smallness (Delerue & Lejeune, 2012). Entrepreneurs' perceptions of their firms' smallness mean that in seeking resources they tend to approach existing networks rather than new or larger networks (Akrout, 2014;Castellion & Markham, 2013). Utilizing existing ties reduces entrepreneurs' risks of working with unknown parties and reduces search and time cost (Kollock, 1994;Kuwabara, 2011). ...
... Innovation is nowadays a key aspect to be implemented in organisations, taking a central role in the development of strategies by those who manage them [4]. But innovation is difficult to perform, requiring time, dealing with money limitations, performing consumer demands analysis, and managing creative problem-solving to succeed [5] [6] [7]. ...
... As such, since this century, innovation, as a key factor to achieve sustainable economic growth, has been increasingly concerned by countries (Wen et al., 2021). However, the substantial investment, cycle length, and risk that characterize innovation endeavors can inhibit their prosperity (Castellion & Markham, 2013); at the same time, the favorable externalities of innovation output can distort the price and allocation of innovation factors, and lead to the inability to achieve Pareto optimality in the allocation of innovation factors (Wang et al., 2023). Therefore, it is essential for governments to fully play the positive role of macro-control and effectively promote the vigorous development of innovation activities. ...
This research employs a fixed effect model to empirically estimate panel data from 37 OECD countries spanning 2000 to 2021, revisiting the influence of government R&D expenditure on innovation within the theory of marginal diminishing effect. Results reveal a significant positive effect of government R&D expenditure on national innovation capacity, and this influence remains robust under robustness checks. Then, quantile regression uncovers a nuanced pattern, indicating that as a country’s innovation capacity strengthens, the stimulative effect of government R&D expenditure initially rises and subsequently declines. Additionally, incorporating lags of the independent variable at different periods affirms the time lag effect of government R&D expenditure on national innovation capacity. Deeper scrutiny using two fixed effect models including interaction terms reveals a multifaceted mechanism, where government R&D expenditure fosters innovation by promoting bank credit, yet simultaneously suppresses innovation by hindering non-governmental R&D intensity. Lastly, heterogeneity analysis affirms that government efficiency, democracy, ruling party ideology, political stability, and economic freedom moderate the link between government R&D expenditure and national innovation capacity. These insights offer new references for governments to promote innovation. First published online 23 October 2024.
... Furthermore, GPP helps to stimulate businesses' green investments and environmental governance, promoting green technological innovation by enterprises. Castellion and Markham (2013) pointed out that 40% of innovation activities fail. Tsuboi (2020) found that higher research and development uncertainty reduces firms' willingness to invest in R&D, leading to a greater allocation of resources toward the production of final products. ...
Based on a database of over 650,000 green public procurement (GPP) contracts, we apply machine learning and text analysis methods to identify GPP. Our study examines the impact of GPP on green innovation using Chinese companies listed on the A-share market. The study has the following findings. (1) GPP significantly promotes green innovation by alleviating financing constraints and incentivizing green practices. (2) Enterprises in the maturity or growth stage, non-heavily polluting firms, and companies in regions with stringent environmental regulations are more likely to benefit from GPP. Additionally, GPP initiatives from local governments, centralized procurement, and university-based programs provide stronger incentives for green innovation. (3) Demand-side GPP and supply-side subsidies for green innovation have coordination effects. Corporate green innovation is positively influenced by the “Demand-side procurement First, Supply-side subsidies Later (DFSL)” and the “Demand-side procurement and Supply-side subsidies Simultaneously (DSS)” policies.
... While it is difficult to say how many marketmaking endeavours fall short or misfire (cf. Callon, 2010), product failure rates of around 40 % are indicative of the challenges that market actors face (Castellion & Markham, 2013). ...
Market-referencing helps market actors learn from what has gone before-saving them from reinventing the wheel. While extant studies show that market-referencing is essential for stabilising and legitimising new markets , little is known about how market-referencing is used to infrastructure consumer serving markets. This paper reveals the mechanisms through which market-referencing enactments infrastructure a new consumer market, as a stable, legitimate, functioning market. Using a theories-in-use approach, we analyse how exchange, repre-sentational and normalising practices from a referent market are picked-up, extended, and modified to transform, the Electric Vehicle (EV) charge point infrastructure in the UK. Infrastructural objects (charge points, rules, and exchange terms) manifest referent market practices in the new market, resituating and entangling them with new practices and materialities. In the process, the EV market charging infrastructure is reordered to constitute a functioning market.
... Under stricter EPLs, employees can only be asked to work a certain number of extra hours, while lower labor mobility makes it more challenging, and thus costly, to attract new recruits. In addition, product launch is uncertain, and many launches fail (e.g., Castellion and Markham, 2013;Kim et al., 2022), obliging managers to quickly release employees-but under strict EPLs, the costs of dismissal are high. ...
... These challenging situations are far more evident for entrepreneurial firms which tend to operate in resource-constrained environments due to their newness and smallness (Delerue & Lejeune, 2012). Entrepreneurs' perceptions of their firms' smallness mean that in seeking resources they tend to approach existing networks rather than new or larger networks (Akrout, 2014;Castellion & Markham, 2013). Utilizing existing ties reduces entrepreneurs' risks of working with unknown parties and reduces search and time cost (Kollock, 1994;Kuwabara, 2011). ...
The entrepreneurship literature demonstrates the positive impact of network bricolage on resource-seeking. We extend this work by examining why and how entrepreneurs reconfigure ties within the social architecture of their networks. Building on the network bricolage literature and an in-depth analysis of 55 dyadic relationships embedded in four networks, we provide evidence of network bricolage behavior indicating that entrepreneur bricoleurs are, in fact, resource-creators as well as resource-seekers. Our data cover a series of preliminary and in-depth interviews, member checks, site visits, direct observations, and archival sources. We find support for our theoretical arguments that more resources and re-deployment opportunities for developing new products, new markets, and operation efficiencies emerge during bricolage processes when bricoleurs use their networks in ways that differ from their originally intended utility. While the strength of network ties is important in its own right, our findings further suggest that heterogeneity of relationship type is a key factor in pursuing network bricolage. A mix of relationship roles provides opportunities to repurpose network resources to achieve new valued outcomes.
