THE ROLE OF THE CUSTOMER IN THE DEVELOPMENT OF RADICAL
Introduction
- Outline of Paper
Within the product development literature there are two views regarding customer involvement in the development of radical innovations. How this technology and market information affects the business performance of radical innovation.
Conceptual Framework
- The Role of the Customer
- Radical Innovations
- New Product Development Process
- Organizational Learning
- Synthesis
Aspects of these three views of the firm support the positive role of the customer in the development of radical innovation. The beneficial role of the customer in incremental innovation is well documented (Cooper and Kleinschmidt 1986; Cooper and Kleinschmidt 1990).
Hypothesis Development
- Information obtained from the customer and the level of business
- The stages of the new product development process, information
- The organizational learning of the firm, information obtained from the
- Interaction of Organizational Learning and Information Levels
H1a: The level of technology information obtained from the customer in the development of a radical innovation will differ according to the stage of the NPD process (idea . generation, development and product launch) in which such information is obtained. H1b: The level of market information obtained from the customer in the development of a radical innovation will differ according to the stage of the NPD process (idea generation, development and product launch) in which such information is obtained.
Study Context, Measurement, Design and Sampling Method
- Study Context
- Measurement
- Design
- Interviews and Pretest
- Sample
Three factors make the medical device industry an ideal context for studying the role of the customer in the development of radical innovations. The level of the radical innovation is determined by the level of market and technology novelty.
Analysis and Results
- Analysis
- Results
A model was developed for each of the two dependent performance variables: market share and internal performance. In contrast, there is a negative relationship between market information obtained from the customer during idea generation and the internal performance of the innovation for firms with low organizational memory. In contrast, there is a positive relationship between market information and internal innovation performance for firms with low levels of information dissemination.
Discussion and Implications
- Customer Informer Characteristics
- Technology and Market information
- Organizational Learning
- The Interaction of Organizational Memory and Market Information
- Information Utilization Moderates the Effect of Technology
- Information Dissemination Moderates the Effect of Market
The pattern of information obtained during the NPD process shows that information levels vary by stage. This pattern suggests that early in NPD radical innovation firms need higher levels of technological information than in the rest of the process. Conversely, companies with a low level of organizational memory showed the opposite relationship to performance than those with a high level of organizational memory.
Conclusion, Limitations and suggestions for future research
- Conclusion
- Theoretical Implications
- Managerial Implications
- Limitations and Suggestions for Future Research
Second, this study has shown that the information obtained from the customer varies over the course of the NPD process. This research describes the role of the customer in the development of radical innovations from both a substantive and theoretical perspective. First, understanding the use of market and technology information in radical development.
Tables
831 How successful was this product in terms of profitability, compared to your company's goals for this product? Market Share (Song and Parry 1997b) .913 How successful was this product in terms of market share, compared to your company's other new products. 868 How successful was this product in terms of market, relative to your company's goals for this product.
Figures
Panel A: Interaction between idea generation stage, market information, and organizational memory level on product business performance relative to firms' expectations. Panel B: Interaction between stage of development, market information and information dissemination on product business performance relative to firms' expectations.
This research is a preliminary step in the study of the company's IA and OM during the development of new products of radical innovations. WHO, WHAT AND WHEN: THE ROLE OF THE CUSTOMER IN DEVELOPING RADICAL INNOVATIONS. Specify the level (amount) of market information provided by the customer during the development phase of the development of a radical innovation.
ACQUIRE AND FORGET: THE CONFLICT OF INFORMATION
Introduction
Radical innovations (RIs) are defined as those innovations that are new to the market, new to the technology, or a combination of the two (Garcia and Calantone 2002). OM has been studied in relation to the uncertainty of the environment (Dougherty 1992; Leonard-Barton 1992; Moorman and Miner 1997), but not specifically in relation to the NPD of radical innovations. Our research shows that the new product development of radical innovations creates a conflict within dimensions of the OL of the firm.
Literature Review
- Uncertainty
- New Product Development Process
- Radical Innovations
- Organizational Learning
This definition of radical innovations can be divided into two distinct parts related to the "newness" of the technology and the "newness" of the market. A critical antecedent to the firm's ability to overcome their internal uncertainties is the firm's ability to learn (Hurley and Hult 1998). But for radical innovations, a long OM can hinder the development of radical innovations because the age of the "average".
Method
- Study Context
- Sampling
- Instrument
- Validity and Reliability
- Design
- Procedure
An example of this is seen in the development of the many examples of flat screen LCD and Plasma televisions. The first example framework was based on the winners of the Medical Design Excellence Award (MDEA) (Cannon Communications 2005). Due to the low number of contacts from MDEA award winners, one of the award judges was contacted.
