Market-oriented new product development of functional beverages

Strategic reviews of the Irish Food and Beverage Industry have consistently emphasised the need for food and beverage firms to improve their innovation and marketing capabilities, in order to maintain competitiveness in both domestic and overseas markets. In particular, the functional food and beverages market has been singled out as an extremely important emerging market, which Irish firms could benefit from through an increased technological and market orientation. Although health and wellness have been the most significant drivers of new product development (NPD) in recent years, failure rates for new functional foods and beverages have been reportedly high. In that context, researchers in the US, UK, Denmark and Ireland have reported a marked divergence between NPD practices within food and beverage firms and normative advice for successful product development. The high reported failure rates for new functional foods and beverages suggest a failure to manage customer knowledge effectively, as well as a lack of knowledge management between functional disciplines involved in the NPD process. This research explored the concept of managing customer knowledge at the early stages of the NPD process, and applied it to the development of a range of functional beverages, through the use of advanced concept optimisation research techniques, which provided for a more market-oriented approach to new food product development. A sequential exploratory research design strategy using mixed research methods was chosen for this study. First, the qualitative element of this research investigated customers’ choice motives for orange juice and soft drinks, and explored their attitudes and perceptions towards a range of new functional beverage concepts through a combination of 15 in-depth interviews and 3 focus groups. Second, the quantitative element of this research consisted of 3 conjoint-based questionnaires administered to 400 different customers in each study in order to model their purchase preferences for chilled nutrient-enriched and probiotic orange juices, and stimulant soft drinks. The in-depth interviews identified the key product design attributes that influenced customers’ choice motives for orange juice. The focus group discussions revealed that groups of customers were negative towards the addition of certain functional ingredients to natural foods and beverages. K-means cluster analysis was used to quantitatively identify segments of customers with similar preferences for chilled nutrient-enriched and probiotic orange juices, and stimulant soft drinks. Overall, advanced concept optimisation research methods facilitate the integration of the customer at the early stages of the NPD process, which promotes a multi-disciplinary approach to new food product design. This research illustrated how advanced concept optimisation research methods could contribute towards effective and efficient knowledge management in the new food product development process.

The Effect of Risk Sensitivity on Collaborative New Product Development in a Supply Chain

The increasing risks and costs of new product development require firms to collaborate with their supply chain partners in product management. In this paper, a supply chain model is proposed with one risk-neutral supplier and one risk-averse manufacturer. The manufacturer has an opportunity to enhance demand by developing a new product, but both the actual demand for new product and the supplier’s wholesale price are uncertain. The supplier has an incentive to share risks of new product development via an advance commitment to wholesale price for its own profit maximization. The effects of the manufacturer’s risk sensitivity on the players’ optimal strategies are analyzed and the trade-off between innovation incentives and pricing flexibility is investigated from the perspective of the supplier. The results highlight the significant role of risk sensitivity in collaborative new product development, and it is found that the manufacturer’s innovation level and retail price are always decreasing in the risk sensitivity, and the supplier prefers commitment to wholesale price only when the risk sensitivity is below a certain threshold.

Product innovation and the costs of energy-using product policies

Energy-using Products (EuPs) contribute significantly to the United Kingdom’s CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products (such as minimum performance standards, energy labelling, enhanced capital allowances, etc.) can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. While these policies can impose costs on the producers and consumers of these products in the short run, the process of product innovation may reduce the magnitude of these costs over time. If this is the case, then it is important that the impacts of innovation are taken into account in policy impact assessments. Previous studies have found considerable evidence of experience curve effects for EuP categories (e.g. refrigerators, televisions, etc.), with learning rates of around 20% for both average unit costs and average prices; similar to those found for energy supply technologies. Moreover, the decline in production costs has been accompanied by a significant improvement in the energy efficiency of EuPs. Building on these findings and the results of an empirical analysis of UK sales data for a range of product categories, this paper sets out an analytic framework for assessing the impact of EuP policy interventions on consumers and producers which takes explicit account of the product innovation process. The impact of the product innovation process can be seen in the continuous evolution of the energy class profiles of EuP categories over time; with higher energy classes (e.g. A, A+, etc.) entering the market and increasing their market share, while lower classes (e.g. E, F, etc.) lose share and then leave the market. Furthermore, the average prices of individual energy classes have declined over their respective lives, while new classes have typically entered the market at successively lower “launch prices”. Based on two underlying assumptions regarding the shapes of the “lifecycle profiles” for the relative sales and the relative average mark-ups of individual energy classes, a simple simulation model is developed that can replicate the observed market dynamics in terms of the evolution of market shares and average prices. The model is used to assess the effect of two alternative EuP policy interventions – a minimum energy performance standard and an energy-labelling scheme – on the average unit cost trajectory and the average price trajectory of a typical EuP category, and hence the financial impacts on producers and consumers.

