The Effect Of New Product Development Marketing Essay
The success of new products in the market is critical to the continued success of any firms. Therefore, the increase in the economys impact on the business world in order to develop new products (NPD) such consistent with the progress of events NPD, examine by presenting an overview of a number of current issues, NPD and factors that lead to successful NPD, NPD practices to the industry. The concept related to the NPD is designed as a simple set of guidelines for use by managers and organizations to increase the success rate of new products. The paper reflect the perspective of interest to the literature review suggests that the moderating effect of order of market entry on the mediated relationship between new product development resource and new product performance via two mediated order which first, interaction between cross functional integration and marketing strategy development and second, product quality and innovation speed.
Keywords: New product development resources, Cross functional integration,
Marketing strategy development, Order of market entry
Tools for growing and profitability for most firms is new product's development. Thus, Ability to manage the product-development process is the firm's new-product success which depends on firm’s ability that in the use of a scarce resource (Cohen, Eliashberg, and Ho, 2000). New product development (NPD) is often cited as the key to sustainable competitive advantage which new products are often set targets higher by the executive. This reason, the development of products will affect using of resources. Many firms who want to develop new products, but they had problem that the allocation of the available resources are poor. However, it is a risk between resource usage and successful new product development that using resources available inappropriately may also suffer a failure as well (Kavadias, and Chao, 2007). Additionally, many scholars and practitioners interested new product development problems which trying to present amount of solutions, tools, and theories to development by chosen different (Shane and Ulrich 2004). Considering based resource problem is the important issue that different resource allocation. Thus, NPD is a crucial factor in the long-term success of firms while job important for resolve above issue are the appropriate way as development, resources allocation (tangible and intangible) to responses performance (Perkins and Khurana, 2002).
Under the present situations, customers consider quality products, however, same time they look speed as values that more responsive the dynamic environment and the challenging for producers who continue to develop a marketing strategy. Especially, the competition is becoming more globally. Following, marketing is going to a rapidly developing process paradigm and the concept of integrated development which one of a powerful tool to determine the success of new product. According to organizational development are more likely who have expertise in marketing field to also dedicate the resources. Therefore, both to reducing production time and improving value of products are under the resources that participation in product development is successfully integration, which depend on the way to collaboration and product development activities. Furthermore, an integrated product team formed by staff as differently departments to support the development and the transformed into new products that these teams have a mechanism to support the product, hence, involvement is affecting based the a new product quality within limited resources and time (Maidique and Jo 1984). Efficiently integrations are links to the resources available high levels of a new product development that the effect of the interaction between cross-functional integration and new product development which leading to stronger performance of new products better which firm (Leenders, and Wierenga, 2008).
This paper, develop a framework to important for the development approach of new product development resources effect to new product performance which problems about “how the order of market entry influences to the mediators?” that considering mediators as the interaction between cross functional integration and marketing strategy development through speed or quality.
