INTERACTION EFFECTS OF TIME PERFORMANCE AND MARKET KNOWLEDGE COMPETENCE ON PRODUCT SUCCESS

The influence of Time Performance on Product Success and the interaction effect on this relationship of Market Knowledge Competence is examined utilizing a sample of 256 manufacturing firms settled in four countries: Italy, Germany, Japan and USA. Evidence of both direct and indirect interactive effects of Time Performance and Market Knowledge Competence on Product Success was found. New product development has long been recognized as an important activity of business enterprises and as such has been studied from many perspectives both from the academic and the practitioner points of view (e.g., Brown & Eisenhardt, 1995; Cooper, 1993; Griffin, 1997; Griffin, 1999; Lee et al., 2000; Page, 1993; Pittiglio, Rabin, Todd & McGrath, 1995). Most of these studies have identified various drivers purported to contribute to the success of product development. An important motivation behind the use of these drivers has been to decrease development time for new products. Thus, as global competitive pressures increase many companies have invested great resources into shortening their product development cycle time (Griffin, 1993; Stalk and Hout, 1990; Wheelwright, 1992; Wheelwright, S. C., & Clark, 1994; Womack, 1991). These efforts seem justified by the need to deal with continuous changes in customer needs (Ali, 2000; Gupta and Sounder, 1998) and the requirement to rapidly incorporate new technologies into products (Cordero, 1991; Wilhelm and Li, 2003). From this extensive research it has often been assumed that speed to market is crucial for new product success and that all firms therefore need to know what factors determine a fast and punctual development of new products. Consequently, a large body of literature has empirically researched which factors can drive an accelerated product development process, not only from an exploratory point of view but also, more recently, from a theory-testing perspective (Griffin, 2002). This literature has mainly examined the relationships between key development process drivers and time performance (e.g. Clark and Fujimoto, 1991; Cooper, 1995, Cooper and Kleinschmidt, 1994; Droge et al., 2004; Dyer et al., 1999; Filippini et al., 2004; Griffin, 1997, Gupta and Sounder, 1998; Hartley et al., 1997a; Hartley et al., 1997b; Kessler and Bierly, 2002; Kessler and Chakrabarti, 1999; Lynn et al., 1999a; Lynn et al., 1999b; Mabert et al., 1992; Millson and Wilemon, 2002; Swink, 2003; Wheelwright and Clark, 1992). However, just a few studies have explicitly and empirically investigated the relationship between time performance and product success, which is usually defined as consisting of commercial (i.e. product sales) or financial (i.e. profit/cost metrics) success or a combination of both. The overall results of this extant literature are quite contrasting. With regard to this, Griffin (2002) affirms that “while many practitioners perceive that decreasing NPD cycle time is important to new product success, there is very little empirical support that substantiates this perception” (p.292). In fact, these researches show that a clear relationship between important constructs such as Time Performance and Product Success does not emerge from the empirical data. In the context of the present study