Advertising new product categories to new geographical markets

Em um ambiente global dinâmico e competitivo, muitas empresas notam que constante desenvolvimento e lançamento de novos produtos são atividades-chave para seu crescimento e sobrevivência. Hoje, um dos maiores desafios enfrentados por tais empresas envolve saber como agir em um mundo em que tanto o escopo como a estrutura do ambiente competitivo estão em constante mudança, e em que reestruturações e mudanças de portfólio são centrais para as companhias que visam capitalizar com o crescimento global. Tanto o rápido ritmo de inovação tecnológica quando a crescente afluência de economias emergentes apresentam riscos e oportunidades para as empresas, o que torna importante não apenas que estas estejam atentas ao lançamento de produtos de última geração para mercados desenvolvidos: faz-se também necessário que saibam como lançar produtos antigos para novos mercados. Usando o mercado brasileiro como um exemplo, esta dissertação procurou estudar como multinacionais têm utilizado anúncios publicitários no lançamento, para novos mercados, de categorias e subcategorias de produtos já vendidas em outros países. Após uma revisão da literatura disponível, do desenvolvimento de proposições, e da avaliação destas através de três estudos de caso, foi possível verificar a existência de alguma linearidade entre os casos e a literatura estudada, incluindo: uma busca pela legitimação da categoria que precede àquela pela da marca; o uso de “especialistas” para a legitimação da categoria; o uso de apelos baseados em argumentos; e a divulgação de mais de uma característica de produto por anúncio. No entanto, dadas algumas discrepâncias entre o que foi observado nos casos e aquilo descrito na literatura consultada, também foi possível verificar que a maneira como os anúncios são feitos em diferentes lugares depende igualmente do cenário competitivo enfrentado pela empresa, bem como de variantes econômicas e culturais específicas da localidade em questão.

Integration in new product development: Case study in a large Brazilian high-technology company

Proficiency in management activities undertaken in product development processes is regarded as a key competitive advantage for companies, particularly for high-tech industrial firms, which benefit from the important competitiveness factor of launching products with a differentiated technological content. This paper's objective was to identify, through case study, practices for integration between the roles of R & D with others involved in product development in a large Brazilian company of industrial automation. The results suggest some management practices to improve the integration in new products development, such as the use of employees from marketing with knowledge and experience previously gained from R & D activities and uses the heavyweight product manager to solve synchronization problems between product and technology development. © Universidad Alberto Hurtado, Facultad de Economía y Negocios.

New product development in brazilian technology-based small and medium enterprises

This article examines new product development (NPD) in small and medium-sized Brazilian enterprises (SMEs) in two technology-based industries: medical devices and process control automation devices. A conceptual model that categorizes factors that contribute to the success of a new product was established. The data were collected from a sample of 62 Brazilian SMEs. The conceptual model was tested to examine the relationships between NPD practices and new product success. Data analysis reveals that new product success in medical device companies is related to organizational characteristics such as NPD proficiency and marketing skills; while in process control automation device companies, they deal in a large degree with product differentiation, innovation and capability to analyze the targeted market. Due to the relatively small sample size, caution should be exercised when interpreting the results.

Integration of R&D and new product development: case studies of Brazilian high-tech firms

One of the aspects that influence good performance of new product development (NPD) at high-tech companies is the integration of research and development (R&D) and the other functions involved with NPD. The objective of this paper is to examine why Brazilian medium and large sized high-tech companies are different with respect to the integration of R&D with NPD. An analysis of case studies was conducted at five Brazilian high-tech firms. Among the results, collectivism, which is characteristic of the Brazilian organisational culture, was seen to manifest itself in companies through the adoption of cross-functional teams; the valorisation of personal relations, which is stimulated by physical proximity; and project managers’ ample participation in different functions involving NPD.