... Despite substantial investments in new product development, a significant portion (approximately 40 %) of newly launched products disappear from the market (e. g., Castellion & Markham, 2013). Novel products are new to the market and show substantial differences from existing ones in terms of innovativeness and uniqueness (Herzenstein et al., 2007;Mansori et al., 2015). ...
Team diversity must be promoted in many societies. While prior studies have emphasized the consequential impact of diverse teams on businesses, particularly in Western countries known for their racial and gender diversity, there is a notable gap in research exploring the role of team diversity on consumer evaluations among non-WEIRD (Western, Educated, Industrialized, Rich, and Democratic) consumers. Drawing upon signaling theory, our research aimed to investigate the influence of team diversity on consumer evaluations of both typical and novel food products within the non-WEIRD context of Japanese consumers. Japan, with its relatively low diversity in terms of gender and cultural ethnicity compared with North American and European countries, offers a unique background for exploring diversity issues. Through three online studies, we examined the impact of team ethnic diversity (Studies 1 and 2) and team age/gender diversity (Study 3) on purchase intentions toward typical and novel products. Our findings reveal that in Japan, information about gender and age diversity positively influences the purchase intention of food products, regardless of the novelty of the product. Notably, no such effect was observed for racial diversity. These results suggest that the positive influence of gender and age, but not racial diversity, can be generalized to non-WEIRD Japanese samples, contributing valuable insights into understanding team diversity dynamics in consumers' evaluations of purchase intentions.
... In product development, the effectiveness of creating new products in an organization is reliant on individuals' ability to promote new ideas (Chakrabarti, 1974), and championing new ideas in organizations requires persistence (Howell et al., 2005). Champions provide vital protection and traction to ideas in organizations to usher them from conception to implementation (Schön, 1963), as new products and product ideas carry a degree of risk (Castellion & Markham, 2013), being subject to scrutiny from various organizational actors prior to granting development resources. Indeed, one successful innovation can require as many as 3000 ideas, or nine development projects (Stevens & Burley, 1997). ...
While past research has shown that championing plays a key role in sheltering and advancing novel ideas towards implementation, relatively little is known about how adversity and failure are dealt with through championing behaviour. The current embedded case study draws from 43 interviews in a large industrial technology organization, examining new product and service development idea pathways. We found four types of championing responses in the 61 instances where initial idea advancement efforts did not bear fruit: lateral shifts, reworking, temporal shifts and moaning. In each of these, the idea was seen as valuable by the developer, but the attribution of initial failure and perceptions of effort-to-performance and performance-to-outcome expectancies varied in distinct combinations of conforming and nonconforming types of championing with varying intensity. Taken together, the results contribute towards understanding the multidimensional nature and temporal dynamics of championing in persisting under adversity by illuminating factors that contribute to championing response type decisions and opportunities to better support idea development efforts in organizations.
... In the context of technological innovation, the concept-product gap is the time it takes an organisation (or individual) to progress from proof of concept to delivering a fully deployable product (Ng, 2021) and implies a potentially laborious process of 'bridging the gap' marked by inherent uncertainties, as the process does not always lead to success (Castellion and Markham, 2013). This challenge is especially pronounced in the context of AI innovation (outside consumer internet businesses) which, according to practitioners is difficult to successfully deploy beyond pilot programmes (McCormick, 2020;Ng, 2021;Davenport and Mittal, 2023). ...
... A large body of literature finds that firms experience a failure rate of approximately 40% in their product innovations due to the absence of a focus on the ever-changing market environment [10,11]. Accordingly, organizational agility (OA) is closely linked to dynamic capability, a critical success factor for firms operating in unpredictable business environments [12,13]. ...
This study aims to explore potential mechanisms of ambidextrous leadership (AL) in product innovativeness from the perspective of organizational agility (OA) and entrepreneurial orientation (EO) in firms operating in the artificial intelligence (AI) industry. A quantitative research method was used with 405 questionnaires, and the respondents were randomly selected from reputable databases. Structural equation modeling was employed to evaluate the model fit and conduct hypothesis testing. The findings suggest that ambidextrous leadership demonstrates a significant positive influence on product innovativeness and OA; also, through the mediating role of OA, it is possible to analyze both the direct and indirect relationships among the factors. Additionally, the moderating effect of EO on the intercorrelations among these factors was explored. This study enhances existing knowledge on leadership dynamics in the context of new product development, highlights the importance of adaptability in leadership, and sheds light on the interplay between OA, EO, and new product innovation. This study highlights the role of product innovativeness in sustainable AI product development. Enhanced product innovativeness not only sustains AI product development but also promotes environmental sustainability. This is achieved through the minimization of energy use, reduction in material requirements, and prevention of pollution. Firms are using these insights to develop sustainable and eco-friendly products, as well as create new market opportunities while reducing environmental impact. This research underscores the interconnectedness of factors in this study and sustainability, providing a new perspective on sustainable AI product development.
... Innovation is known to be challenging, and new ideas are prone to failure. A review of recent generic research (Castellion & Markham 2013) found that one of the primary causes of the approximately 40% failure rate of innovations is consumer resistance. This raises the question of why there is opposition to innovations that have the potential to perform better than existing products. ...
