AEP Seminar Series

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AEP Seminar Series

• Keven Malkewitz
• Assistant Professor of Marketing
• Oregon State University
• March 13, 2009

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Presentation Overview

• Presentation of NPD in athletic footwear and
  apparel paper (25 minutes)
• High-potential research topics in ATH, NPD,
  Entrepreneurship, and Innovation (10 minutes)
• Feedback, Q and A (15 minutes)

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Sneakers versus Halo Rooms The Influence of
Technology Uncertainty on Managers New Product
Development Decisions

• Keven Malkewitz
• Assistant Professor of Marketing
• Oregon State University
• (a.k.a. New Product Development Process in
  Athletic Footwear and Apparel)

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or
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How Keven is Going to Write off Those New Golf
Shoes as an Unreimbursed Business Expense
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Background

• Im interested in
• Products and NPD (JM wine, current paper)
• Design (JCIRA ad design, JR submission, JMTP 2nd
  round, JM )
• Visual Fluency (Data collection)
• I was reading the new product development (NPD)
  literature
• Industrial products and technology heavy (Halo
  rooms)
• I was puzzled, adidas NPD was very different
  (sneakers)

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Setting the Stage

• Manuscript target Journal of Product Innovation
  Management (a.k.a. JPIM)
• Special issue on NPD decision making
• Focus on differences between the athletic
  footwear and apparel industrys NPD decisions and
  other industries decisions

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Sneakers
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Halo Room(HP and DreamWorks)
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Introduction

• NPD research has high technological
  uncertainty bias, examples are
• Industrial products (IND PROD)
• high technology products (TECH)
• Athletic footwear and apparel (ATH) NPD is
  usually low tech uncertainty
• Examine NPD differences between ATH and two
  high-tech uncertainty industries...
• NPD Activities in IND PROD (Cooper Kleinschmidt
  1986)
• NPD Problems in TECH (Scott 1999)

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Tech and Market Uncertainty (Lynn Akgün 2001)

• NPD and innovation can be seen as a 2x2 matrix

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2 x 2 Nike Examples

• Incremental Innovation Lo Tech/Lo Market
  Uncertainty
• Eric Nelsons What are the new colors for Fall
  09?
• Evolutionary Market Innovation Lo Tech/Hi Market
• Nike Golf and Nike Hockey
• Evolutionary Tech Innovation Hi Tech/Low Market
  Uncertainty
• Nike Tailwind (Air) when it first came out
• Radical innovation Hi Tech/Hi Market Uncertainty
• Nike automobiles
• SPARQ?

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General Research Question

• Compare high tech uncertainty (TECH, IND PROD)
  with low tech uncertainty (ATH)

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NPD Activities(Cooper and Kleinschmidt 1986)

• Identified and obtained frequency of 13 NPD
  activities
• Origin of Stage Gate
• Data from IND PROD
• NP Success
• NP Failure
• The 13 activities are

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13 NPD Activities

• Initial screening
• Product development activities
• In-house product testing
• Preliminary technical assessment
• Preliminary market assessment
• Product launch
• Customer tests of products
• Business/financial analysis
• Production start-up
• Trial production
• Pre-commercialization business analysis
• Detailed market study/market research
• Test market/trial sell

Orange bold activities will be utilized in
hypotheses
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NPD Problems (Scott 1999)

• Identified 24 problems in NPD
• Data from high-technology managers (TECH)
• Collected using DELPHI Method
• The 24 problems are

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24 NPD Problems

• Within-company diffusion and transfer
• Obtaining competitive advantage
• Involvement of manufacturing in NPD
• Globalization of product development process
• Resource allocation to development activities
• Establishing a vision
• Productivity of product development activities
• Rewarding and educating personnel
• Project continuance discontinuance
• Oversight of activities

• Strategic product planning
• New product project selection
• Organizational learning
• Core competencies
• Cycle time reduction
• Creating a conducive culture
• NPD team coordination management
• Trends and paradigm shifts
• Marketing group involvement
• Customer/supplier involvement
• Senior manager involvement
• Soft skills for personnel
• Organizations RD structure
• Alliances/partnerships between companies

