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Abstract:
Bundling is pervasive in today's markets. However, the bundling literature contains inconsistencies in the use of terms and ambiguity about basic principles underlying the phenomenon. The literature also lacks an encompassing classification of the various strategies, clear rules to evaluate the legality of each strategy, and a unifying tramework to indicate when each is optimal. Based on a review of the marketing, economics, and law literature, this article develops a new synthesis of the field of bundling, which provides three important benetits. First, the article clearly and consistently defines bundling terms and identifies two key dimensions that enable a comprehensive classitícation of bundling strategies. Second, it formulates clear rules for evaluating the legality of each of these strategies. Third, it proposes a framework of 12 propositions that suggest which bundling strategy is optimal in various contexts. The synthesis provides managers with a framework with which to understand and choose bundling strategies. It also provides researchers with promising avenues for further research.

Bundling, Marketing, Strategy

Abstract:
Indirect network effects are of prime interest to marketers because they affect the growth and takeoff of software availability for, and hardware sales of, a new product. While prior work on indirect network effects in the economics and marketing literature is valuable, these literatures show two main shortcomings. First, empirical analysis of indirect network effects is rare. Second, in contrast to the importance the prior literature credits to the chicken-and-egg paradox in these markets, the temporal pattern – which leads which? – of indirect network effects remains unstudied. Based on empirical evidence of nine markets, this study shows, among others, that: (1) indirect network effects, as commonly operationalized by prior literature, are weaker than expected from prior literature; (2) in most markets we examined, hardware sales leads software availability, while the reverse almost never happens, contradicting existing beliefs. These findings are supported by multiple methods, such as takeoff and time series analyses, and fit with the histories of the markets we studied. The findings have important implications for academia, public policy and management practice. To academia, it identifies a need for new, and more relevant, conceptualizations of indirect network effects. To public policy, it questions the need for intervention in network markets. To management practice, it downplays the importance of the availability of a large library of software for hardware technology to be successful.

Indirect Network Effects, New Product Growth, Takeoff, Chicken-and-Egg

Abstract:
Indirect network effects are of prime interest to marketers because they affect the growth and takeoff of software availability for, and hardware sales of, a new product. While prior work on indirect network effects in the economics and marketing literature is valuable, these literatures show two main shortcomings. First, empirical analysis of indirect network effects is rare. Second, in contrast to the importance the prior literature credits to the chicken-and-egg paradox in these markets, the temporal pattern - which leads which? - of indirect network effects remains unstudied. Based on empirical evidence of nine markets, this study shows, among others, that: (1) indirect network effects, as commonly operationalized by prior literature, are weaker than expected from prior literature; (2) in most markets we examined, hardware sales leads software availability, while the reverse almost never happens, contradicting existing beliefs. These findings are supported by multiple methods, such as takeoff and time series analyses, and fit with the histories of the markets we studied. The findings have important implications for academia, public policy and management practice. To academia, it identifies a need for new, and more relevant, conceptualizations of indirect network effects. To public policy, it questions the need for intervention in network markets. To management practice, it downplays the importance of the availability of a large library of software for hardware technology to be successful.

Indirect Network Effects, New Product Growth, Takeoff, Chicken-and-Egg

Abstract:
Prior research on technology-intensive (TI) markets makes abstraction of the social context in which transactions take place. In contrast with this prior literature, the authors show that buyer-vendor transactions in TI markets are relationally and structurally embedded in an interfirm network. Their main premise is that buyers in TI markets prefer vendors with whom they can share a strong tie, and that in turn buyers want these vendors to share strong ties with their component manufacturers. This is an important addition to TI literature and to the on-going debate on the strength of ties in the sociology, management and marketing literatures. The authors also specifically consider how characteristics focal to TI markets, such as the know-how buyers possess or the pace of technological change they perceive, affect the extent to which buying behavior is relationally and structurally embedded. An empirical test in the computer network market shows good support for the developed theory.

technology-intensive markets, embeddedness, buying behavior, tie strength, conjoint analysis

Abstract:
Growth is one of the most compelling goals of managers today. This paper addresses the following questions about the international growth of new products in Europe: Does the pattern of growth differ across countries? If so, does culture or economics explain the differences? What are the implications of these results for new product strategy? The results show that the pattern of growth differs substantially across European countries. These differences are explained mostly by economic wealth and not by culture. The study addresses the implications of these results for: (a) the choice of a waterfall versus sprinkler strategy for the introduction of a new product; (b) the global versus local marketing of a new product; and (c) managing a firm's expectations about new product growth.

