Impact Of New Product Introductions Research Articles

Blurred boundaries: A flexible approach for segmentation applied to the car market

Prominent features of differentiated product markets are segmentation and product proliferation blurring the boundaries between segments. I develop a tractable demand model, the Ordered Nested Logit, which allows for asymmetric substitution between segments. I apply the model to the automobile market where segments are ordered from small to luxury. I find that consumers, when substituting outside their vehicle segment, are more likely to switch to a neighboring segment. Accounting for such asymmetric substitution matters when evaluating the impact of new product introduction or the effect of subsidies on fuel‐efficient cars.

Changing food behaviors in a desirable direction

Affluent societies face several challenges involving the relationships between people and their food, including the rise of welfare diseases and the huge amount of food wasted. These problems are partly due to the operation of the market economy, in which companies develop products that cater to momentary desires of individual consumers. To tackle societal problems, we need to develop different approaches in line with people’s long-term goals and providing benefits to the community, the environment, and society. To achieve enduring changes in behavior, designers can create series of interventions that address all stages people typically go through. In addition, designers, companies and users should be prepared to share the responsibility associated with the potential impact of new product introductions.

Stock Market Reactions to New Product Launches in International Markets: The Moderating Role of Culture

Prior research indicates the importance of new product launches across international markets for firm performance. However, little is known about if, and how, new product launches in international markets drive firm financial value. This study examines the drivers of stock market reactions to a new product introduction in a foreign country, along with the moderating impact of cultural context. Using a sample of 1,154 products in 34 product categories launched in 48 countries between 2011 and 2018, the authors investigate how product characteristics such as product innovativeness and product type affect abnormal stock reactions to a new product launch event. Furthermore, the authors assess the role of the national culture by considering the individualism, uncertainty avoidance, and indulgence characteristics of the country where the new product is launched. Results of a mixed-effects estimation model indicate that product launches in international markets with innovativeness and hedonism characteristics positively affect firm value. The effects of culture are complex and multifarious, providing valuable insights regarding the impact of new product introductions in global markets on firm value.

The Impact of Technological Green New Product Introductions on Firm Profitability

With changing customer preferences and volatile economic-technological environments, firms have accelerated the rate of new product introductions (NPIs) to sustain corporate growth. However, NPIs have adverse impacts on the environment. But what do we know about the impact of technological green NPIs on firm profitability? Can technological green products help limit or off-set the negative impact of NPIs on the environment? Accelerating the number of NPIs imposes additional costs for firms as well as environmental costs, particularly with greater resource depletion and waste generation. A well-supported solution to reconcile the economic-environmental preservation imperative is to create incentives for firms to use green technologies to offset the negative impact of new products on the environment. Using data on 1020 technological green products which were introduced between 2007 and 2012 by 79 global firms, we investigate whether there are any win–win situations in terms of financial advantages for firms, while reducing the adverse impacts of NPIs on the environment. The results show that the relationship between technological green NPIs and firm profitability is positive. The findings point to the financial incentives for firms to leverage on green technologies to limit the environmental impact of new product introductions.

Blurred Boundaries: A Flexible Approach for Segmentation Applied to the Car Market

Prominent features of differentiated product markets are segmentation and product proliferation that blurs the boundaries between segments. I develop a tractable demand model,the Ordered Nested Logit, which allows for over lap between neighboring segments.I apply the model to the automobile market where segments are ordered from small to luxury. I find that consumers, when substituting outside their vehicle segment, are more likely to switch to a neighboring segment. Accounting for such a symmetric substitution matters when evaluating the impact of new product introduction or studying the effect of subsidies on fuel-efficient cars.

The Impact of New Product Introductions on Sales Management Strategy

This paper investigates how firms modify their sales management strategy when new products are added to the product line sold by their sales force. Comparisons are made between the sales management strategy options utilized by organizations prior to launching a new product or service and subsequent changes occurring in these elements as a result of launching the new product. Results indicate that organizations make a significant number of changes in all areas of the sales management mix. In comparing among these areas, organizations are most likely to change sales management mix elements related to quotas and least likely to make changes in sales organization structure.

