Despite the importance of branding to new product success, little research has been conducted on how individual adoption orientation might affect brand name preferences. This paper draws on the diffusion literature to investigate how consumer innovativeness affects consumer response to alternative branding strategies (i.e., new vs. extended brands, for new products). The results of an empirical study found that consumer innovativeness has a greater effect on new product evaluations for new brand names relative to extended brand names. Also, results indicate that highly innovative consumers evaluate new products with new brand names more favorably than brand extensions. Furthermore, consumer confidence in the new product was found to mediate the effects of consumer innovativeness and its interaction with brand name type on new product evaluation. Implications include not only giving greater managerial consideration to using new brands but also supporting the chosen branding strategy with appropriate promotional efforts for respective adopter groups.
Sellers often customize their product offerings in order to increase the value offered to individual buyers and gain a competitive advantage over the seller's competitors. However, such customization has a downside—it usually requires considerable seller‐buyer interactions aimed at matching the seller's technological capabilities with the buyer's needs, which can pose exchange risks such as the safeguarding and adaptation problems noted in the transaction cost analysis literature. In the present study, we develop a contingency model to investigate the impact of product customization on sellers' perceived relationship satisfaction and subsequent expectations of relationship continuity. We draw on the logic of transaction cost analysis to hypothesize that product customization's effect on satisfaction and continuity may be moderated by three activities that sellers may engage in during the new product development (NPD) process: education, product knowledge generation, and joint new product development. Our substantive hypotheses were tested with data from a national survey of 296 small to medium size firms in several high‐tech industries using a series of hierarchical OLS regression models. Overall, we found mixed support for our hypotheses. The results indicated that joint new product development reduced the negative effect of product customization on seller satisfaction and enhanced customization's positive effect on continuity, as expected. Contrary to our expectations, product knowledge generation activities increased the negative effect of customization on satisfaction; it also had no significant moderating impact on continuity. Buyer education activities were found to reduce the negative impact of customization on satisfaction, but showed no moderating effect on continuity. This study offers important theoretical and managerial implications. It is one of the first to rely on transaction cost analysis as a basis for examining how various relationship activities conducted during the new product development process moderate product customization's effect on qualitative outcomes. Whereas traditional NPD processes have emphasized unilateral approaches to product development, our study provides evidence of how bilateral approaches to NPD can benefit sellers of innovations. We provide new insights for managers to consider when deciding whether to engage buyers early on and then continue interacting with them throughout the product development process when developing customized products.
Ineffective relationship management with potential buyers during new product development (NPD) can be an important contributor to new product failure in technology-based, industrial markets. However, empirical research on managing these relationships remains underdeveloped. This study addresses this deficiency by developing an empirically based taxonomy of relationship approaches used by sellers to develop technology-based, industrial innovations, identifying situational characteristics that correlate with the choice of a particular relationship approach, and evaluating sellers' satisfaction with their relationship approach. The study's conceptual model is rooted in transaction cost analysis (TCA) and draws from extant literature on seller-buyer relationships during NPD. It was tested with data from 334 small to mid-sized firms in a variety of technology-based industrial markets. The results indicate that sellers use three basic relationship approaches during NPD: a bilateral approach, a buyer-guided approach, and a seller-guided approach. While the bilateral approach relies on a mutual exchange of information, the buyer-guided and seller-guided approaches do not. Juxtaposed with the high levels of satisfaction experienced by sellers in the sample, the study suggests that no one relationship approach is universally desirable. Therefore, managers may need to engage in a portfolio of relationship approaches with buyers during NPD; further, these approaches should correlate with buyer-related (i.e., perceived buyer knowledge and prior relationship history) and innovation-related (i.e., product customization and technological uncertainty) characteristics. Collectively, these results can help sellers optimize their relationships with buyers during NPD.
Service learning-a pedagogical technique combining academic learning with community service-offers many benefits to students, faculty, educational institutions, and the community. Relative to social sciences and liberal arts faculty, however, business faculty have been slow to incorporate it into their coursework. Service learning may be particularly relevant to marketing courses, given marketing's interest in social causes. At the same time, implementing service learning into the Principles of Marketing course may be challenging because of students' limited marketing background. This article addresses the implementation of service learning in the Principles of Marketing course. Based on the authors' experience, the article recommends an approach to effectively implement a service-learning component into the introductory marketing course. The authors also provide an assessment of outcomes from their approach, critical success factors for instructors who wish to alter this approach, and key challenges as we move forward with service learning in the Principles of Marketing course.
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