This research explores consumer resistance to smartphone innovation in the Erbil/Iraq, uncovering several significant findings. The main goal of the study was to identify the consumer characteristics that influence this resistance and its implications. For smartphone manufacturers, marketers, representatives, and researchers, this study offers a comprehensive understanding of consumer behavior and resistance to technological progress. The results can guide targeted strategies to overcome barriers, improve product development, and increase market share. The study contributes to our understanding of innovation resistance in the unique context of the Erbil/Iraq, highlighting the importance of conducting thorough investigations in similar circumstances. In light of the findings of the demographic survey, a significant portion of respondents were young people, supporting the widely held belief that young individuals are more likely to adopt new technology. However, the study emphasizes that age is not the sole determinant of resistance to innovation. The diminished impact of income, marital status, and gender on resistance indicates a complex interplay of factors. Conversely, a higher level of education was associated with a greater likelihood of embracing smartphone innovation. The study delved into various aspects of innovation and revealed that self-efficacy, motivation, complexity, perceived risk, and expectations of a superior product all significantly influenced consumer resistance. Resistance showed a negative correlation with self-efficacy as a psychological trait, suggesting that individuals with higher levels of self-efficacy were less resistant to smartphone innovation. Conversely, higher levels of complexity, perceived risk, expectations of a better product, and motivation were linked to increased resistance, highlighting the crucial role of behavioral and psychological characteristics in shaping consumer attitudes towards innovation. Relative advantage did not appear to have a significant influence, while compatibility and attitudes towards current products were deemed insignificant predictors of resistance. These findings underscore the intricate nature of innovation resistance and demonstrate that socio-demographic traits alone are insufficient as predictors. Consumer resistance is largely shaped by psychological elements such as self-efficacy, motivation, expectations, complexity, and perceived risk.
... Novelty is the core characteristic of innovations and implies significantly greater risk as compared to routine performance or mere adoptions. Statistics show that 40% of the innovative products fail (Castellion & Markham, 2013) whereas the success rate in developing countries is only 2% (Ozer, 2006). In such situations risk taking by implementing new ideas seems tough decision, whereas excessive risk management can badly discourage radical ideas (Bowers & Khorakian, 2014). ...
The study proposes that employees' innovative behaviour in the workplace does not always translate into a significant innovation at the organizational level. A review of innovation literature suggests that management strategic orientation significantly influences the utilization of individual innovative behaviour into organizational outcomes. Among such management orientations, the most critical are the imitation orientation and risk aversive orientation towards innovations. The study also identifies four antecedent factors that stimulate innovative behaviours in employees including harmonious passion, perceived autonomy support, perceived peers' expectations and psychological contract fulfillment, formulating a holistic framework to explain individual and organizational innovativeness. This study contributes to innovation literature by explaining the dynamics of why firms fail to bring innovations in products and services even after evoking the individual innovative behaviour in the workplace?
... According to Nielsen statistics, more than 80% of new consumer packaged goods fail every year (Kocina, 2017). A study by Product Development and Management Association found that failure rate ranges from 35% for healthcare to 49% for consumer goods (Castellion, 2012;Castellion & Markham, 2013). While less than 3% of new consumer packaged goods exceed first year sales of $50 million, which is considered a benchmark of a highly successful launch (Gilbert, 2018). ...
... They have an innate desire to adopt innovations. However, product failures are at a staggering high rate with difference on the exact percentage points [7]. The number may vary from paper to paper but still it is sufficient to draw attention to the fact that users are not willing to adopt innovations. ...
Consumers are increasingly making decisions where they are rejecting the innovations even prior to the evaluation. This is leading to product failures at a staggering rate. It will also lead to unprecedented consequences for innovators and the industry. We try to evaluate this issue at the individual level, trying to find reasons that exist at the cognitive level. We are seeking into the issue of why people are non-adopters at the initial level. We deploy DEMATEL approach to investigate the issue. The findings lead to the role of cognitive rigidity, routine seeking nature as well as short term focus of the consumers.
... Managers are saying "yes" to too many bad projects that should have been killed. According to the project attrition curve, only 30 percent of projects approved for development become commercial successes (Barczak, Griffin, and Kahn 2009;Castellion and Markham 2013). Effective portfolio management could improve NP success rates and thus R&D productivity. ...
This article presents the findings of an Innovation Research Interchange (IRI) study on practices and outcomes in new product (NP) portfolio management.
Given the substantial investments in R&D)and the consequential impact on the business’s future, effective portfolio management decisions play a pivotal role in achieving business success. These decisions influence R&D productivity, the success rates of new products, and several other performance metrics related to NP.
... If there is a high level of active innovation resistance among consumers in the MGS target market, revenues from new products and services are significantly reduced. In addition, new product and new service failures regularly jeopardize the overall competitiveness of the business (Castellion & Markham, 2013). Therefore, there is a need to understand the product-related reasons against consumers' MGS adoption. ...
Çalışma, tüketicilerin fonksiyonel, psikolojik ve duygusal engellerinin mobil market alışverişi (MMA) hizmetlerinin kullanımı üzerindeki etkisini incelemeyi amaçlamaktadır. MMA hizmetlerinin öncüllerini araştırmak için araştırma modelinde, İnovasyon Direnç Teorisinden kullanım engeli, değer engeli, risk engeli, gelenek engeli, imaj engeli değişkenleri kullanılmış ayrıca duygusal engellerden zevk engeli, uyarılma engeli, hakimiyet engeli değişkenleri kullanmıştır. Ankara’da yaşayan 399 katılımcıdan anket uygulaması ile toplanan veriler yapısal eşitlik modellemesi ile analiz edilmiştir. Analiz sonuçlarında imaj engeli dışındaki İnovasyon Direnç Teorisi faktörlerinin MMA hizmetlerini kullanım niyeti üzerinde negatif etkiye sahip olduğu bulunmuştur. Ayrıca duygusal engeller faktörlerinden hakimiyet engelinin kullanım niyeti üzerinde anlamlı bir etkisi olmadığı tespit edilmiştir.