New product growth, International marketing, International diffusion

Abstract:
Marketing researchers often assume that innovation diffusion is affected by social contagion. However, there is increasing skepticism about the importance of contagion and, as has long been known, S-shaped diffusion curves can also result from heterogeneity in the propensity to adopt. To gain insight into the role of these two differentthough not mutually exclusivemechanisms, we present substantive conjectures about conditions under which contagion and heterogeneity are more pronounced, and test these conjectures using a meta-analysis of the q/p ratio in applications of the Bass diffusion model. We find that the q/p ratio is positively associated with the Gini index of income inequality in a country, supporting the heterogeneity-in-thresholds interpretation. We also find evidence that q/p varies as predicted by the G/SG diffusion model, but the evidence vanishes once we control for national culture. As to contagion, we find that the q/p ratio varies systematically with the four Hofstede dimensions of national culture, and for three of them in a pattern theoretically consistent with the social contagion interpretation. Furthermore, we find that products with competing standards have a higher q/p ratio, which is again consistent with the social contagion interpretation. Finally, we find effects of national culture only for products without competing standards, suggesting that technological effects and culturally mediated social contagion effects may not operate independently from each other.

innovation diffusion, social contagion, income heterogeneity, national culture, meta-analysis

Abstract:
Sales takeoff is vitally important for the management of new products. Limited prior research on this phenomenon covers only the United States. This study addresses the following questions about takeoff in Europe:

1) Does takeoff occur as distinctly in other countries, as it does in the United States?
2) Do different categories and countries have consistently different times-to-takeoff?
3) What economic and cultural factors explain the intercountry differences?
4) Should managers use a sprinkler or waterfall strategy for the introduction of new products across countries?

We gathered data on 137 new products across 10 categories and 16 European countries. We adapted the threshold rule for identifying takeoff (Golder and Tellis 1997) to this multinational context. We specify a parametric hazard model to answer the questions above. The major results are as follows:

1) Sales of most new products display a distinct takeoff in various European countries, at an average of six years after introduction.
2) The time-to-takeoff varies substantially across countries and categories. It is four times shorter for entertainment products than for kitchen and laundry appliances. It is almost half as long in Scandinavian countries as in Mediterranean countries.
3) While culture partially explains intercountry differences in time-to-takeoff, economic factors are neither strong nor robust explanatory factors.
4) These results suggest distinct advantages to a waterfall strategy for introducing products in international markets.

International New Product Growth, New Product Takeoff, New Product Growth, International Diffusion, Diffusion of Innovations

Abstract:
Decision-making by physicians on patients treatment has come under increased public scrutiny. In fact, there is a fair amount of debate on the effects of marketing actions of pharmaceutical firms toward physicians and their impact on physician prescription behavior. While some scholars find a strong and positive influence of marketing actions, some find only moderate effects, and others even find negative effects. Debate is also mounting on the role of other influencers (such as patient requests) in physician decision-making, both on prescriptions and sample-dispensing. The authors argue that one factor that may tip the balance in this debate is the role of drug characteristics, such as a drugs effectiveness and a drugs side effects. Using a unique data set, they show that marketing efforts  operationalized as detailing and symposium meetings of firms to physicians  and patient requests do affect physician decision-making differentially across brands. Moreover they find that the responsiveness of physicians decision-making to marketing efforts and patient requests depends upon the drugs effectiveness and side effects. The paper presents clear guidelines for public policy and managerial practice and envisions that the study of the role of drug characteristics  such as effectiveness and side effects  may lead to valuable insights in this surging public debate.