New Product Portfolio Performance in Family Firms

This study investigates the relationship between top management team (TMT) innovation orientation and new product portfolio performance in small and medium-sized family firms by exploring two family firm-specific sources of TMT diversity as moderators: the number of generations involved in the TMT and the ratio of family members in the TMT. Results indicate that family-induced diversity in the TMT has opposing moderating effects. Although a positive relationship exists between TMT innovation orientation and new product portfolio performance when multiple generations are involved in the TMT, TMT innovation orientation and new product portfolio performance experience a negative relationship when the ratio of family members in the TMT is high. The study discusses theoretical and managerial implications of the findings and develops avenues for future research.

A study of new product market search and user adoption

The research was carried out in the Aviation Division of Dunlop Limited and was initiated as a search for more diverse uses for carbon/carbon composites. An assumed communication model of adoption was refined by introducing the concept of a two way search after making cross industry comparisons of supplier and consumer behaviour. This research has examined methods of searching for new uses for advanced technology materials. Two broad approaches were adopted. First, a case history approach investigated materials that had been in a similar oosition to carbon/carbon to see how other material producing firms had tackled the problem. Second, a questionnaire survey among industrialists examined: the role and identity of material decision makers in different sized firms; the effectiveness of various information sources and channels; and the material adoption habits of different industries. The effectiveness of selected information channels was further studied by monitoring the response to publicity given to carbon/carbon. A flow chart has been developed from the results of this research which should help any material producing firm that is contemplating the introduction of a new material to the world market. Further benefit to our understanding of the innovation and adoption of new materials would accrue from work in the followino areas: "micro" type case histories; understanding more fully the role of product champions or promoters; investigating the phase difference between incremental and radical type innovations for materials; examining the relationship between the adoption rate of new materials and the advance of technology; studying the development of cost per unit function methods for material selection; and reviewing the benefits that economy of scale studies can have on material developments. These are all suggested areas for further work.

Teamwork for product innovation in Taiwanese family firms:an indigenous psychology perspective: An indigenous psychology

As the existing team literature mostly excludes context and culture, little is known about how these elements affect real-life team working (Engestrom, 2008; Salas & Wildman, 2009), and how teams work in non-Western settings, such as in Chinese firms (Phan, Zhou, & Abrahamson, 2010).This research addresses this issue by investigating how new product design (NPD) teams use team working to carry out product innovation in the context of Chinese family businesses (CFBs) via an indigenous psychology perspective. Unlike mainstream teamwork literature which mostly employs an etic design, an indigenous psychology perspective adopts an emic approach which places emphasis on understanding real-life phenomena in context through a cultural-insider perspective (Kim, 2000). Compatible with this theoretical position, a multiple qualitative case study approach was used as the research methodology. Three qualitative case studies were carried out in three longstanding family-run manufacturing firms in Taiwan, where family firms have been the pillars of high economic growth in the past five decades (W.-w. Chu, 2009). Two salient findings were established across the three case studies. First, the team processes identified across the three family firms are very similar with the exception of owners’ involvement and on-the-job training. All three family firms’ NPD teams are managed in a highly hierarchical manner, with considerable emphasis placed on hierarchical ranking, cost-effectiveness, efficiency, practicability, and interpersonal harmony. Second, new products developed by CFBNPD teams are mostly incremental innovation or copycat innovation, while radical or original products are rare. In many ways, CFBNPD teams may not be the ideal incubators for innovation. This is because several aspects of their unique context can cast constraints on how they work and innovate, and thus limit the ratio of radical innovation. A multi-level review into the facilitators and inhibitors of creativity or innovation in CFBNPD teams is provided. The theoretical and practical implications of the findings and the limitations of the study are also addressed.