... An important factor that influences the implementation of new ideas in organizations is organization members' willingness to support and implement an innovative idea. However, it seems that people generally tend to be hesitant to adopt innovation (Castellion & Markham, 2013;Hosseini et al., 2016). The tendency to oppose changes such as the use of innovative ideas, programs, or methods within the organization is defined as resistance to change (Scholkmann, 2021). ...
... However, in an environment of high uncertainty, NPD generates risk, which can explain the high failure rate of such projects (Cooper, 2017)-ranging from 30% to 95% (Bowers and Khorakian, 2014;Cooper, 2011;Rhaiem and Amara, 2019). As a result, few projects make it into the commercialization stage (Castellion and Markham, 2013;Cooper, 2017). ...
Purpose
This paper aims to understand and document evaluation criteria used in the new product development (NPD) process of small- and medium-sized enterprises (SMEs) to support the management and control of their NPD projects.
Design/methodology/approach
This study combines exploratory and explanatory methodology (case studies) involving five Canadian small and medium enterprises (SMEs) that are successful in NPD. The authors conducted semi-structured interviews with nine selected managers and project managers to explore the process and evaluation criteria used to manage and control NPD projects.
Findings
The results highlight that cost, time and quality are key evaluation criteria used by SMEs to make decisions relative to the NPD project's success. Profitability, return on investment, expected sales and customer satisfaction are additional criteria used to evaluate NPD project's success. It has been also found that the SMEs did not consider sustainability issues in the criteria used as their focus are on the needs of stakeholders, mainly customers.
Research limitations/implications
Limitations: The evaluation criteria are extracted from a limited number of SMEs that have successfully carried out NPD projects and may therefore be influenced by some contextual factors. The results cannot be generalized to all SMEs or to all projects, as their characteristics may differ. Implications: This study offers a novel outlook on NPD process in SMEs, by documenting criteria related to constraints in project management. The integration of theory of constraints contributes to increasing theoretical knowledge about the management and control of NPD projects in SMEs. It provides insight into how project managers (and other decision makers) can increase the chances of project success by managing project constraints and criteria.
Practical implications
The evaluation criteria identified in this study can therefore be of use to SMEs managers and project leaders seeking to improve the management and control of their NPD projects. These criteria can help them better manage their limited resources and skills and allocate them to the most promising projects. They can also help them conduct their NPD process more efficiently to achieve the intended objectives, including the desired project profitability targets.
Originality/value
This paper offers new insight and practical implications about evaluation criteria within the stages and activities of the NPD process that needed to be considered by SMEs' managers involved in NPD projects.
... Most technology acceptance and adoption studies assume that people are generally receptive to new technologies or have first-hand experience with them (e.g., Koufaris, 2002;Moriuchi, 2019). This pro-innovation bias, however, tends to overshadow the reality of substantial high-tech innovation failures (Castellion & Markham, 2013;Sheth & Stellner, 1979;Talke & Heidenreich, 2014). Consumer resistance and rejectionist attitudes are major drivers of such failures (Talke & Heidenreich, 2014). ...
Smart home assistants (SHAs) have gained a foothold in many households. Although SHAs have many beneficial capabilities, they also have characteristics that are colloquially described as creepy-a fact that may deter potential users from adopting and utilizing them. Previous research has examined SHAs neither from the perspective of resistance nor the perspective of creepiness. The present research addresses this gap and adopts a multi-method research design with four sequential studies. Study 1 serves as a pre-study and provides initial exploratory insights into the concept of creepiness in the context of SHAs. Study 2 focuses on developing a measurement instrument to assess perceived creepiness. Study 3 uses an online experiment to test the nomological validity of the construct of creepiness in a larger conceptual model. Study 4 further elucidates the underlying behavioral dynamics using focus group analysis. The findings contribute to the literature on the dark side of smart technology by analyzing the triggers and mechanisms underlying perceived creepiness as a novel inhibitor to SHAs. In addition, this study provides actionable design recommendations that allow practitioners to mitigate end users' potential perceptions of creepiness associated with SHAs and similar smart technologies.
... The lack of reliable approaches to anticipate consumer behavior can generate significant consequences. In fact, it is estimated that between 40 and 80% of new products introduced to the market are unsuccessful, causing economic damage to companies that translates into losses of billions of dollars (Castellion and Markham, 2012;Hakim and Levy, 2019). In the future, the integration of other traditional techniques side by side with neuroscientific ones may elucidate new and as yet little known aspects on the topic. ...
This paper presents an innovative research project that aims to study the emotional factors influencing decision-making elicited by infomercials, a powerful sales technique that uses emotional communication to engage viewers, capture attention, and build trust. Using cutting-edge consumer neuroscience techniques, this study focuses on the identification of the variables that most impact the Call-to-Action and Purchase Intention. Forty participants were selected and divided into two groups, with each group exposed to one of two infomercials (condition A = male seller; condition B = female seller). EEG signals were recorded as well as Eye-tracking data. After the viewing, participants completed a self-report questionnaire. Results show that seller characteristics such as Performance and Trustworthiness, as well as Neurophysiological variables such as Approach-Withdrawal Index, Willingness to Pay, Attention and Engagement, significantly impact the final Call-to-Action, Purchase Intention, and infomercial Likeability responses. Moreover, eye-tracking data revealed that the more time is spent observing crucial areas of the infomercial, the more it will increase our Willingness to Pay and our interest and willingness to approach the infomercial and product. These findings highlight the importance of considering both the Seller attributes and the consumers’ Neurophysiological responses to understand and predict their behaviors in response to marketing stimuli since they all seem to play a crucial role in shaping consumers’ attitudes and purchase intentions. Overall, the study is a significant pilot in the new field of neuroselling, shedding light on crucial emotional aspects of the seller/buyer relationship and providing valuable insights for researchers and marketers.