The Impact of New Product Introduction on Plant Productivity in the North American Automotive Industry

Product launch—an event when a new product debuts for production in a plant—is an important phase in product development. But launches disrupt manufacturing operations, resulting in productivity losses. Using data from North American automotive plants from years 1999–2007, we estimate that a product launch entails an average productivity loss of 12%–15% at the plant level. This translates to a monetary loss of $42–$53 million per launch in lost productivity. We identify several ways to mitigate the decrease in productivity. Product (or mix) flexibility in the body shop is critical for reducing the productivity loss. A plant's past experiences with product launches as well as with manufacturing similar products (specifically, on the same platform as the launch product) temper the productivity losses even further. Nevertheless, there are subtle differences in the accrued learning with these two types of experiences: whereas the positive impact of platform experience persists over time, the learning accrued with launching other products in the same plant decays more quickly. Altogether, our results suggest that launching products at a flexible plant with appropriate platform experience could recover approximately $31 million per launch in lost productivity. This paper was accepted by Kamalini Ramdas, entepreneurship and innovation.

The impact of new product introduction on supply chain ability to match supply and demand

Supply chain managers should redesign their supply chains in response to the introduction of a new product. In particular, to reach performance targets, they should align the supply chain to the new product features. The objective of this paper is to highlight the negative effects of mis-alignment between product features and supply chains and to propose a set of misalignment indicators, along with an action plan to align supply chains to new products. To this end, an in-depth case study has been performed. In the analyzed company the introduction of a new product line was not followed by a proper redesign of the logistics network, thus reducing supply chain performance. The mis-alignment has been evaluated against a new indicator. Moreover, the main product features that should have been taken into account when redesigning the network, i.e. internal and external variety, and innovativeness, have been highlighted. Finally, a two steps methodology to define a set of coordinated action between product development department and supply chain mangers have been proposed. Keywords: Variety; Alignment; Supply Chain; New Product Introduction International Journal of Engineering, Science and Technology, Vol. 2, No. 9, 2010, pp. 83-93

The Impact of New Product Introduction on Plant Productivity in the North American Automotive Industry

Product launch - an event when a new product debuts for production in a plant - is an important phase in product development. But launches disrupt manufacturing operations resulting in productivity losses. Using data from North-American automotive plants from years 1999-2007, we estimate that a product launch entails an average productivity loss of 12-15% at the plant level. This translates to a monetary loss of $42-53 million per launch in lost productivity. We identify several ways to mitigate the decrease in productivity. Product (or mix) flexibility in the body shop is critical for reducing the productivity loss. A plant's past experiences with product launches as well as with manufacturing similar products (specifically, on the same platform as the launch product) temper the productivity losses even further. Nevertheless, there are subtle differences in the accrued learning with these two types of experiences: whereas the positive impact of platform-experience persists over time, the learning accrued with launching other products in the same plant decays more quickly. Altogether, our results suggest that launching products at a flexible plant with appropriate platform experience could recover approximately $31 million per launch in lost productivity.

The Immediate Impact of New Product Introductions on Stock Price: The Role of Firm Resources and Size*

New product development and introduction is an ongoing important issue to facilitate a firm's success. To demonstrate the financial impact of new product introductions and the supporting role of firm resources and organizational structure, the authors collected 409 new product announcements from 1990 to 1998 and used event methodology and regression models in this research. Building on resources and capabilities perspectives, the present study argues that firm resources with emphases on research and development (R&D) are imperative to materialize new product concepts. However, the research revealed that R&D resources have dual effects on immediate shareholder value (i.e., abnormal stock returns). On one hand, when the firm commits only lower to moderate levels of R&D, investors would have perceived such R&D as expenditures reducing the firm's profit margin and thereby negatively evaluate R&D resources. Nevertheless, when the firm has dedicated its resources to R&D significant enough to signal investors its potential benefits can outweigh its costs, it generates positive shareholder value. Further, the study found that investors honor positive marketing resources that are critical to promote and launch new products to customers. Apart from resources perspectives, according to the organizational structure literature, firm size reflects the layers of bureaucracy within an organization. The research found a negative effect on shareholder value, indicating that investors evaluate more optimistically smaller firms that are likely to be more innovative and entrepreneurial resulted in more breakthrough products. In conclusion, this study provides value to practitioners in understanding the impact of firm size and, more importantly, to what extent they dedicate their resources in R&D and marketing to generate different performance outcomes.