2. LITERATURE REVIEW AND CONCEPTUAL-FRAMEWORK
2.1 THEORETICAL FOUNDATION
The Resource base view (RBV) of firms consider a variety of traditional resource firms, that is the foundation of explain firm's operations that (Barney, 1991) focus on resource links to directly firm and developing to a contingency theory of organizations (Ketchen et al., 2007). Accordance with the guidelines suggests that even firm has resources owned as valuable strategy may be useful. Nevertheless, firm must be able to deploy these resources which on a matches form the market situation where they faced (Morgan et al., 2009) creating in bind to RBV approach. Consequently, the propose model to moderated-mediation relationship between NPD resource and NP performance. This paper base framework of Day and Wensley (1988) source–position–performance framework is explain which once their superior skills and resources (source) that will be used to production of strategic advantages positioning (position), as a result, efficiency business higher than the competitors. Throughout, this paper applies the framework to of integrating team new product performance problem as a useful concept to predict and explained the innovation process (e.g., Han, Kim, and Srivastava, 1998; Song and Parry, 1997a). An argument, this is environmental factors acting as the main source of team integration which environmental factor is the condition of the organization to work of team immediately, as depending on conditions to a strong increasing, facilitate competition, and competitive position scope. With regard to the result of the integration use a wide variety of skills and knowledge within the team, for a good performance is creating a better product or the advantages of new product performance as better quality products, superior technology, time advantages, cost advantages, and alternative offer (e.g., Cooper, 1979; Day and Wensley, 1988; Porter, 1985). Thereby, this reflected through benefits is superior products which market outcomes and financial objectives. Fundamental argument for using cross-functional NPD teams is functions that increase a wide variety and diversity of information available to team members. This is expanded team members understanding of problem with product development and potential solution like an ability to add solving complex problems (Milliken and Martins, 1996). Therefore, the integration is expected to working across party lines such in order to benefit much more. However, based on resource dependency theory explain interdependent nature of work and cross collaboration (Pfeffer and Salancik, 1978). Also, nature of the task and responding of the team shows that different according to the level of uncertainty perceptual information sharing involved with a variety of functions in all development activities which may be opportunities for integrating a variety of information and perspectives (Xie, Song, and Stringfellow, 1998).
In addition, cross-functional integration, marketing strategy is a powerful tool for determining the success of the product as well (Maidique and Zirger, 1984). With regard to the implementation of appropriate marketing strategies, it is critical to the overall success of new products. Previous studies have found that the marketing strategy is an important and positive effect on the performance of the new products project (Ramaseshan et al., 2002). The important mechanism is firm successfully will be enhanced new product by innovation speed and product quality (Paladino, 2008) that pointed out to firm with superior products highest quality, because they understand customers’ needs than competitors, in addition, they are applicable strategy to wider market environment. That is important to help NPD team when the relevant market is acting more quickly. In order that identify the order in which they are enter the market: first-to-market, early entrant, and late entrant, (Robinson, Fornell, and Sullivan, 1992) however, this distinction is important because the product will enter the market as one of the pioneers that faced with challenges and different market conditions. For example, the true pioneer not has competed directly, but it will compete with the other products that are already present in the same product category and substitute’s product of the same market and barriers faced by potential entrants others. Otherwise, the early entrants are facing with competition by products in market that likewise, the early entrant face different market conditions than the new entrants who into the market late as start of the product life cycle (Agarwal and Bayus, 2004; Robinson et al., 1992).
CONCEPTUAL MODEL OF THE EFFECT OF
NEW PRODUCT DEVELOPMENT RESOURCES ON NEW PRODUCT PERFORMANCE:
THE CRITICAL ROLE OF ORDER OF MARKET ENTRY INFLUENCES MEDIATORS
Order of marketing entry
Cross functional integration
New Product Development (NPD) Resources
New Product Performance
Marketing Strategy development
2.2 NPD RESOURCE
NPD resources define as tangible and intangible asset which they used for the development and implementation of new products which both on the production and the marketing that has positively affected on new product performance (Day, 1994). Many firms dedicate a great deal of effort to resources manage performance of NPD that important task is resource allocation and dynamically allocation of resources and direction of the project. The important recent development has moved away from viewing the NPD is trying to be creative. Therefore, the structure for each of project is important, especially, in the case of human resources who they are often a key constraint that critical in process development and the efficient allocation that there is affect the success of the NPD (Perkins and Khurana, 2002).
2.3 CREOSSFUNCTIONAL INTEGRATION
Cross functional integration in new product development (NPD), project team defines to the importance of interaction and communication with the level of coordination and information sharing, and the scope of participation interaction between functionality in a specific NPD (Pinto et al., 1993).
The advantages of cross functional integration have been recognized as information flow that to increase the flexibility in the organizational labor, capital resources, and take advantage of the organizational growing. However, cross functional integration can also increase the complexity and confusion in the decision. Therefore, the appropriate is project integration can assign to a temporary member that order to new products team of various functionality can be integrated as a part or even all levels of the organization. Finally, cross functional integration can affect the various forms success of new products as well as new products (such as a competitive advantage as unique quality), market results (such as market share, profits) and production results (such as cycle time, superior production) (Troy, Hirunyawipada, and Paswan, 2008).
