Market research companies and new product development tools
| Pages | 305-318 |
| Date | 01 August 1998 |
| DOI | https://doi.org/10.1108/10610429810229843 |
| Published date | 01 August 1998 |
| Author | Edwin J. Nijssen,Ruud T. Frambach |
| Subject Matter | Marketing |
JOURNAL OF PRODUCT & BRAND MANAGEMENT, VOL. 7 NO. 4 1998, pp. 305-318 © MCB UNIVERSITY PRESS, 1061-0421 305
1. Introduction
New product development (NPD) is essential for company survival and
growth (Hart, 1996). However, despite our gains in knowledge and
experience, the commercial rate of success of new products is still low
(Clark and Wheelright, 1993; Craig and Hart, 1992). NPD is a complex and
sizable activity whose outcome remains largely unpredictable.
Information plays a key role in reducing NPD failure and thus in increasing
NPD success (Urban and Hauser, 1993; Verhage et al., 1981). Depending on
the level of newness of the new product, several basic questions have to be
answered (Davis, 1993) including what product actually to develop, how to
design it, and how to market it? In general, the more innovative the new
product, the more information will be required. In order to help obtain
information, a large number of tools has been developed (Schelker, 1976).
They can be classified according to the type of questions, i.e. NPD problems
involved (see Table I).
Although most NPD tools were designed exclusively to address a specific
NPD problem, empirical research shows that managers use them in a rather
unfocused way. They apply them at different stages of the NPD process
(Mahajan and Wind, 1992) as they see fit. The main reasons for using NPD
tools include problem identification, increasing the level of success of the
new product and gathering data to support the company’s sales force.
Although users tend to be satisfied overall usage rates of NPD tools are low.
In two recent studies, Mahajan and Wind (1992) and Nijssen and Lieshout
(1995) report levels of about 30 percent for US and European companies,
respectively. Explanations for the limited level of adoption are the low level
of awareness among managers of the existence of these NPD tools (Mahajan
and Wind, 1992), limited faith of managers in the usefulness of these tools
(Verhage et al, 1981), and the involvement of MR companies in gathering
market information and solving companies’ NPD problems (Nijssen and
Lieshout, 1995). The latter points to the fact that companies can either gather
information by themselves or outsource. However, many companies with
their own market research department have been found also to use external
agencies frequently.
Whereas Desphande and Zaltman (1982; 1987) report that commissioning
market research is common practice among American consumer goods and
industrial companies, usage levels of only 34 and 36 percent respectively are
Market research companies and
new product development tools
Edwin J. Nijssen
Nijmegen Business School, Nijmegen, The Netherlands, and Visiting
Associate Professor, Marketing Department, Stern School of Business,
New York, USA
Ruud T. Frambach
Associate Professor of Marketing, Tilburg University, The Netherlands
and University of Ghent, Belgium
The authors thank Saskia van Loon for helping execute the research and two
anonymous reviewers from the Journal of Product & Brand Management for their
comments on a previous version of this text.
An executive summary
for managers and
executives can be found
at the end of this article
Information plays a key
role in reducing NPD
failure
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