Success factors of product innovation:an updated meta-analysis

Assessing factors that predict new product success (NPS) holds critical importance for companies, as research shows that despite considerable new product investment, success rates are generally below 25%. Over the decades, meta-analytical attempts have been made to summarize empirical findings on NPS factors. However, market environment changes such as increased global competition, as well as methodological advancements in meta-analytical research, present a timely opportunity to augment their results. Hence, a key objective of this research is to provide an updated and extended meta-analytic investigation of the factors affecting NPS. Using Henard and Szymanski's meta-analysis as the most comprehensive recent summary of empirical findings, this study updates their findings by analyzing articles published from 1999 through 2011, the period following the original meta-analysis. Based on 233 empirical studies (from 204 manuscripts) on NPS, with a total 2618 effect sizes, this study also takes advantage of more recent methodological developments by re-calculating effects of the meta-analysis employing a random effects model. The study's scope broadens by including overlooked but important additional variables, notably “country culture,” and discusses substantive differences between the updated meta-analysis and its predecessor. Results reveal generally weaker effect sizes than those reported by Henard and Szymanski in 2001, and provide evolutionary evidence of decreased effects of common success factors over time. Moreover, culture emerges as an important moderating factor, weakening effect sizes for individualistic countries and strengthening effects for risk-averse countries, highlighting the importance of further investigating culture's role in product innovation studies, and of tracking changes of success factors of product innovations. Finally, a sharp increase since 1999 in studies investigating product and process characteristics identifies a significant shift in research interest in new product development success factors. The finding that the importance of success factors generally declines over time calls for new theoretical approaches to better capture the nature of new product development (NPD) success factors. One might speculate that the potential to create competitive advantages through an understanding of NPD success factors is reduced as knowledge of these factors becomes more widespread among managers. Results also imply that managers attempting to improve success rates of NPDs need to consider national culture as this factor exhibits a strong moderating effect: Working in varied cultural contexts will result in differing antecedents of successful new product ventures.

Improving marketing's contribution to new product development

In many firms, the marketing department plays a minor role in new product development (NPD). However, recent research demonstrates that marketing capabilities more strongly influence firm performance than other areas such as research and development. This finding underscores the importance of identifying relevant capabilities that can improve the position of marketing within the NPD process as part of the quest to improve innovation performance. However, thus far, it has remained unclear precisely how the marketing department can increase its influence on NPD to enhance a firm's innovation performance. The results of this study demonstrate that the relationship between marketing capabilities and innovation performance is generally mediated by the decision influence of marketing on NPD. In particular, both marketing research quality and the ability to translate customer needs into product characteristics serve to increase marketing's influence on NPD. This increased influence, in turn, positively contributes to overall firm innovation performance. Hence, these results show that in addition to having the appropriate marketing capabilities, the marketing department must achieve a status in which these capabilities can translate into performance implications.

The influence of organizational and national culture on new product performance

The authors conduct a meta-analysis on the combined influence of organizational and national culture on new product performance. For this purpose, they refer to the effectiveness of value congruency and develop a conceptual model describing the fit between organizational culture types as suggested by the competing values framework and national culture, as described by Hofstede's cultural dimensions. The meta-analysis is based on 489 effect sizes taken from 123 manuscripts. The findings show that organizations with a market culture show the highest new product performance, while hierarchy-type organizations show the lowest performance. The influence of national culture variables supports the effect of value congruency, and shows that in individualistic cultures the impact of a clan culture decreases, the impact of an adhocracy culture type decreases with uncertainty avoidance, and the influence of a hierarchy culture type increases with power distance. The superior effect of a market culture type can be matched by other organizational orientations, but in particular national cultures only. The combined findings underline the importance for firms that seek to improve the success rate of new products on international markets to consider the fit of a national culture with a firm's organizational culture.

SUPPLIER INVOLVEMENT IN NEW PRODUCT DEVELOPMENT: A CASE STUDY FROM THE SEMICONDUCTOR INDUSTRY

Global competition requires that the companies adapt themselves to technological changes rapidly, develop new products, reduce the cost, shorten the time to market, and increase the quality. In this context, supplier involvement in New Product Development (NPD) is determinant for a company to respond to the requirements of the increasingly dynamic markets. The main purpose of the paper is to demonstrate the importance of supplier involvement in NPD, buyer-supplier relationships and their effects on buyer’s NPD process, highlighting the benefits of supplier involvement, the barriers, the strategic aspects and industry aspects. These issues are addressed with a case study from the semiconductor industry. Besides helping to understand NPD in the semiconductor industry, the contribution and fi ndings of this work are clear: the results achieved confirm the findings of studies referred in the literature review, and confirm that the semiconductor industry sector requires a closer and more complex relationship structure with suppliers, given the specificities and challenges of the sector, such as rapid technological changes, permanent innovation, global competition, reduction of cost and time-to-market cycle, increased capacity, among other. The main contribution of the paper to the scientific literature and to managers is the better understanding of the buyer-supplier relationships in NPD in the semiconductor industry.