A new business model has arisen in recent years where online retail platforms acquire consumer preference information from their big data and pass this information to manufacturers to guide their design decisions. This represents a platform‐led approach in new product development and is known as the consumer‐to‐manufacturer (C2M) model. This paper analyzes a platform's incentive to launch the C2M project and a manufacturer's incentive to participate. We formulate a game‐theoretical model where the platform determines the information acquisition level and the manufacturer determines the R&D effort for new product development. After the development is complete, the new product is sold through the platform using the wholesale model. We find that as the manufacturer's R&D effectiveness increases, the platform engages in a higher level of information acquisition due to the complementary relationship between R&D effort and information acquisition. Also, as the R&D effectiveness increases, the C2M project generates greater benefits for both the platform and the manufacturer, which increases the likelihood of C2M project implementation. Moreover, our analysis shows that the C2M project becomes less beneficial to both parties under ex‐post pricing (where prices are set after consumer valuation is realized) than under ex‐ante pricing (where prices are set before consumer valuation is realized). This suggests that the project is less likely to be implemented as pricing flexibility increases. Finally, analyzing the impact of selling formats, we show that the C2M project yields a greater benefit to the platform under the agency model than under the wholesale model.
Purpose
Despite a sizeable body of innovation adoption scholarship, innovation failure rates are estimated to be in the range of 40% to 80%. This study aims to better explain the complex consumer decision-making journey by leveraging behavioral reasoning theory (BRT) and integrating the dichotomous influences of reasons for (RF) and reasons against (RA), and the role of moderators in a unified behavioral framework.
Design/methodology/approach
First, an exploratory reason elicitation study was conducted ( n = 44) to propose a theoretical model with contextual reasons for and against constructs. Second, a quantitative study was conducted ( n = 400) to validate the hypothesized structural relationships and the role of moderators.
Findings
Reasons for and against adoption are discrete constructs and significantly impact consumer attitudes and intentions. Reasons for adoption emerge as the strongest influencing factor in shaping consumer attitudes. Values influence intentions directly and via reasons but do not influence attitudes. Consumer innovativeness and external stressors moderate consumers’ resistance toward adopting innovations.
Practical implications
This study presents a novel approach for managers to generate deeper insights into consumer decision-making by integrating contextual reasons for and against, as well as the role of moderators in a unified behavioral framework. This approach enables managers to address both drivers and inhibitors of adoption in the specific radical innovation context they are working on.
Originality/value
This study integrates reasons for and against in a unified behavioral framework and applies it to radical technological innovations in an emerging market context. This study introduces novel constructs to BRT and examines the role of moderators in the BRT framework.
The paper responds to imperatives for reduced carbon emissions on retrofitted green roofs and on the benefits of green roofs. In so doing it addresses local considerations surrounding their continued implementation across KwaZulu-Natal. In the current research on urban greening in South Africa, there are several gaps regarding green roofs, related to construction materials, suitable planting mediums and plants and considerations on drainages contrast with, international norms and standards.
In today's competitive and rapidly developing market, the importance of innovative products is increasing. Innovative products are needed to maintain growth and competitiveness. For this purpose, companies study on innovative applications and try new methods in product development processes. In this context, this study focuses on integrating the TRIZ tool into the product development process and producing creative solutions to the problems encountered during the design and development phase. And the benefit of TRIZ is discussed by conducting a case study involving the development of an innovative product. In the case study, the development process of the oil cap, which is located on the propeller shaft used to transmit torque and rotation in motor vehicles and whose main function is to provide sealing between the external environment and the internal volume of the propeller shaft, is discussed. The reason why the oil cap was chosen as a case study was the difficulty encountered in the design process, as the oil cap was expected to both provide sealing and allow air flow in the area where it was positioned. TRIZ methodology was successfully implemented to development of the oil cap. As a result of the study, an innovative product was developed, and validated by implementing tests. Thus, TRIZ's contribution to innovative product development was objectively demonstrated with a case study in which a commercialized product was developed. Besides, a practical guide based on real study, which designers could apply in innovative product development, was presented by this study.
Purpose
In this study, we explore the impact of innovation failure on organizational strategy from a risk governance perspective, considering systems thinking as a mediating variable and risk perception as an essential weighting variable.
Design/methodology/approach
This paper conducts questionnaire research using 364 survey data from high-tech small and medium-sized enterprises (SMEs) in China. It uses a hierarchical regression approach to test an original model.
Findings
The results indicate that systems thinking mediates the effect of innovation failure on organizational strategy. The contingency analyses also revealed that the positive impact of systems thinking on imitation strategy is stronger at high levels of risk perception. However, the relationship between systems thinking and innovation strategy is weaker when the risk perception is high.
Originality/value
This paper constructs a theoretical research framework for risk governance to explore how innovation failure affects enterprises’ future organizational strategy, offering valuable insights for enterprise innovation management after innovation failure.
Bu çalışma, inovasyon ve yeni ürün geliştirme süreçlerinin önemini ve sektörlere
etkilerini ele almaktadır. İnovasyon, ekonomik büyümenin anahtarlarından
biri olup, işletmelerin rekabet avantajı elde etmesi ve sürdürülebilir büyüme sağlaması
için hayati öneme sahiptir. Yeni ürün geliştirme, inovasyonun temel bileşenlerinden
biri olarak öne çıkmakta ve işletmelere pazarda farklılaşma ve müşteri
taleplerine hızlı yanıt verme imkânı sunmaktadır. Yeni ürün geliştirme süreçleri,
işletmelerin rekabetçi kalmasına ve müşteri ihtiyaçlarını karşılamasına olanak
tanımaktadır. Bu süreçler, işletmelere yenilikçi çözümler sunarak tüketici memnuniyetini
artırma fırsatı verirken, tüketicilerin yaşam kalitesini yükseltmektedir.
Örneğin, teknolojik yenilikler sayesinde daha verimli ve kullanıcı dostu ürünler
piyasaya sürülmekte, bu da tüketicilere daha iyi bir deneyim sunmasına olanak
tanımaktadır.