MARKARKETING STRATEGY DEVELOPMENT
Marketing strategy is a powerful tool in determining the product success. The study by Maidique and Zirger (1984) concluded that the new products successes are more likely to develop on market expertise and resources commitment to selling, promoting, and product. Ramaseshan et al. (2002) suggests that, while the marketing strategy implement to achieved, that it is important to use appropriate marketing strategy is critical to success. Overall, the study also found that marketing strategy with resulted positive in new product performance. Again, appears that appropriate marketing strategy is very critical for new product performance and success.
2.5 NPD RESOURCES AND CROSS FUNCTIONAL INTEGRATION
Lawrence and Lorsch (1967) suggest the necessity both integration and differentiation (resource specific). In fact, organizational expertise alone is not sufficient for high performance (Madhavan &Grover, 1998). Generally, it is clear that firm need resources that integration known lead to more creativity among employees to be use of marketing idea, which leads to a greater potential as well as other possible and more effective ideas (Postrel, 2002). Also, it can lead to integration without order to the more effective use of resources and more effective as it can be reduce marketing coordination problem (Griffin & Hauser, 1996).
Proposition 1: NPD resource associated with decision making cross functional integration
NPD RESOURCE AND MARKETING DEVELOPMENT STRATEGY
Determining market (such as an attempt to customer relationships strengthen) and without the need to complete of products range in the some products market as well older cheaper products and innovation many years ago, found that success in new markets is often dependent on sales, expertise, and a full range of products support in a particular category that reload this emphasis need to focus within a limited range Teece (1980). Major achievement a narrow scope of firms is benefit from the strength of the market. Firm narrowly focus on innovation is driven by the customer who the knowledge and participation will be achieved by the process and the coordination of activities, for the example, decisions related to the selection of key products to key market segments, characteristics of the product packaging, and launch and product lifecycle management. That all play a key role for these firms such as knowledge is likely to find it on an efficient way, because the tracks to strong on their market (Gatignon and Xuereb, 1997).
If managed adequately, important strategic advantages for firm focus on with wider scope than strategic. The study mentioned above, where it is suggests that strategy scope is generally more successful; therefore, it is impossible to determine:
Proposition 2: NPD resource associated with decision making marketing development strategy
INTERACTION BETWEEN CROSS FUNCTIONAL INTEGRATION AND MARKETING STRATEGY DEVELOPMENT
There is consensus that the performance of cross functional teams, it is important to be a critical success factor which including strategic alignment integration that aims to be useful in practice, and facilitate cross functional new product development teams (Holland, Gaston, and gomes, 2002). Cross functional integration is the combination of the interaction of individuals and the strategic level based on the production and marketing integration which products strategies to manage demand of forecasting process (Paiva and Gavronski, 2009). However, cross functional team development return to interface to marketing integration of most important areas for sales (Kaj Storbacka, 2009).
The study by Robinson (1988) and Robinson and Fornell (1985) suggest that The company is a pioneer or first mover success in both consumer and marketing tend to offering high quality products. The development of high-quality products are likely to reduce the resistance of customers to switch from old formats to new product (Guiltinan, 1999). The quality of the product also contributes to customer loyalty, which served as barriers to competition that one reason, buyers to tried the product and find that it works well. Literature attributes the pioneer brand advantage (such as brand awareness highly is more opportunities that the product will be part of the consumer or as a reference for the product as brand reputation category, and a positive attitude on the part of consumers and retail buyers) have pioneered products implemented as satisfactory (Alpert and Kamins, 1994). However, innovation speed is not important because quality of the product is a first for movement as the purpose of the first-to-market. The strategy is products development that unique and innovation which often entails creating or acquiring new knowledge (Garrett, Covin and Slevin, 2009). In addition uncertainty surrounding the technology and market development of the first product to market, the company is likely to spend a lot of time in the research and development stage of innovation (Mansfield, Schwarts, and Wagner, 1981).
