Standards, Prediction models, Product design, New product development, Product management, Rapid prototyping, Innovation adoption, Consumer goods, and Marketing research
In many product categories, technological evolution results in the emergence of a single product design that achieves market dominance. In this article, the authors examine two questions: Will a dominant design emerge in a new product category? and If it does, how long will it be before a dominant design emerges? Thus, the authors simultaneously model the probability of emergence of a dominant design and the time of that emergence, conditional on its emergence. The model incorporates the effects of several product-market characteristics on the probability and time of dominant design emergence, including appropriability of the rents associated with the product, network effects, size of the product's value net, the standards-setting process, radicalness of innovation, and research-and-development intensity. The authors use data for 63 office products and consumer durables to estimate a split-population hazard model for the probability and time of emergence of the dominant design. They find that a dominant design is more likely to emerge with weak appropriability, weak network effects, low product radicalness, and high research-and-development intensity. Dominant designs that emerge are likely to emerge sooner in product categories in which there is weak appropriability, there are a large number of firms in the value net, the standards are set by a de facto process, and there is low product radicalness The proposed model can be used to predict both the probability and the time of the emergence of a dominant design in a new product category. [ABSTRACT FROM AUTHOR]
Journal of Marketing Research (JMR). Jun2012, Vol. 49 Issue 3, p349-360. 12p. 8 Charts, 1 Graph.
Marketing research, Product lines, Commercial products, New product development, Industrial research, and Rapid prototyping
The author examines conditions under which one firm's product line expansion can cause all firms to be more profitable in horizontally differentiated markets. Although a firm's profits might be expected to decrease when a competitor expands its product line because the firm loses some sales to the new product, this intuition is incomplete because a competitor's product line expansion can also soften price competition. The author first provides an example using the Hotelling model that demonstrates the possibility and mechanism of profit-increasing competitor entry. He then presents conditions under which a competitor's product line expansion increases profits under the mixed-logit model. The study demonstrates that firms benefit from a rival's entry most when a moderate number of customers are unserved before the new-product introduction and when the new product is positioned such that both the rivals' products appeal to similar sets of customers. With regard to extensions, this study demonstrates that the result continues to hold when firms choose product attributes endogenously and that a manufacturer's profits can increase from a rival's product line expansion even when the firms sell through a retailer. [ABSTRACT FROM AUTHOR]
Using data collected on new products presented to a major channel intermediary, the authors estimate logistic regression models to describe the intermediary's accept/reject decisions for those products. Re-suits indicate how different variables influence those decisions. The logistic model is shown to fit extremely well with excellent validation performance. Implications of these results for marketing strategies and for improving performance of the marketing system are discussed. [ABSTRACT FROM AUTHOR]
The article presents an editorial focusing on marketing questions relating to the introduction of new products. The author believes that in the past, there was little product choice. In the 1960s however, variety has brought up new questions for marketing personnel, namely when to enter a new product into the marketplace. He thinks that an evaluation period of about two and a half years is needed to truly get a good idea of how well a product might do in the grocery marketplace.