İşletmeler açısından yeni ürün geliştirme, pazar payını artırmak ve yeni müşteri
segmentlerine ulaşmak açısından büyük önem taşımaktadır. Ayrıca, yeni ürünlerin
başarılı bir şekilde piyasaya sürülmesi, işletmelerin marka değerini ve itibarını artırmaktadır. Ülkeler açısından bakıldığında, yeni ürün geliştirme ve inovasyon,
ekonomik kalkınmanın ve büyümenin itici gücü olarak görülmektedir. Yenilikçi
ürünler ve teknolojiler, ulusal ekonomilerin rekabet gücünü artırmakta ve global
pazarda daha güçlü bir konum elde etmelerine yardımcı olmaktadır. Bu bağlamda,
inovasyon ve yeni ürün geliştirme süreçleri, ekonomik büyümeyi desteklerken, tüketici
ihtiyaçlarını karşılayan çözümler sunmaktadır. Bu süreçlerin etkin yönetimi,
gelecekteki başarılar ve sürdürülebilir kalkınma için önemli rol oynamaktadır.
This research develops a new metric (PBCM) that can identify products within a portfolio that are eroding visual branding cohesion. We show how this new measure gives results equivalent to consumer evaluations of cohesion, without costly and time intensive data collection. The sampling frame for this research is 10 portfolios from five categories (dry dog food, instant coffee, toothpaste, shower gel and chewing gum) in the United Kingdom. In addition, 626 consumers were surveyed to investigate how PBCM affects a consumer’s ability to match an individual product back to its portfolio and recall the brand name. We find that products from high cohesion portfolios have significantly higher (17%) correct brand recall than those from low cohesion portfolios and are matched back to their portfolio by more than twice as many respondents (79% v 35%), significantly faster (2.3 vs. 3.8 minutes).
Purpose
This paper investigates the impact of strategic alliance network centrality and structural holes on firm innovation efficiency. In addition, the paper aims to explore the moderating effects of government R&D subsidies and firm technology standardization.
Design/methodology/approach
Based upon the literature on strategic alliance networks, this paper proposes a conceptual model with several hypotheses. The empirical analysis is based on a sample of 736 observations from 92 mechanical manufacturing firms in China from 2010 to 2017. We measured firm innovation efficiency via the DEA model and performed quantitative analysis with GMM estimation.
Findings
The results indicate that strategic alliance network centrality is positively related to firm innovation efficiency, and structural holes have a U-shaped relationship with firm innovation efficiency. Government R&D subsidies positively moderate the relationship between centrality and firm innovation efficiency. Firm technology standardization positively moderates the relationship between centrality and firm innovation efficiency and the U-shaped relationship between structural holes and firm innovation efficiency.
Practical implications
Firms should focus on improving innovation efficiency and maximizing innovation output under limited resources. Furthermore, managers ought to strengthen cooperation between firms and external alliances while promoting the utilization of strategic alliance network position resources to benefit innovation efficiency.
Originality/value
This paper considers that innovation efficiency, including input and output processes, is more representative than innovation performance, and few studies have focused on the relationship between strategic alliance networks and innovation efficiency. To fill this research gap, this paper explores the impact of strategic alliance network position embedding on innovation efficiency.
One of the key challenges for innovative companies is reducing innovation failures and the loss of scarce resources. This study investigates two under-explored aspects of innovation failure: training for innovative activities and public support for innovation. It uses data from five waves of the Community Innovation Survey (2008–2018) on more than 29,000 firms in seven emerging European innovation systems known for their weak innovation capacity, information asymmetries, and systemic failures, which increase the risk of innovation failure. We employ a matching treatment analysis method and assess the robustness of our findings with the help of multi-valued treatment, the lasso machine learning treatment technique, and entropy balancing. This study identifies the diverse effects of training for innovative activities and national and EU public support for innovation on groups of innovation incumbents and entrants. The findings show that a combination of training for innovative activities and EU innovation support helps firms reduce their chances of innovation failure. The results reaffirm the strong reliance of firms in these economies on EU funding and the limitations of national innovation policies. The findings can inform the design and implementation of innovation policies in emerging innovation systems and multi-level contexts, such as the EU.
Innovation performance is a crucial element for organizational success in today's intensely competitive business environment. However, low success rates in innovation processes can negatively affect many organizational outcomes, reducing the effective use of resources and customer satisfaction. Innovation requires both an organizational climate that supports employees who are supportive, diverse and offer innovative solutions and suggestions through different information channels, and also a leadership practice that ensures the formation of this climate. In this context, inclusive leadership, which creates a sense of trust, respect, and belonging among followers, can significantly contribute to increasing innovation performance. This study aims to examine the relationship between innovation and inclusive leadership within studies that provide empirical results. To achieve this, studies containing the keywords innovation and inclusive leadership were identified in the Web of Science database. The studies were categorized based on several factors, including the author, publication date, type of research, sample size, and variables. The results of empirical studies on innovation and inclusive leadership are shared. This study is expected to increase awareness of inclusive leadership practices in increasing innovation performance in businesses. Additionally, it expands the literature by presenting empirical studies on the relationship between innovation and inclusive leadership.
Improvements in the standard of living depend to a remarkable degree on the success of industrial innovations, but the odds of any one idea becoming an economic success are so very low that many ideas are needed. Success curves for industrial innovation have been developed from three major sources, including: the project literature, patent literature and experience, and venture capitalists. Remarkably similar results were found from all three sources of information.
Understanding success curves is important for at least three reasons: 1. To set expectations of those involved in industrial innovation; 2. To benchmark one's own process against others in the industry; and, 3. To calculate future expected benefits from current innovation spending as a function of the stage of the new product development process and the typical success rates found for each stage.