Physician decision-making, marketing efforts, patient requests, drug effectiveness, side effects, drug prescription, sampling, sample-dispensing, pharmaceuticals, public policy

Abstract:
Using only aggregate sales data, the model we propose decomposes the diffusion processes of the respective technological generations and tests if different technological generations have different diffusion parameters. It also estimates the location of the generational transition from the old to the new technology. We develop a routine to test whether the maturation point of the old generation occurs before or after the transition to a new technological generation. Finally, we show that, when the aggregate sales data are generated by multiple technological generations, our model does better in forecasting than a single-regime Bass model.

technological generations, regime-switching models, diffusion modeling

Abstract:
Using only aggregate sales data, the model we propose decomposes the diffusion processes of the respective technological generations and tests if different technological generations have different diffusion parameters. It also estimates the location of the generational transition from the old to the new technology. We develop a routine to test whether the maturation point of the old generation occurs before or after the transition to a new technological generation. Finally, we show that, when the aggregate sales data are generated by multiple technological generations, our model does better in forecasting than a single-regime Bass model.

technological generations, regime-switching models, diffusion modeling

Abstract:
Why do some articles become building blocks for future scholars, while many others remain unnoticed? We aim to answer this question by contrasting, synthesizing and simultaneously testing three scientometric perspectives  universalism, social constructivism and presentation  on the influence of article and author characteristics on article citations. To do so, we study all articles published in a sample of five major journals in marketing from 1990 to 2002 that are central to the discipline. We count the number of citations each of these articles has received and regress this count on an extensive set of characteristics of the article (i.e. article quality, article domain, title length, the use of attention grabbers and expositional clarity), and the author (i.e. author visibility and author personal promotion). We find that the number of citations an article in the marketing discipline receives, depends upon what one says (quality and domain), on who says it (author visibility and personal promotion) and not so much on how one says it (title length, the use of attention grabbers, and expositional clarity). Our insights contribute to the marketing literature and are relevant to scientific stakeholders, such as the management of scientific journals and individual academic scholars, as they strive to maximize citations. They are also relevant to marketing practitioners. They inform practitioners on characteristics of the academic journals in marketing and their relevance to decisions they face. On the other hand, they also raise challenges towards making our journals accessible and relevant to marketing practitioners: (1) authors visible to academics are not necessarily visible to practitioners; (2) the readability of an article may hurt academic credibility and impact, while it may be instrumental in influencing practitioners; (3) it remains questionable whether articles that academics assess to be of high quality are also managerially relevant.

Scientometrics, Citation Analysis, Cite, Referencing, Impact

Abstract:
Prior marketing literature has overlooked the role of regulatory regimes in explaining international sales growth of new products. This paper addresses this gap in the context of new pharmaceuticals (15 new molecules in 34 countries) and sheds light on the effect regulatory regimes have on new drug sales across the globe. Based on a time-varying coefficient model, we find that differences in regulation substantially contribute to cross-country variation in sales. One of the regulatory constraints investigated, i.e. manufacturer price controls, has a positive effect on drug sales. The other forms of regulation such as restrictions of physician prescription budgets and the prohibition of direct-to-consumer advertising tend to hurt sales. The effect of manufacturer price controls is similar for newly launched and mature drugs. In contrast, regulations on physician prescription budget and direct-to-consumer advertising have a differential effect for newly launched and mature drugs. While the former hurts mature drugs more, the latter has a larger effect on newly launched drugs. In addition to these regulatory effects, we find that national culture, economic wealth, introduction timing, lagged sales and competition, also affect drug sales. Our findings may be used as input by managers for international launch and sales decisions. They may also be used by public policy administrators to compare drug sales in their country to other countries and to assess the role of regulatory regimes therein.

international new product growth, drug, pharmaceutical, regulation, culture, economics, timevarying effects, penalized splines

