Academic journal article E+M Ekonomie a Management

The Technological Advancement of New Products, Product Newness and Market Information

Academic journal article E+M Ekonomie a Management

The Technological Advancement of New Products, Product Newness and Market Information

Article excerpt

Introduction

Nowadays, technological progress creates a good opportunity for companies to develop and launch products that incorporate advanced technologies. This process is particularly present in the case of high-tech companies as they are technology oriented (Im, Vorhies, Kim, & Heiman, 2016). Firms utilize advanced technology to improve the functionality of their products and in this way they try to satisfy the customers' needs to a large extent (Kocak, Carsrud, & Oflazoglu, 2017) and, as a consequence, to enhance the new products and the firm's performance (Chen, Tang, Jin, Xie, & Li, 2014; Zhou, Yim, & Tse, 2005). This seems to be a straightforward way for companies to create new products.

However, several uncertainties emerge when developing technologically advanced products. Nearly thirty years ago Bonnet (1986) pointed out that the uncertainty associated with developing and marketing new technologically advanced products is twofold. On the one hand, there is economic uncertainty due to incomplete market information about the future market outcome and on the other, there is a technical uncertainty coming from the growing complexity of the market application. Similar risks are discussed by Dhebar (2016). Therefore, this work is concentrated on the two crucial sources of risk when developing technologically advanced products, namely technology and the market. In our work, technology is represented by the technological advancement of a planned new product and the market--by obtaining market information for a new product development (NPD). Additionally, we include product newness, both to the company and to the market, as it is another source of risk related to technology as well as the market (McNally, Cavusgil, & Calantone, 2010). Finally, our focal endogenous variable is the new product's commercial success.

The main purpose of this study is to propose that product newness and obtaining market information are mediators of the relationship between the technological advancement of a new product and the product's commercial success. The existing research suggests that the technological advancement of a new product is likely to affect its performance (Chen et al., 2014; Gao, Zhou, & Yim, 2007; Gatignon & Xuereb, 1997; Im et al., 2016), although little is known about the mediators that are components of this relationship. However, from the theoretical and practical perspective it is important to know what can strengthen or weaken this link. Consequently, we focus on disentangling the direct versus indirect effects of technological advancement of a new product on its commercial success, with product newness and obtaining market information as mediators.

Until now quite a lot of studies have explored the impact of technological orientation or technological innovativeness on new product performance (Chen et al., 2014; Gao et al., 2007; Gatignon & Xuereb, 1997; Im et al., 2016; Kock, Gemunden, Salomo, & Schultz, 2011; Zhou et al., 2005). But our study differs from the previous works and contributes to the theory of product innovation management in several ways. Firstly, our focal exogenous variable is the technological advancement of a new product that comes from technological orientation but refers to a specific new product, not to the company as a whole. In comparison to the technological innovativeness, it concerns not only the intensity of new but also existing advanced technologies that are incorporated within a product. Secondly, the mediative effects of obtaining market information have not been explored but they can be drawn from existing theories. Therefore, accessing them will enhance our knowledge about the mechanisms and drivers of a new product's success. Thirdly, product newness has been incorporated as mediator in the model proposed by Kock et al. (2011) but the mediation effects have not been hypothesized and statistically verified in their research. …

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