Results
- AlphaCorp – Information Acquisition
- BetaCorp – Information Acquisition Deficit
- Gamma Medical – Organizational Memory
This complexity arises from the dissonance of acquisition and memory behavior, as well as from the social desirability associated with acquiring information during the NPD process. Instead, product development was driven by the technology of the new product, without any consideration for the market or market-related factors. As a result of the clinical trials, the superior performance and efficacy of the product was demonstrated.
Discussion
- Firms seek increased levels of information
- Organizational memory length is shorter for radical innovations
- Tension between information acquisition and organizational
Given the overall economic variability of the market, the optimal levels of IA and OM for these firms developing radical innovations remain enigmatic. Future research requires further refinement of the model, particularly in the area of memory classification and assessment. Furthermore, future research should be conducted on this topic to demonstrate the generalizability of the research problem.
Implications
From a practical perspective, the company's learning characteristics are important for developing new products. Recognizing that the environment and technology can result in a radical innovation, the acquisition of information and corporate memories can be controlled to increase the probability of success of the product. The environment, the company and the product will drive the company's organizational learning.
Tables
Figures
Indicate the level (amount) of technological information provided by the customer during the development stage of the development of a radical innovation. Indicate the level (amount) of technological information provided by the customer during the launch/commercialization phase of the development of a radical innovation. Indicate the level (amount) of market information provided by the client during the launch/commercialization phase of the development of a radical innovation.
WHO, WHAT, AND WHEN: THE ROLE OF THE CUSTOMER IN THE
Introduction
Before the benefit of customer information can be determined, companies must identify who will be used to provide information in the development of a radical innovation. Thus, two dimensions of radical innovations can be distinguished and (as a result) two different types of information that can be provided by customers during the product development process: technology and market information. These questions are answered by developing a model for the information and timing of customer information acquisition in the development of radical innovations.
Literature Review and Hypothesis Development
- Who is the Customer?
- What information is provided?
- When is the information provided?
Companies that seek information from their customers when developing radical innovations... must look for technology and market information. H3a: The level of technological information obtained from the customer in the development of a radical innovation will vary depending on the stage of the NPD process (idea generation, development and product launch) in which such information is obtained. H3b: The level of market information obtained from the customer when developing a radical innovation will vary depending on the stage of the NPD (idea generation, development, and product launch) process at which such information is obtained.
Method
- Study Context
- Sampling Procedure
- Innovation Characteristics
- Firm Characteristics
- Key Informants Characteristics
- Questionnaire Design and Construct Measurement
- Measures
Of the products described by respondents, 14% were in Class I (least regulated), 55% in Class II, 19% in Class III (most regulated) and 11% were unclassified. In addition to the number of employees, the company's experience in the medical device market is important to record. These demographic statistics for the respondent companies suggest that the sample may be representative of the medical device market.
Analysis and Results
- Who? - Customer characteristics
- What? – Information Types
- When? - The Interaction of Information and Stage
A review of the descriptive statistics reveals both technology information and market information is obtained from the customer by companies that are developing radically. This test reveals that the technology and market information are statistically different for the development stage (p<0.10) and the product launch stage (p<.001). The within-subjects contrasts indicate a positive quadratic relationship between market information and stage of the NPD process, F p<.001, and an insignificant linear relationship.
Discussion and Implications
- Who is the customer?
- What information is obtained?
- When is the information obtained?
Thus, the information obtained from the customer varies depending on the type of information and when the information is obtained, which supports H3. The finding for Hypotheses 2a and 2b that both technology and market information is obtained from the customer supports the premise that customers provide useful information during the NPD process for radical innovations. This pattern supports the idea that early in NPD for a radical innovation, firms require higher levels of technology information than during the rest of the process.
Implications
First, an understanding of the use of market and technology information in the development of radical innovations allows companies to focus their information gathering activities on the type or types of information most appropriate for the stages of NPD. Second, customer information is typically obtained and studied in the early stages of the NPD process. This research extends our understanding of the potential benefit of customer input by studying firms' utilization of market and technology information obtained from the customer throughout the duration of the NPD process.
Limitations and Suggestions for Future Research
Tables
Newness to the market (Danneels and Kleinschmidt To what extent did this product target new customers for your company – customers you had not sold to? To what extent did this product pit you against new competitors – competing companies you had never dealt with before 838 To what extent did this product represent a new product category – a type of product that your company had not yet created.
Figures
The customers we have received information from in the development of this product: Usually found out about new products and solutions. The customers we have received information from in the development of this product: Perceived as 'cutting edge' in their fields. The customers we have received information from in the development of this product: Improved and developed new techniques in their fields.
Launch/Commercialization – This phase of new product development involves the release of the finished product to the market. Please indicate the amount of information collected during the development phase of the developed product. Please indicate the amount of information collected during the launch/commercialization phase of the developed product.
CONCLUSION – WHAT IT ALL MEANS
