Abstract
Market knowledge is recognised as an important predictor of new product performance, which existing studies have proven. However, a missing link in this relationship is creativity, and specifically, as a natural process in product innovation. This study aims to examine a model that includes two mediating mechanisms between market knowledge scope and two new product outcomes, respectively: a new product’s competitive advantage and its commercial success. In both cases two mediators are used that represent dimensions of creativity—i.e. a product’s meaningfulness and novelty. The model was tested on a sample of 374 Polish medium-high- and high-technology companies using structural equation modelling. The results indicated that market knowledge is transferred to both new product outcomes through new product creativity, albeit somewhat differently. The first mediating mechanism, which explains the factor of competitive advantage, operates only through the indirect effects of both the product’s meaningfulness and its novelty. The second mechanism works directly, through the market knowledge’s effect on commercial success, as well as indirectly, through product meaningfulness. Subsequently, theoretical and managerial implications as well as indications for future research are provided based on these findings.
Highlights
New product development (NPD) is a crucial area for any company due to customers’ increasing needs, intense competition, and technology development (Crawford & Di Benedetto, 2011)
According to Anderson and Gerbing (1988), a measurement model must be tested before evaluating the conceptual model; we used a confirmatory factor analysis (CFA) involving the five constructs listed in the Appendix, Table A1
Market knowledge in the first mediation, in which the focal endogenous variable is the product’s competitive advantage, transfers to this outcome only through the indirect effects created by both dimensions of new product creativity: its novelty and meaningfulness
Summary
New product development (NPD) is a crucial area for any company due to customers’ increasing needs, intense competition, and technology development (Crawford & Di Benedetto, 2011). According to a recent survey from the Product Development and Management Association, companies spend approximately 12 per cent of sales on NPD – a large amount – 39 per cent of launched. Journal of Business Economics and Management, 2019, 20(6): 1168–1188 products still fail (Lee & Markham, 2016). This is because several uncertainties emerge when developing new products. This study can be included among studies on knowledge – NPD performance, as it concentrates on market knowledge scope – or the breadth and depth of knowledge about customers, competitors and other market aspects – as a crucial predictor of performance
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