New product myopia

Abstract

In a market economy, developing and introducing new products is essential for firms' survival. Yet new products are "high-risk endeavors" (Cooper and Kleinschmidt, 1987, p. 170), since many of these new products ultimately fail in the marketplace resulting in massive financial losses (Urban and Hauser, 1993). Previous research has concluded that industrial new product outcomes are within managers' control (Calantone and di Benedetto, 1990;Cooper, 1979;Cooper and Kleinschmidt, 1987). Further, over the past three decades, over 75 articles and books have focussed on understanding the determinants of new product success and failure (Griffin and Page, 1993) in the hopes of reducing failure in the marketplace. Unfortunately, the failure rate for new products has not been reduced significantly (Power et al., 1993;Wind and Mahajan, 1988). During the 1980s, companies eliminated many inefficiencies but, as Yoram Wind stated recently in Business Week, "[new product development] is one of the few areas left with the greatest potential for improvement" (Power et al., 1993, p. 77).Typically, the new product development (NPD) process is depicted as a set of activities, from idea generation to product launch, which are necessary to introduce a product into the market. Past research has greatly enhanced our understanding of the determinants of new product success or failure. However, few studies have explored how the proficiency with which the NPD activities are conducted impacts on the level of success (Cooper and Kleinschmidt, 1986;Dwyer and Mellor, 1991a).This study further explores how the proficiency with which the various categories of NPD activities are conducted determines the level of success of new industrial products. Unlike most of the previous research on new products which is cross-sectional, this study uses multiple statistical techniques to analyze two separate new product studies which were conducted over 12 years apart. Both studies asked the same questions and used the same measurement scales. This study offers insights into the longterm stability of the findings, and may provide convergent validity over time. Research hypothesesOne of the most comprehensive studies on new product success and failure is the original Project NewProd study (Cooper, 1979). In Project NewProd, 12 activities were conceived as comprising the NPD process. These activities are: initial screening, preliminary market assessment, preliminary technical assessment, detailed market study, financial analysis, product

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