Orange bold problems will be used in hypotheses
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Sources of Possible Differences

• NPD product change intensity
• Hua and Wemmerlöv 2006
• Risk incurred in NPD
• Barczak, Griffin, and Kahn 2009
• NPD attribute focus
• (Veryzer 2005, Verganti 2007 2008)

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Research Question Format

• Intensity activities, problems
• Risk activities, problems
• Focus activities, problems

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Intensity of NPD

• Number of developments higher in ATH
• Ranges change more often
• SKU Issues increase developments by an order of
  magnitude
• Size of product ranges
• Thousands of products in ATH

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Intensity NPD Activity ATH lower in

• Initial screening
• Product development activities
• In-house product testing
• Preliminary technical assessment
• Preliminary market assessment
• Product launch
• Customer tests of products
• Business/financial analysis
• Production start-up
• Trial production
• Pre-commercialization business analysis
• Detailed market study/market research
• Test market/trial sell

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Intensity NPD Problems ATH Higher in

• Strategic product planning
• New product project selection
• Organizational learning
• Core competencies
• Cycle time reduction
• Creating a conducive culture
• NPD team coordination management
• Trends and paradigm shifts
• Marketing group involvement
• Customer/supplier involvement
• Senior manager involvement
• Soft skills for personnel
• Organizations RD structure
• Alliances/partnerships between companies

• Within-company diffusion and transfer
• Obtaining competitive advantage
• Involvement of manufacturing in NPD
• Globalization of product development process
• Resource allocation to development activities
• Establishing a vision
• Productivity of product development activities
• Rewarding and educating personnel
• Project continuance discontinuance
• Oversight of activities

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Risk of NPD

• High technology uncertainty has increased risk
  due to
• Simultaneous technology and product development
• Longer development cycle time
• Larger initial investment of capital
• More per development
• Longer product life cycle
• Higher platform risk
• Need for proprietary info

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RISK NPD Activities ATH lower in

• Initial screening
• Product development activities
• In-house product testing
• Preliminary technical assessment
• Preliminary market assessment
• Product launch
• Customer tests of products
• Business/financial analysis
• Production start-up
• Trial production
• Pre-commercialization business analysis
• Detailed market study/market research
• Test market/trial sell

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RISK NPD Problems ATH Lower in

• Strategic product planning
• New product project selection
• Organizational learning
• Core competencies
• Cycle time reduction
• Creating a conducive culture
• NPD team coordination management
• Trends and paradigm shifts
• Marketing group involvement
• Customer/supplier involvement
• Senior manager involvement
• Soft skills for personnel
• Organizations RD structure
• Alliances/partnerships between companies

• Within-company diffusion and transfer
• Obtaining competitive advantage
• Involvement of manufacturing in NPD
• Globalization of product development process
• Resource allocation to development activities
• Establishing a vision
• Productivity of product development activities
• Rewarding and educating personnel
• Project continuance discontinuance
• Oversight of activities

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NPD Attribute Focus

• Functional, Symbolic, Experiential Attributes
  (Park, Jaworski, MacInnis 1986)
• Different NPD attribute foci
• High tech uncertainty functional attribute focus
• Low technology uncertainty industries focus on
  functional, but also on symbolic, experiential
• BEST meeting (Built Environment and Sustainable
  Technologies)
• Symbolic, experiential NPD is language, culture,
  symbols, and meaning, NOT technology (Verganti
  2007 DellEra and Verganti 2008)

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FOCUS NPD Activities ATH higher in

• Initial screening
• Product development activities
• In-house product testing
• Preliminary technical assessment
• Preliminary market assessment
• Product launch
• Customer tests of products
• Business/financial analysis
• Production start-up
• Trial production
• Pre-commercialization business analysis
• Detailed market study/market research
• Test market/trial sell

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FOCUS NPD Problems ATH Higher in

• Strategic product planning
• New product project selection
• Organizational learning
• Core competencies
• Cycle time reduction
• Creating a conducive culture
• NPD team coordination management
• Trends and paradigm shifts
• Marketing group involvement
• Customer/supplier involvement
• Senior manager involvement
• Soft skills for personnel
• Organizations RD structure
• Alliances/partnerships between companies

