In increasingly global markets with intensifying competition, companies need to know how new products will diffuse across countries and where they should first introduce those products. Previous studies have used the metric of time-to-takeoff as a way to compare and analyze the innovativeness of nations. But those studies have excluded some of the world’s largest and fastest-growing economies. There is also disagreement about what drives product takeoff—culture or wealth—and which countries can be the best launch pads for new products.
The authors attempt to answer four questions: First, how does time-to-takeoff for new products vary across the developed and developing economies of Asia, Europe, North America, South America, and Africa? Second, what drives the variation in time-to-takeoff across countries? Third, are the differences in time-to-takeoff constant or do they vary? Fourth, is time-to-takeoff converging or diverging across countries?
In their study of 16 new products across 31 countries (430 categories), the authors analyze how and why takeoff varies across products and countries. They test the effect of 12 hypothesized drivers of takeoff using a parametric hazard model. They find that the average time-to-takeoff varies substantially between developed and developing countries, between fun and work products, across cultural clusters, and over time. On this metric of time-to-takeoff, Japan is the most innovative country, followed by the Nordic countries, the U.S., and some countries of midwestern Europe. The authors find that both culture and wealth drive takeoff, along with product class, product vintage, and prior takeoffs. Most important, time-to-takeoff is shortening and takeoff is converging across countries.
The implications are that market strategy should be tailored to the type of product. Fun products, such as CD players, cell phones, or digital cameras, have universal appeal and, hence, would benefit from a sprinkler strategy (simultaneously introducing the new product across countries). Work products, such as dishwashers, microwave ovens, and washing machines, are bound by a country’s culture and would call for a waterfall strategy (staggering the commercialization of new products across countries). Product managers could thus reduce risk and increase the odds of success. The study also has implications on which countries are best for launching or testing a new product first, depending on the managers’ requirements of innovative and large markets versus highly innovative but smaller markets.
Deepa Chandrasekaran is Assistant Professor in Marketing at Lehigh University. Gerard J. Tellis is Director of the Center for Global Innovation, Neely Chair in American Enterprise, and Professor of Marketing at the Marshall School of Business, University of Southern California.This research is featured in the October 2008 issue of Advertising Age.
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