Understanding a Two-Sided Coin: Antecedents and Consequences of a Decomposed Product Advantage
AbstractThis article investigates the antecedents and consequences of two product advantage components: product meaningfulness and product superiority. Product meaningfulness concerns the benefits that users receive from buying and using a new product, whereas product superiority concerns the extent to which a new product outperforms competing products. The authors argue that scholars and managers should make a deliberate distinction between the two components because they are theoretically distinct and also have different antecedents and consequences. The authors collected data through an online survey on 141 new products from high-tech companies located in the Netherlands. The results reveal that new products need to be meaningful as well as superior to competing products in order to be successful. This finding is consistent with the prevailing aggregate view on product advantage in the literature. However, the results also show that the effects of the two components on new product performance are moderated by market turbulence. Although each component is important in that it forms a necessary precondition for the other to affect new product performance under circumstances of moderate market turbulence, meaningfulness is most important for new product performance in turbulent markets where preferences have not yet taken shape. In contrast, when markets become more stable, the uniqueness of meaningful attributes decreases and new products that provide advantage by fulfilling their functions in a way that is superior to competing products are more likely to perform well. In addition, the study shows that the firmâ€™s customer and competitor knowledge processes independently lead to product meaningfulness and superiority, respectively. The findings also reveal that under conditions of high technological turbulence, the customer and competitor knowledge processes complement each other in creating product meaningfulness and superiority. This implies that the level of technological turbulence puts requirements upon the breadth of firmsâ€™ market knowledge processes in order to create a new product with sufficient advantage to become successful. The authors conclude that neglecting the distinction between product meaningfulness and superiority when assessing a new productâ€™s advantage may lead to an incomplete insight on how firms can improve the performance of their new products.
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Bibliographic InfoPaper provided by 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. in its series Research Paper with number ERS-2008-074-ORG.
Date of creation: 11 Nov 2008
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product meaningfulness; product superiority;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
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