• Within-company diffusion and transfer
• Obtaining competitive advantage
• Involvement of manufacturing in NPD
• Globalization of product development process
• Resource allocation to development activities
• Establishing a vision
• Productivity of product development activities
• Rewarding and educating personnel
• Project continuance discontinuance
• Oversight of activities

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Methodology

• Established research questions face validity
• Panel of nine experts (3 Tech, 3 ATH, 3 Academic)
• Identified possible industry differences
• Improved on TECH and IND PROD data
• Senior managers (CEO, SVP Mktg, Director of
  Design)
• Multiple companies (over 2/3 of global industry)
• 3 respondents per company (Mktg, Design, Dev.)
• NPD for global business
• Qualitative (n 37) and quantitative (n 32)
  data
• Confirm participants general understanding
• Surveyed data for firms NPD activities, problems
• T-tests to compare ATH-TECH and ATH-IND PROD
  means

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Intensity - Activities
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Intensity - Problems
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Risk - Activities
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Risk - Problems
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Focus - Activities
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Focus - Problems
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Discussion and Conclusions

• Industry differences demonstrated
• Industry selection based on research question
• Weick collective mind heedful Interaction
• Select research questions, then industry
• More attributes attention
• Differences in market research

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Limitations Future Research

• Limitations
• Industry changes over time
• Future Research
• Identify NPD pain
• Conduct the activity often
• Were not good at it and perceived need for
  improvement
• Resources
• Financial impact of NPD problems
• Attribute importance

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Before moving onto High-Potential Research
TopicsQuestions?
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High Potential Research Topics in ATH, NPD,
Entrepreneurship, and Innovation
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High Potential Topics

• What is meant by high potential?
• ATH topics with high probability of joining the
  Marketing, Management, or Entrepreneurship
  conversation
• Topics where ATH has a competitive advantage in
  getting published over other industries or other
  data sets
• Four such topics are

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High-Potential Research Topics

• Diffusion of innovation
• Product attributes
• Design briefs
• Signaling sustainability

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Diffusion of Innovation

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Diffusion of Innovation

• Great natural experiment
• Relatively short cycles
• Well-chronicled multiple examples
• Determinants of diffusion
• Control variable Levels easily quantified for
  reviewers
• Expertise
• Involvement

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Diffusion - Lead Users

• Lead users in sports have been found to (Frauke,
  von Hippel, and Schrier 2006)
• Be more innovative
• Produce better quality innovations
• Interest in
• Identifying lead users
• Value of lead user ideas

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Product Attributes

• I got my first pair of real track shoes my
  freshman year adidas, the three stripes. I kept
  them in my room, on their own shelf, under a spot
  light. I loved those shoes.

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Product Attributes

• I got my first pair of real track shoes my
  freshman year adidas, the three stripes. I kept
  them in my room, on their own shelf, under a spot
  light. I loved those shoes.

Philip H. Knight Chairman of the Board of
Directors, Nike
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Product Attributes

• Attributes can be
• Functional
• Symbolic
• Experiential (Park, Jaworski, MacInnis 19XX
  Keller 1993)
• Like innovation diffusion, multiple target
  markets and levels of consumer expertise (Alba
  and Hutchinson 1987)
• Attribute interaction
• CCC study

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Product Attribute Examples
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Design Product Briefs

• Widely used in ATH industry
• Broad range of attributes and target markets
• Serving two masters
• Consumer
• B2B
• BBQ Shoes
• Frequent product line changes

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Design Brief

• Knowledge content
• Attributes (FSE)
• Influences
• Development
• Cycle time
• Quality of output
• Product innovation charter (PIC) differences

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Signaling Sustainability
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Signaling Sustainability
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NPD in Athletic Footwear and Apparel

• Presentation of the athletic footwear and apparel
  paper
• (25 minutes)
• High-potential research topics in ATH, NPD,
  Entrepreneurship, and Innovation
• (10 minutes)
• Feedback, questions and answers
• (15 minutes)

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Questions?
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Thank You!

• Contact Info
• keven.malkewitz_at_bus.oregonstate.edu
• (919) 345 - 4144