New product outcome and its determinants

Abstract

While new product success and failure in technologically advanced countries has been widely studied, little work has been done on examining this issue in developing countries. Here, the introduction of 279 new products in a developing country, Korea, is first examined to identify the ingredients of new product success. A categorization scheme is developed to distinguish the industrial market environments of developing countries according to their development stages, and proves useful in identifying significant determinants of new product outcome for the two different situations in the industrial market. The two industrial market situations are LDC stage and NIC stage, which represent the early and the later stage of industrialization and economic development in developing countries respectively. In the LDC stage, proficiency of technical effort and indigenous capabilities to make technologically superior products are found to be important factors in determining new product outcome, whereas the critical role of market orientation together with technological capability appears important in deciding new product outcome in the NIC stage. This research also examines the relationships between the corporate strength and the appropriate new product strategies a firm selects together with the impact of the firm``s product innovation strategy on performance results in Korea. Here, 81 Korean manufacturing firms have been employed to identify the relationships. The dimensions underlying firm``s competitive positions, new product strategies and program performance are identified. Also, how a firm``s posture on the strategy dimensions affects the performance of its new product program is described. The findings suggest that a well-balanced new product program emphasizing both appropriate marketing and technological efforts are needed to make the program successful although different company situations call for different new product strategies.