The two fundamental bases of competitiveness as we move into the next century are surely exceptional customer service and product innovation. The customer service challenge has been tackled aggressively, as numerous companies have successfully implemented quality of service programs. As for the other key, for too many companies, it's not so clear that they'll be any closer to the goal of a successful product innovation program in 10 years than they are today. Indeed, the secrets to success at product innovation and the enviable goal of having a steady stream of new product winners seems to be more elusive than ever. But the quest must go on, because the stakes are so high and the rewards so positive. This article explores the keys to new product success. These keys are based on an extensive empirical study of 103 actual new product projects in one industry (see sidebar for more details on the study) - one study in an ongoing research series called NewProd. All the 103 new products studied were launched: two-thirds succeeded commercially, the other one-third were considered commercial failures. By comparing and contrasting how the successful ventures differed from the duds, we were able to identify those characteristics and practices which really discriminate between winning and losing in product innovation.
Winning at New Products is a 2001 book. It is now in its 5th edition, "Winning at New Products: Creating Value Through Innovation" 5th ed..
Available as paperback on Amazon.
Product development professionals may have the feeling that yet another buzzword or magic bullet always lurks just around the corner. However, researchers have devoted considerable effort to helping practioners determine which tools, techniques, and methods really do offer a competitive edge. Starting 30 years ago, research efforts have aimed at understanding NPD practices and identifying those which are deemed “best practices.” During the past five years, pursuit of this goal has produced numerous privately available reports and two research efforts sponsored by the PDMA.
Abbie Griffin summarizes the results of research efforts undertaken during the past five years and presents findings from the most recent PDMA survey on NPD best practices. This survey, conducted slightly more than five years after PDMA's first best‐practices survey, updates trends in processes, organizations, and outcomes for NPD in the U.S., and determines which practices are more commonly associated with firms that are more successsful in developing new products. The survey has the following objectives: determining the current status of NPD practices and performance; understanding how product development has changed from five years ago; determining whether NPD practice and performance differ across industry segments; and, investigating process and product development tools that differentiate product development success.
The survey findings indicate that NPD processes continue to evolve and become more sophisticated. NPD changes continually on multiple fronts, and firms that fail to keep their NPD practices up to date will suffer an increasingly marked competitive disadvantage. Interestingly, although more than half of the respondents use a cross‐functional stage‐gate process for NPD, more than one‐third of all firms in the study still use no formal process for managing NPD.
The findings suggest that firms are not adequately handling the issue of team‐based rewards. Project‐completion dinners are for the most frequently used NPD reward; they are also the only reward used more by best‐practice firms than by the rest of the respondents. The best‐practice firms participating in the study do not use financial rewards for NPD. Compared to the other firms in the study, best‐practice firms use more multifunctional teams, are more likely to measure NPD processes and outcomes, and expect more from their NPD programs.
What is the key to success in industrial product innovation? This question is frequently posed, and many authors and managers have speculated as to which critical factors or variables decide the fate of new industrial products. What is missing in the debate is evidence based on actual new product successes and failures. Project NewProd is an investigation that was designed to fill this void. In this article we report the results of a study into a large number of successful and unsuccessful new products, project NewProd, whose goal was to identify the determinants of commercial success in industrial product innovation.
Bases itself on the findings of Project NewProd — which was an investigation of almost 200 new product cases to probe what separates winners from losers. Presents results from the managerial perspective, showing how selection of new products and particularly that of potential 'winners' is undertaken. Outlines key factors that underlie new projects and the influence of these on product success. Examines merits of emphasizing certain new product activities, using information that helps to launch, with impact, product launch success. States that product development is critical to the firm strategically, beside its cost. Documents that of every 58 product ideas that enter the process just two reach commercialisation stage, and only one is a success. Proclaims that new product failure rates are estimated at between 30 and 60 per cent and of 100 products developed 21.9% are killed prior to launch, 18.7% are commercial failures and 59.4% are successful. Investigates and explores the reasons for failures and successes in great detail with use of figures and tables for further explanation. Concludes that Project NewProd has identified specific properties and dimensions differentiating industrial new product success and failure.
In a comprehensive study of 252 new product histories at 123 firms, Robert Cooper and Elko Kleinschmidt looked critically at the new products management process. Each company was shown a set of 13 activities which formed a general “skeleton” of a new product process. This article examines how this structure was modified by the companies and how well various stages of the process were reportedly executed. The results show a variety of practices among the surveyed companies. While the presence of activities cannot guarantee successful new products, certain activities were singled out as particularly weak. Firms should consider placing more emphasis on market studies, initial screening activities, and preliminary market assessment. The article provides a thoughtful assessment of the level of implementation of current practices in new products management.
Given: (1) today's sophisticated marketing research technology; (2) a high rate of new product failure; and (3) failure attributed primarily to mistakes marketing research should prevent. Why? This article offers nine possible explanations.
Since 1990, the Product Development & Management Association (PDMA) has sponsored best practice research projects to identify trends in new product development (NPD) management practices and to discern which practices are associated with higher degrees of success. The objective of this ongoing research is to assist managers in determining how to improve their own product development methods and practices. This paper presents results, recommendations, and implications for NPD practice stemming from PDMA's third best practices study, which was conducted in 2003. In the eight years since the previous best practices study was conducted, firms have become slightly more conservative in the portfolio of projects, with lower percentages of the total number of projects in the new-to-the-world and new-to-the-firm categories. Although success rates and development efficiencies have remained stable, this more conservative approach to NPD seems to have negatively impacted the sales and profits impact of the new products that have been commercialized. As formal processes for NPD are now the norm, attention is moving to managing the multiple projects across the portfolio in a more orchestrated manner. Finally, firms are implementing a wide variety of software support tools for various aspects of NPD. NPD areas still seriously in need of improved management include idea management, project leadership and training, cross-functional training and team communication support, and innovation support and leadership by management. In terms of aspects of NPD management that differentiate the “best from the rest,” the findings indicate that the best firms emphasize and integrate their innovation strategy across all the levels of the firm, better support their people and team communications, conduct extensive experimentation, and use numerous kinds of new methods and techniques to support NPD. All companies appear to continue to struggle with the recording of ideas and making them readily available to others in the organization, even the best. What remains unclear is whether there is a preferable approach for organizing the NPD endeavor, as no one organizational approach distinguished top NPD performers.