Abstract:
Systems are composed of complementary products (e.g., video game systems are composed of the video game console and video games). Prior literature on indirect network effects argues that, in system markets, sales of the primary product (often referred to as "hardware") largely depend on the availability of complementary products (often referred to as "software"). Mathematical and empirical analyses have almost exclusively operationalized software availability as software quantity. However, while not substantiated with empirical evidence, case illustrations show that certain "superstar" software titles of very high quality (e.g., Super Mario 64) may have had disproportionately large effects on hardware unit sales (e.g., Nintendo N64 console sales). In the context of the U.S. home video game console market, we show that the introduction of a superstar increases video game console sales on average by 14%, over a period of 5 months. Software type does not consistently alter this effect. Our findings imply that scholars who study the relationship between software availability and hardware sales, need to account for superstar returns, and their decaying effect over time, over and above a mere software quantity effect. Hardware firms should maintain a steady flow of superstar introductions, as the positive effect of a superstar only lasts for 5 months, and make, if need be, side-payments to software firms, as superstars dramatically increase hardware sales. Obtaining exclusivity over superstars, by hardware firms, does not provide an extra boost to their own sales, but it does take away an opportunity for competing systems to increase their sales.

system markets, superstars, indirect network effects, new product introductions, software, hardware, video game industry

Abstract:
Stefan Stremersch (Ph.D., Tilburg University, December 2001, cum laude) is Professor of Marketing at Erasmus University Rotterdam, The Netherlands, and Visiting Associate Professor of Marketing at Goizueta Business School, Emory University, United States. He also has been a visiting research scholar at University of Southern California, United States, and obtained salary fellowships of the European Union, ERIM and ICM (Belgium). His research and teaching interest is in marketing high tech products, innovation and new product growth. His work has appeared in journals such as International Journal of Research in Marketing, Journal of Marketing, Journal of Marketing Research and Marketing Science. He has won best-paper awards at Journal of Marketing (2002) and International Journal of Research in Marketing (2003). He has won career achievement awards, such as the ERIM Award for Outstanding Performance of a Young Researcher (2003), the Erasmus Research Prize (2004) and the J.C. Ruigrok Prize (2005). His research has been cited in national (Financieel Dagblad, de Tijd) and international press (The Economist, Sloan Management Review) and is used for public policy input (at the regional and national government levels in Belgium and at the level of the European Commission), for which he received the ERIM Impact Award in 2004.
For an academic, finding an audience is critical. However, finding an audience is not always easy for most marketing academics. This inaugural address explores what the challenges are in finding an audience, among fellow scholars, students, public policy, industry, or society in general. It finds that the academic audience for marketing research is: (1) often small; (2) constrained to the own discipline; and (3) mostly located in the United States. The student audience is also under pressure, due to: (1) the difficult translation of academic marketing research to marketing education; (2) shifting student preferences; and (3) lack of involvement of students. The audience in society is too small due to a lack of relevance of marketing research in three ways: (1) lack of a public policy perspective; (2) too incremental insights to be useful to practice; and (3) too much focus on rigor to be interesting for the press. This address cites three ways to grow towards a larger and more loyal audience by evolving towards: (1) a truly globalized community of marketing academics; (2) living together with our source disciplines; and (3) a stronger focus on the knowledge economy and the life sciences.

marketing, marketing research, philosophy of science, takeoff, globalization, pharmaceuticals, biotechnology, knowledge economy

Abstract:
This article examines the global spill-over of foreign product introductions and takeoffs on a focal country's time-to-takeoff, using a novel data set of penetration data for 8 high tech products across 55 countries. It shows how foreign clout, the susceptibility to foreign influences, and inter-country distances affect global spill-over patterns. The authors find that foreign takeoffs, but not foreign introductions, accelerate a focal country's time-to-takeoff. The larger the country, the higher its economic wealth, and the more it exports, the more clout it has in the global spill-over process. In contrast, the poorer the country, the more tourists it receives and the higher its population density, the more susceptible it is to global spill-over effects. Cross-country spill-over effects are stronger the closer the countries are to one another, both geographically and economically, but not necessarily in terms of culture. The model the authors develop also quantifies the spill-over between each country-pair, allowing it to be asymmetric.

