Academic journal article Innovation: Organization & Management

What Is the Role of Commercialisation and Reputation in Product Innovation Success?

Academic journal article Innovation: Organization & Management

What Is the Role of Commercialisation and Reputation in Product Innovation Success?

Article excerpt

As conceptualised in literature, the innovation process comprises two parts; conceiving of a new technology or invention and its sub- sequent commercialisation or implementation (Shumpeter, 1934; Zaltman, Duncan, & Holbek, 1973). Companies often associate innovation management with improvement in the design and production of new products, not emphasising the value of the steps needed to take the product to market. However, a successful innovation process is not just the development of superior product technology, it also requires that consumers per- ceive that value and decide to adopt it (Cooper, 1994; Jagodic, Courvisanos, & Yearwood, 2009).

In high tech markets, the complexity of the products tends to slow the process of adop- tion. The asymmetry between the information circulated among companies and that held by consumers, with regard to the degree of a prod- uct's innovation, complicates accurate consumer evaluation (Srinivasan, Pauwels, Silva-Risso, & Hanssens, 2009). Companies need to dedicate more effort and resources to the innovation dif- fusion process (Rogers, 1962), making customers aware of the existence, features and advantages of innovative products.

The commercialisation phase of the innovation process, the means of transferring the innovation to the market (Lin, Lee, & Hung, 2006), should not only help to reduce information asymmetry, but also to secure an advantage over competitors who disregard the value of innovation diffusion. Firm performance implications of innovation activities and commercialisation competencies have been broadly studied in the literature (Baker & Sinkula, 2005; Calantone, Cavusgil, & Zhao, 2002; Langerak, Hultink, & Robben, 2004; Lee & Roh, 2012; Subramanian & Nilakanta, 1996). In turn, researchers in the innovation manage- ment process underline the benefits of marketing and promotion activities to achieve successful new products launches (Cateora, Gilly, & Graham, 2009; O'Cass & Sok, 2012). However, there is less empirical evidence on the collective effects of innovation and commercialisation activities on firms' performance and on the role that market- ing plays in the innovation's market success. The purpose of this paper is to bridge this gap in the literature by investigating the mediating role of the firm's marketing competencies and resources in the relationship between innovation and mar- ket performance (MP). Specifically, the firm's commercialisation activities (advertising cam- paigns, market studies or promotions) and prod- uct reputation (PR) are proposed as key factors for achieving superior performance.

This study uses Partial Least Squares (PLS) to test the hypotheses on a sample of European high tech companies. The use of constructs enables inclusion of the multidimensional nature of the various strategies analysed. The data are based on the information that companies disclose on their websites. Companies use this channel to communicate corporate strategies so as to reduce information asymmetries between companies and stakeholders. Also, this information reduces risks associated with the subjectivity of surveys and personal interviews generally used in stud- ies applying the Structural equation modelling (SEM) approach.

This paper makes several contributions to the literature. First, it analyses and quantifies the direct and indirect effects of innovation on MP. Second, it demonstrates the mediating effect of commer- cialisation strategies and innovative reputation on the innovation-performance relationship. As such, both mediating variables can be considered complementary tools for achieving commercially successful innovation. Finally, this study empha- sises the use of structural equation modelling for testing mediator effects with latent constructs.

The paper is organised as follows. Literature review and hypotheses section presents the litera- ture review and justifies the hypotheses. Research method and sample definition sections and Measuring variables section describe the research method, sample, and variables used in the empiri- cal analysis. …

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