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The International Takeoff of New Products: The Role of Economics, Culture, and Country Innovativeness

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  • Gerard J. Tellis

    ()
    (Marshall School of Business, The University of Southern California, P.O. Box 90089-1421, Los Angeles, California 90089-1421)

  • Stefan Stremersch

    ()
    (Erasmus University Rotterdam, P.O. Box 1738, Burg. Oudlaan 50, 3000 DR Rotterdam, The Netherlands)

  • Eden Yin

    ()
    (Judge Institute, Cambridge University, Trumpington Street, Cambridge CB2 1AG, UK)

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    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.

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    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 22 (2003)
    Issue (Month): 2 (October)
    Pages: 188-208

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    Handle: RePEc:inm:ormksc:v:22:y:2003:i:2:p:188-208

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    Related research

    Keywords: International New Product Growth; New Product Takeoff; New Product Growth; International Diffusion; Diffusion of Innovations;

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    Cited by:
    1. Edlira Shehu & Tim Prostka & Christina Schmidt-Stölting & Michel Clement & Eva Blömeke, 2014. "The influence of book advertising on sales in the German fiction book market," Journal of Cultural Economics, Springer, vol. 38(2), pages 109-130, May.
    2. Deleersnyder, B. & Dekimpe, M.G. & Sarvary, M. & Parker, P.M., 2003. "Weathering Tight Economic Times: The Sales Evolution Of Consumer Durables Over The Business Cycle," ERIM Report Series Research in Management ERS-2003-046-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Delre, S.A. & Jager, W. & Bijmolt, T.H.A. & Janssen, M.A., 2007. "Targeting and timing promotional activities: An agent-based model for the takeoff of new products," Journal of Business Research, Elsevier, vol. 60(8), pages 826-835, August.
    4. Nora Lado & Fabrizio Cesaroni & Alberto Maydeu Olivares & Han Chiang Ho, 2011. "Understanding the role of attitude components in co-branding: an application to high-tech, luxury co-branded products," Business Economics Working Papers id-11-01, Universidad Carlos III, Instituto sobre Desarrollo Empresarial "Carmen Vidal Ballester".
    5. Hernández-Mireles, C. & Fok, D. & Franses, Ph.H.B.F., 2008. "The Triggers, Timing and Speed of New Product Price Landings," ERIM Report Series Research in Management ERS-2008-044-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Stremersch, S. & Lemmens, A., 2008. "Sales Growth of New Pharmaceuticals Across the Globe: The Role of Regulatory Regimes," ERIM Report Series Research in Management ERS-2008-026-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Grajek, Michał & Kretschmer, Tobias, 2012. "Identifying critical mass in the global cellular telephony market," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 496-507.
    8. Laciana, Carlos E. & Rovere, Santiago L. & Podestá, Guillermo P., 2013. "Exploring associations between micro-level models of innovation diffusion and emerging macro-level adoption patterns," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(8), pages 1873-1884.
    9. Franses, Ph.H.B.F., 2009. "Forecasting Sales," Econometric Institute Research Papers EI 2009-29, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    10. Towhidul Islam & Nigel Meade, 2011. "Detecting the impact of market factors on sales takeoff times of analog cellular telephones," Marketing Letters, Springer, vol. 22(2), pages 197-212, June.
    11. Lee, Jong-Ho & Garrett, Tony C. & Self, Donald R. & Findley Musgrove, Carolyn S. ("Casey"), 2012. "Expressive versus instrumental functions on technology attractiveness in the UK and Korea," Journal of Business Research, Elsevier, vol. 65(11), pages 1600-1605.
    12. Ewa, Lechman, 2010. "Digital divide – inequalities in level of implementation of new information and telecommunication technologies. Cross country study," MPRA Paper 37483, University Library of Munich, Germany.

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