Customer interactivity and new product performance: Moderating effects of product newness and product embeddedness

Abstract Understanding customer needs which drive significant product innovation is particularly challenging for new product development (NPD) organizations. Research has addressed how organizations benefit from interacting with customers, but more conceptualization is needed into the dimensions of the customer interaction process. In a business-to-business (B2B) setting, customer interactivity is conceptualized as a multi-dimensional construct consisting of bidirectional communications, participation, and joint problem solving during NPD projects. Drawing upon organizational information processing theory, customer interactivity is hypothesized to be positively related to customer information quality when developing highly innovative products, but not when developing modifications or extensions of existing products. Another condition affecting this relationship studied is the embeddedness of the new product in the customer's business environment. Customer interactivity is hypothesized to be positively related to information quality for highly embedded product, but not for low embedded product. Results from a sample of NPD organizations in several B2B industries support these hypotheses. The study contributes to the marketing literature and practice by identifying important dimensions of the customer interaction process which lead to more proactive organizations, and identifying two moderating conditions of the customer interactivity and NPD performance relationship.

[1]  K. Atuahene–Gima,et al.  An exploratory analysis of the impact of market orientation on new product performance a contingency approach , 1995 .

[2]  Eric von Hippel,et al.  Adapting market research to the rapid evolution of needs for new products and services , 1992 .

[3]  J. Hauser,et al.  The House of Quality , 1988 .

[4]  J. Rayport,et al.  Spark innovation through empathic design. , 1997, Harvard business review.

[5]  G. John,et al.  Effects of Organizational Structure of Marketing Planning on Credibility and Utilization of Plan Output , 1984 .

[6]  R. Cooper,et al.  New Products: What Separates Winners from Losers? , 1987 .

[7]  M. Parry,et al.  The Determinants of Japanese New Product Successes , 1997 .

[8]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[9]  J. Nunnally.  Psychometric Theory (2nd ed), New York: McGraw-Hill. , 1978 .

[10]  K. Atuahene–Gima,et al.  Resolving the Capability–Rigidity Paradox in New Product Innovation , 2005 .

[11]  G. Zaltman,et al.  Factors Affecting the Use of Market Research Information: A Path Analysis , 1982 .

[12]  C. Moorman.  Organizational Market Information Processes: Cultural Antecedents and New Product Outcomes , 1995 .

[13]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[14]  Eric M. Olson,et al.  The Performance Implications of Fit among Business Strategy, Marketing Organization Structure, and Strategic Behavior , 2005 .

[15]  Eric M. Olson,et al.  Organizing for effective new product development: The moderating role of product innovativeness. , 1995 .

[16]  Ajay K. Kohli,et al.  Market Intelligence Dissemination across Functional Boundaries , 1996 .

[17]  D. Wilemon,et al.  Accelerating the Development of Technology-Based New Products , 1990 .

[18]  G. Lynn,et al.  Marketing and Discontinuous Innovation: The Probe and Learn Process , 1996 .

[19]  Richard L. Daft,et al.  Organizational information requirements, media richness and structural design , 1986 .

[20]  James M. Hulbert,et al.  To Serve or Create? Strategic Orientations toward Customers and Innovation , 1999 .

[21]  Clayton M. Christensen,et al.  CUSTOMER POWER, STRATEGIC INVESTMENT, AND THE FAILURE OF LEADING FIRMS , 1996 .

[22]  H. Gatignon,et al.  Strategic Orientation of the Firm and New Product Performance , 1997 .

[23]  R. Daft,et al.  A Tentative Exploration into the Amount and Equivocality of Information Processing in Organizational Work Units. , 1981 .

[24]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[25]  R. Daft,et al.  Information Richness. A New Approach to Managerial Behavior and Organization Design , 1983 .

[26]  Bernard J. Jaworski,et al.  Market orientation: The construct, research propositions, and managerial implications. , 1990 .

[27]  R. Calantone,et al.  The Impact of Market Knowledge Competence on New Product Advantage: Conceptualization and Empirical Examination , 1998 .

[28]  Anil Menon,et al.  A Model of Marketing Knowledge use within Firms , 1992 .

[29]  M. Iansiti.  Shooting the Rapids: Managing Product Development in Turbulent Environments , 1995 .

[30]  Jakki J. Mohr,et al.  Communication Strategies in Marketing Channels: A Theoretical Perspective , 1990 .

[31]  E. Hippel,et al.  Lead users: a source of novel product concepts , 1986 .

[32]  E. Hippel,et al.  FROM EXPERIENCE: Developing New Product Concepts Via the Lead User Method: A Case Study in a “Low-Tech” Field , 1992 .

[33]  Christine Moorman,et al.  The Convergence of Planning and Execution: Improvisation in New Product Development , 1998 .

[34]  Linda L. Putnam,et al.  Handbook of Organizational Communication: An Interdisciplinary Perspective , 1987 .

[35]  Eric M. Olson,et al.  The Contingent Value of Responsive and Proactive Market Orientations for New Product Program Performance , 2005 .

[36]  Barton A. Weitz,et al.  Resource Allocation Behavior in Conventional Channels , 1987 .

[37]  John C. Narver,et al.  Responsive and proactive market orientation and new-product success. , 2004 .

[38]  Terry S. Overton,et al.  Estimating Nonresponse Bias in Mail Surveys , 1977 .