Organizational Form and the Economic Impact of Corporate New Product Strategies

Abstract: This paper examines the role of organizational form in explaining the economic impact of corporate new product strategies. I find that the wealth effects associated with the announcements of new product introductions are more favorable for introducing firms with focused activities than for those with diversified activities. The results hold even after controlling for other factors suggested in the literature that could affect the value of new product introductions. The findings in this study suggest that the efficient investment hypothesis dominates the internal capital markets hypothesis in terms of the net economic impact of new product introductions on the introducing firms.

A generic framework for analysing product cannibalisation

This paper contributes a generic framework for analysing product cannibalisation. Although the factors affecting product cannibalisation in mature product portfolios have been well studied, issues regarding the performance of a new product and its impact on an existing product portfolio have not been addressed in the context of cannibalisation. Since it is critical to be able to estimate the impact of a new product on other products in the product portfolio, this paper presents a descriptive model to discuss the issues associated with product cannibalisation, specifically the impact of new product introduction on an existing product portfolio. The product portfolio model and different quantitative measures that can be used to understand the impact of new product introduction are discussed, along with a case study to illustrate the cannibalisation indicators developed in this research. This model can then be used along with quantitative methods in strategic decision-making regarding the introduction of new...

The Long-Term Impact of New-Product Introductions and Promotions on Financial Performance and Firm Value

Year after year, managers strive to improve financial performance and firm value by marketing actions such as new product introductions and promotional incentives. The current study investigates the short-term and long-term impact of such marketing actions on financial metrics, including top-line, bottom-line and stock market performance. While product introductions increase long-term financial performance and firm value, promotions do not. Managers may use these results to justify product innovation efforts and to weight short-term and long-term consequences of promotional incentives.

The impact of new product introductions on the market value of firms

Innovations in the economic system do not as a rule take place in such a way that first new wants arise spontaneously in consumers and then the productive apparatus swings round through their pressure. We do not deny the process of this nexus. It is, however, the producer who as a rule initiates economic change, and consumers are educated by him if necessary; they are, as it were, taught to want new things, or things which differ in some respect or other from those which they have been in the habit of using. [Joseph A. Schumpeter, 1934, p. 65] Although many mechanisms exist for the evaluation of new products, none have specifically examined the role that financial markets can play in measuring the impact of new products on firms. Using traditional event-study methodology, the present research provides a financial market-based analysis of the impact of new product introductions on the market value of firms. * This research was supported, in part, by the Marketing Science Institute, Cambridge, Massachusetts. Additional support was received from the Dean's Fund for Faculty Research at the Owen Graduate School of Management and the University Research Council, Vanderbilt University. Comments received from participants at seminars at the 1987 Marketing Science Conference in Jouy-en-Josas, France, Carnegie Mellon University, Cornell University, State University of New York at Buffalo, University of Michigan, Northwestern University, University of Rochester, University of Toronto, and Washington University are gratefully acknowledged as is the research assistance of David Livert, Russell Covey, Debra Jeter, Athena Lee, and Guy Lever and secretarial assistance of Cordy Cates and Patricia James. We further wish to thank Merrill Brenner, two anonymous referees, and the editor for helpful comments on a prior version of this article.

The Impact of New Product Introductions on the Market Value of Firms

Although many mechanisms exist for the evaluation of new products, none have specifically examined the role that financial markets can play in measuring the impact of new products on firms. Using traditional event-study methodology, the present research provides a financial market-based analysis of the impact of new product introductions on the market value of firms. Copyright 1991 by University of Chicago Press.

Use of computers in ICL for short and long-term sales projections

ICL makes extensive use of its own computers in the conduct of its business, and within Sales Group, two main applications are undertaken: 1. 1. A comprehensive system of reporting by salesmen is employed to monitor the progress of sales negotiations and the proper short-term forecasts of sales achievements. These forecasts are based on statistical techniques rather than salesmen's expectations. The information obtained from the reporting and forecasting system is used to: 1.1. a. monitor the sufficiency of salesman activity; 1.2. b. contribute to the requisition of equipment production facilities prior to orders being received; 1.3. c. maintain records of competitive activity yielding comprehensive market share data; 1.4. d. from analyses of sales successes and losses, provide input to long-range product planning. 2. 2. A computer model of an interactive nature has been developed which allows a senior executive from a teletype terminal to obtain long-range forecasts (up to 10 years) and likely sales based on “Source of Business”. The model allows the examination of alternative sales strategies related to markets, support and customer development expenditure, and yields information relevant to the planning of staff deployment, the impact of new product introduction, decreasing competitiveness with product ageing as well as the effect of competitive announcements.