new product takeoff, hazard model, global, cross-country, spill-over

Abstract:
Prior marketing literature has overlooked the role of regulatory regimes in explaining international sales growth of new products. This paper addresses this gap in the context of new pharmaceuticals (15 new molecules in 34 countries) and sheds light on the effect regulatory regimes have on new drug sales across the globe. Based on a time-varying coefficient model, we find that differences in regulation substantially contribute to cross-country variation in sales. One of the regulatory constraints investigated, i.e. manufacturer price controls, has a positive effect on drug sales. The other forms of regulation such as restrictions of physician prescription budgets and the prohibition of direct-to-consumer advertising tend to hurt sales. The effect of manufacturer price controls is similar for newly launched and mature drugs. In contrast, regulations on physician prescription budget and direct-to-consumer advertising have a differential effect for newly launched and mature drugs. While the former hurts mature drugs more, the latter has a larger effect on newly launched drugs. In addition to these regulatory effects, we find that national culture, economic wealth, introduction timing, lagged sales and competition, also affect drug sales. Our findings may be used as input by managers for international launch and sales decisions. They may also be used by public policy administrators to compare drug sales in their country to other countries and to assess the role of regulatory regimes therein.

international new product growth, drug, pharmaceutical, regulation, culture, economics, timevarying effects, penalized splines

Abstract:
Why do some articles become building blocks for future scholars, while many others remain unnoticed? We aim to answer this question by contrasting, synthesizing and simultaneously testing three scientometric perspectives  universalism, social constructivism and presentation  on the influence of article and author characteristics on article citations. To do so, we study all articles published in a sample of five major journals in marketing from 1990 to 2002 that are central to the discipline. We count the number of citations each of these articles has received and regress this count on an extensive set of characteristics of the article (i.e. article quality, article domain, title length, the use of attention grabbers and expositional clarity), and the author (i.e. author visibility and author personal promotion). We find that the number of citations an article in the marketing discipline receives, depends upon what one says (quality and domain), on who says it (author visibility and personal promotion) and not so much on how one says it (title length, the use of attention grabbers, and expositional clarity). Our insights contribute to the marketing literature and are relevant to scientific stakeholders, such as the management of scientific journals and individual academic scholars, as they strive to maximize citations. They are also relevant to marketing practitioners. They inform practitioners on characteristics of the academic journals in marketing and their relevance to decisions they face. On the other hand, they also raise challenges towards making our journals accessible and relevant to marketing practitioners: (1) authors visible to academics are not necessarily visible to practitioners; (2) the readability of an article may hurt academic credibility and impact, while it may be instrumental in influencing practitioners; (3) it remains questionable whether articles that academics assess to be of high quality are also managerially relevant.

Scientometrics, Citation Analysis, Cite, Referencing, Impact

Abstract:
Increasingly, firms allow consumers to mass customize their products. In this study, the authors investigate consumers' evaluations of different mass customization configurations when they are asked to mass customize a product. For example, mass customization configurations may differ in the number of modules that can be mass customized. In the context of mass customization of personal computers, the authors find that mass customization configuration affects the product utility that consumers can achieve in mass customization as well as their perception of mass customization complexity. In turn, product utility and complexity affect the utility that consumers derive from using a certain mass customization configuration. More specifically, product utility has a positive effect and complexity has a negative effect on mass customization utility. The effect of complexity is direct as well as indirect because complexity also lowers product utility. The authors also find that consumers with high levels of product expertise consider mass customization configurations less complex than do consumers with low levels of product expertise and that for more-expert consumers, complexity has a less negative impact on product utility. The study has important managerial implications for how companies can design their mass customization configuration to increase utility and decrease complexity.

mass-customization, consumer choice, choice models

Abstract:
Technology-intensive markets consist of products that are often interdependent and operate together as a modular system. Although prior research addressed standardization and network externalities in such markets extensively, it has not addressed the buying of modular systems. The authors identify two focal decision dimensions of the buyer, namely the decision whether or not to outsource the system's integration and the decision of how much to concentrate the purchase of the system components to one or more suppliers. They develop a comprehensive production cost and transaction cost framework to explain companies' position on these two decisions. They find that especially leakage and presence of the buyer's know-how, together with the technological volatility it faces drive a buyer's preference for outsourcing system integration and purchase concentration of the system components. An empirical test in the market for telecom systems shows support for the theory developed.

modular systems, high-tech marketing, buying behavior