Research results indicate that the performance of the firm only. First-to-market has performs failed better than their competitors were the time required to develop new products. For these firms try to shorten time to development of a quality product without damaging the cost of development may represent a particularly difficult challenge (Sheremata, 2000). Because of first movers main focus seems to be products high quality more than innovation speed that will increase the chances of success for first-to-market. Thus, we propose that for the first product on the market with a quality is product more important than innovation speed more intervening variables in the relationship between NPD resource and NP performance.
Proposition 3: On first-to-market products, the quality of the product will have a stronger mediating effect than innovation speed on the relationship between the interaction (cross functional integration and marketing strategy development) and NP performance.
Most of called “first-mover advantage such as preemption of scarce assets of the acquired version of the influential pioneers satisfaction processes as learning consumer is temporary as they distributed on competition (Brown and Lattin, 1994; Huff and Robinson, 1994). Firm early entrant the market after the first mover has the opportunity to benefit from some of the advantages associated on the first entry (Lieberman and Montgomery, 1988; Varadarajan, Yadav and Shankar, 2008). For example, the following first-mover enjoy more opportunities to participate in setting standards for products built a reputation as a market leader and create switching costs before other competitors to enter the market (Brown and Lattin, 1994; Carpenter and Nakamoto, 1989).
Then it follows that the NPD resources on innovation speed in order to reduce duration of the acceleration. During the early entrant is the only brand in the market that increases the likelihood of successful competitors in early. Thus, from the previous discussion, the paper proposes the following:
Proposition 4: On early entrants, innovation speed of the product will have a stronger mediating effect than product quality on the relationship between the interaction (cross functional integration and marketing strategy development) and NP performance.
Research found that Late entrant can be reduced market share due to their focus on the consumer to achieve a higher setting (Vakratsas et al., 2003). There are two reasons that support is argument as the first into of late entrant may not be able to many serve (Vakratsas et al., 2003). Second, due to the exposure of the product by late movers are less likely to be recalled than its competitors previously (Bowman and Gatignon, 1996). Therefore, recommend that the late entrant should have a strong incentive to maximize value of consumer relationships, for entrant users to set up relationship that can be done to improve on the position of the previously. This point, the overall emphasis on the quality and innovation of the products offered late entrant. In contrast, the innovation speed seems to have little effect on the early success of late entrant competition (Shamsie, Phelps, and Kuperman, 2004).
From previously discussion, we argue that the interests of the NPD resource for late entrant who users should base the product of high quality rather than accelerating time to market. Thus, we propose that for the late entrant product quality would be more important than innovation speed the relationship between NPD resource and NP performance.
Proposition 5: On late entrants, product quality of the product will have a stronger mediating effect than innovation speed on the relationship between the interaction (cross functional integration and marketing strategy development) and NP performance.
CONCLUSION AND SUGGESTION
This paper is contributions in future research which proving that fruitful that the basic logic of the proposition about moderating effect of order of entry into the market will depend on the relative factors importance. Although, the practice of deriving as this proposition is often used to the literature, we believe that provide useful insights for the proposed moderating effect. Another interesting research guideline may be to examine the types of activities that are most effective on the time to market is different. For example, the ability to test the market may be an important mediator of the relationship that it should be aligned with business strategies as consistency or inconsistency which between business strategy and in order market entry to affect the performance, in other words, the firm should be pursuing a strategy. This paper makes an important contribution to the literature that examines the role and form of the order of entry into the market of the host from mediating (Interaction between cross functional integration and marketing strategy development as well as products quality and innovative speed) relationship between NPD resource and NP.
The paper has several implications for managers in marketing, strategy, product development and for consultants who are working to improve the firm's new products. Additional functions is required on the role of marketing interface affecting the new products performance, especially, how to perform the role of the order of entering the market which stimulating effect the product quality and innovation speed relative to the performance, on this paper can be extended to different industries.
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