Externally Directed and Internally Directed Market Launch Management: The Role of Organizational Factors in Influencing New Product Success

Journal of Product Innovation Management, Vol. 29, pp. 38-52, 2012

Posted: 14 Oct 2014

See all articles by Sabine Kuester

Sabine Kuester

University of Mannheim, Department of Marketing & Innovation

Christian Homburg

University of Mannheim - Department of Marketing; University of Melbourne - Department of Management and Marketing

Silke Hess

Independent

Date Written: December 1, 2012

Abstract

Introducing new products remains a critical challenge for managers. Consumer acceptance of new products is key to new product success and requires the effective implementation of market launch activities. The present study describes the relationship between different types of market launch activities and market-related, time-related, and financial market launch success. The study’s framework extends previous work on launch management by complementing the view that launch activities are predominantly outwardly directed with the notion that launch management can also be inwardly directed. More specifically, launch activities can both target customers as the external audience, for example, via communication and pricing, and address an internal audience, such as management and sales personnel, for example, using departmental coordination or employee incentives. The study also sets out to investigate how situational factors impact the relative effectiveness of both externally directed and internally directed launch activities in engendering successful new product launches. In particular, product newness, technology drivers, and firm size are considered as relevant variables. Structural equation analysis of data on 178 new products across industries provide empirical evidence that market launch success depends on the intensity of both externally directed and internally directed market launch activities. With regard to the overall impact of internally directed activities, the findings confirm that organizational factors and antecedents indeed play a critical role in new product launch and its respective performance with internally directed activities having an even stronger impact on time-related and financial success than outwardly directed instruments. Specifically, these internal activities are often viewed as idiosyncratic resources that are hard for competitors to observe and are therefore more difficult — if not impossible — to replicate compared to externally directed activities in market launch. The paper clearly pinpoints that the successful launch of new products is a complex task that also necessitates the implementation of internally directed launch activities. Fast market penetration requires coordination among the different internal players as well as support from top management. Furthermore, the financial objectives of the market launch can only be met if employees and executives both receive the necessary incentives and support to effectively execute the new product introduction. The study also demonstrates that moderators impact the strength of the effectiveness of these two different types of market launch activities. This research provides important implications for launch management by advocating that the two foci on external and internal constituencies should not be pursued in isolation but that instead, the opposite is true.

Keywords: Product launches, new product development, management, organizational effectiveness

JEL Classification: M31

Suggested Citation

Kuester, Sabine and Homburg, Christian and Hess, Silke, Externally Directed and Internally Directed Market Launch Management: The Role of Organizational Factors in Influencing New Product Success (December 1, 2012). Journal of Product Innovation Management, Vol. 29, pp. 38-52, 2012, Available at SSRN: https://ssrn.com/abstract=2508193

Sabine Kuester (Contact Author)

University of Mannheim, Department of Marketing & Innovation ( email )

Germany

Christian Homburg

University of Mannheim - Department of Marketing ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

University of Melbourne - Department of Management and Marketing

5th Floor Babel Building
Melbourne, Victoria 3010
Australia

Silke Hess

Independent ( email )

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