The continuous development and market introduction of new products can be an important determinant of sustained company performance. For approximately 30 years, conceptual and empirical research has been undertaken to identify the critical success factors of new products. This paper reviews the findings of empirical work into the success factors of new product development (NPD). It is the prime objective of this work to summarize the most important findings in a compact and structured way. In addition, shortcomings of previous empirical work on NPD success factors will be discussed and suggestions for improvement in future empirical NPD studies will be made.
In 1968 and 1982 cross-sectional studies of the conduct and performance of new product development were reported, the wide-ranging results of which have been widely reproduced and cited as norms for product development. Since the more recent study, many changes in the practice and environment of product development have occured. Albert Page describes the findings of a new cross-sectional study, sponsored by PDMA, which reports on the current status of new product development and updates those commonly referred to norms. On the one hand, this article reports that the state of practce, covering both structure and process, has improved, although there is still substantial room for further improvement. On the other hand, the results for five different measures of firm and program performance indicate these practice improvements have not resulted in notable improvements in the overall performance of the new product development activity within the responding companies.
Companies that introduce new innovations are the most likely to flourish, so they spend billions of dollars making better products. But studies show that new innovations fail at a staggering rate. While many blame these misses on lackluster products, the reality isn't so simple. The goods that consumers dismiss often do offer improvements over existing ones. So why don't people purchase them? And why do companies keep peddling products that buyers are likely to reject? The answer, says the author, can be found in the brain. New products force consumers to change their behavior, and that has a psychological cost. Many products fail because people irrationally over-value the benefits of the goods they own over those they don't possess. Executives, meanwhile, overvalue their own innovations. This leads to a serious clash. Studies show, in fact, that there is a mismatch of nine to one, or 9x, between what innovators think consumers want and what consumers truly desire. Fortunately, companies can overcome this disconnect. To start, they can determine where their products fall in a matrix with four categories: easy sells, sure failures, long hauls, and smash hits. Each has a different ratio of product improvement to change required from the consumer. Once businesses know where their products fit into this grid, they can manage the resistance to change. For some innovations, major behavior change is a given. In those cases, companies can either wait for consumers to warm to the product, make the improvement so great that buyers get past their apprehension, or try to eliminate the incumbent product. Firms can also try to minimize buyer resistance by making products that are compatible with incumbent goods, seeking out those who are not yet users of the existing product, or finding true believers.
Cover title. Revision of: Integrating mechanisms for marketing R&D. 1994. "October 1994."
Is the 80% product failure rate statistic actually true
- G Castellion
Castellion, G. 2012 "Is the 80% product failure rate statistic actually true"
http://www.quora.com/Product--Management/Is--the--80--product--failure--rate--statistic--actually--true
With Good Reason: An Introduction to Informal Fallacies
- S M Engel
Engel, S.M., With Good Reason: An Introduction to Informal Fallacies (Fifth Edition)
(St. Martin's, 1994), Boston, MA 223--25.
Findings from the PDMA research foundation CPAS benchmarking
- M Adams
Adams, M. (2004) "Findings from the PDMA Research
Foundation CPAS Benchmarking"
http://www.pdma.org/shop_pdma_description.cfm?pk_st
ore_product=25
24% for top
performers, 46% for
the rest of the sample
Fallacies: Classical and contemporary readings
- J. B. Freeman
Fallacies: Classical and Contemporary Readings University Park
- J B Freeman
Freeman, J. B. 1995 Fallacies: Classical and Contemporary Readings University Park,
PA The Pennsylvania State University Press, 265-73
- G A Stevens
- J Burley
Stevens, G.A. and Burley, J., 1997 "3,000 Raw Ideas = 1 Commercial
Success!" Research Technology Management 40, (3) 16--27.
80%
Many new products fizzle despite careful planning, publicity
- B Schorr
Schorr, B. (1961), "Many new products fizzle despite careful planning,
publicity", Wall Street Journal, April 5, p. 11.
89%
"Why do products fail?"
http://www.theproduct.com/marketing/product_failure.htm
85%
Fear of failure stifles product development
- H Schlossberg
Schlossberg, H. (1990), "Fear of failure stifles product development",
Marketing News, Vol. 24 No. 10, pp. 1--16.
95%
"Why Do New Products Fail?" University of North Texas.
http://courses.unt.edu/kt3650_4/sld003.htm
50--80%
I Think of My Failures as a Gift
- Karen Dillon
Dillon, Karen. 2011. "I Think of My Failures as a Gift." Harvard Business
Review. 88 (3).
80%
"External Innovation." Venadar.
http://www.venadar.com/what_we_do.html
80%
Top Ten Reasons for Business Failure
- Copernicus Marketing
- Consulting
- Research
Copernicus Marketing, Consulting and Research. 2010. "Top Ten
Reasons for Business Failure." GreenBook.
http://www.greenbook.org/marketing--research.cfm/top--10--reasons--for--new--product--failure
80--90%
Why are New Products Launched
- Rob Berman
Berman, Rob. 2010. "Why are New Products Launched?" Rob Berman's
Blog. http://www.rob--berman.com/why--are--new--products--launched--part--1--of--4/
81%
Why a High Failure Rate in Social Media?
- Scott Scanlon
Scanlon, Scott. "Why a High Failure Rate in Social Media?" You Brand,
Inc. http://www.youbrandinc.com/social--media/why--a--high--failure--rate--in--social--media/