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

  • 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)

Registered author(s):

    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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    File URL: http://dx.doi.org/10.1287/mksc.22.2.188.16041
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    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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    1. Christophe Van den Bulte, 2000. "New Product Diffusion Acceleration: Measurement and Analysis," Marketing Science, INFORMS, vol. 19(4), pages 366-380, June.
    2. Trond Petersen, 1986. "Estimating Fully Parametric Hazard Rate Models with Time-Dependent Covariates," Sociological Methods & Research, , vol. 14(3), pages 219-246, February.
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    7. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    8. Peter N. Golder & Gerard J. Tellis, 1997. "Will It Every Fly? Modeling the Takeoff of Really New Consumer Durables," Marketing Science, INFORMS, vol. 16(3), pages 256-270.
    9. Dipak C. Jain & Naufel J. Vilcassim, 1991. "Investigating Household Purchase Timing Decisions: A Conditional Hazard Function Approach," Marketing Science, INFORMS, vol. 10(1), pages 1-23.
    10. William P. Putsis, Jr. & Sridhar Balasubramanian & Edward W. Kaplan & Subrata K. Sen, 1997. "Mixing Behavior in Cross-Country Diffusion," Marketing Science, INFORMS, vol. 16(4), pages 354-369.
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