The authors examine the impact of virtual word-of-mouth (vWOM) communication on willingness to pay (WTP) for an innovation. A series of hypotheses are developed that link vWOM to the credibility of innovation information, perceived utilitarian value, and the perceived hedonic value of an innovation, which are in turn hypothesized to influence WTP. The authors test these hypotheses using data collected in Japan from 658 potential adopters of e-readers and from 565 potential adopters of smartphones. Findings indicate that, in both samples, vWOM is positively correlated with the perceived credibility of innovation information, which in turn is positively correlated with both perceived utilitarian value and perceived hedonic value. WTP is also positively correlated with an innovation's perceived utilitarian and perceived hedonic value. In addition, the path between vWOM and perceived hedonic value is positive and significant in both samples. However, the path between vWOM and perceived utilitarian value is positive and significant in the smartphone sample, but not in the e-reader sample. The empirical findings provide support for theoretical arguments that link WTP for complex consumer electronic products to consumer perceptions of utilitarian and hedonic value. The results also have important implications for the creation of vWOM strategies designed to reduce the price sensitivity of potential adopters.

This paper examines the role of three indirect mechanisms linking word-of-mouth communication with one of the most important innovation attributes influencing the adoption decision: perceived usefulness. The authors hypothesize that word-of-mouth (WOM) communication impacts perceived usefulness by influencing potential adopter perceptions of the credibility of innovation information, the size of the adopter population, and the availability of complementary products. To test these hypotheses, the authors analyze the survey responses of over 550 potential adopters of e-readers and smartphones. In both product samples, the perceived credibility of WOM information is positively related with perceived usefulness, which is positively related with purchase intent. Consistent with theoretical arguments regarding the importance of access to expert information sources, findings indicate that, relative to personal WOM, written and virtual WOM have stronger relationships with consumer perceptions of the credibility of innovation information. In addition, in both samples, perceived usefulness is positively related with the perceived availability of complementary products, which is positively related with both personal and written word-of-mouth. Finally, perceived usefulness has (1) a direct relationship with the perceived size of the local adopter population in the e-reader sample and (2) an indirect relationship with the same variable that is mediated by the perceived availability of complementary products in both samples. In turn, the perceived size of the local adopter population is positively related with exposure to personal word-of-mouth.

The authors examine the impact of word-of-mouth communication on innovation use. Hypotheses are developed linking both personal and virtual word of mouth (vWOM) directly to innovation use. The authors also examine the mediating role of two additional variables that link word of mouth and innovation use. Existing research suggests that personal word of mouth (pWOM) indirectly influences intensity of innovation use through its impact on consumer perceptions of the size of local adopter population. In addition, both personal and virtual word-of-mouth influence should be positively associated with consumer perceptions of the availability of complementary products, which prior studies have linked to variety of innovation use.
The authors test these hypotheses using data collected from 247 Japanese adopters of new-generation portable gaming devices. Findings indicate that both personal and virtual word of mouth are directly related with variety of innovation use, which is in turn related with intensity of use. In addition, pWOM is positively related with both intensity of use and variety of use through its impact on consumer perceptions of (1) the perceived size of the local adopter population and (2) the availability of complementary products. In contrast, through these same two paths, vWOM is negatively related with both intensity of use and variety of use.

This paper extends the Technology Acceptance Model (TAM) to incorporate the impact of personal and virtual word-of-mouth (pWOM and vWOM). The authors hypothesize that both types of word-of-mouth will be positively related with consumer perceptions of innovation usefulness and perceived ease of use. In addition, the authors examine two competing hypotheses regarding the relative impact of pWOM and vWOM on perceptions of innovation attributes. One hypothesis argues that potential adopters place more weight on pWOM sources because they perceive relatively more similarity between themselves and pWOM sources. The alternative hypothesis argues that potential adopters place more weight on vWOM sources because those sources (relative to pWOM sources) expose potential adopters to a wider variety of information and a larger number of experts. Finally, the authors argue that symbolic product usage will enhance the relationship between word-of-mouth and consumer perceptions of innovation attributes. These hypotheses are tested using data collected in Japan from over 600 potential adopters of Blu-ray DVD recorders and smart phones. Findings indicate that, in both product categories, pWOM and vWOM are positively and significantly related with perceived ease of use. Moreover, in both samples pWOM is positively and significantly related with perceived usefulness, while vWOM is significantly related with perceived usefulness only in the smart phone sample. With regard to the relative impact of pWOM and vWOM on perceptions of innovation attributes, results indicate that vWOM has a larger impact on potential adopter perceptions of ease of use. Finally, the estimated model provides support for the hypothesis that symbolic consumption increases the impact of word-of-mouth on perceptions of innovation attributes. In particular, findings indicate that the impact of pWOM on perceptions of innovation usefulness is higher among potential adopters of smart phones than among potential adopters of Blu-ray DVD recorders. Similarly, the impact of vWOM on perceptions of ease of use is higher among potential smart phone adopters than among potential adopters of Blu-ray DVD recorders.

New venture companies, starting from small entities comprising entrepreneurs and their teams, start to grow in scale by instigating formalized processes to enhance management efficiency. This includes the use of formalized processes for collecting and disseminating market information. Despite the fact that utilizing market information is one of the fundamental factors of market orientation, little is known about the way market information is processed in new venture companies. The first aim of this research was to investigate the impact of formalized market information acquisition and utilization on new venture performance. The second objective was to investigate the effect of organizational formalization on the acquisition and utilization of market information in new venture firms. The final goal was to explore the extent to which these relationships vary in different cultural contexts. Based on an extensive literature review and interviews with managers in China, Japan, and the United States, a conceptual framework is developed that relates formalized market information processes to new venture performance in the three countries. The conceptual model is tested with data collected from 453 new venture companies in these countries. The results suggest that the use of a formalized process of market information utilization has a positive effect on new venture performance regardless of country. The analysis also indicates that the effect of organizational formalization, in general, differs between countries. Organizational formalization is associated with increased formalized utilization of market information only in the United States; the relationship does not apply in the two Asian countries studied. Taken together, these results suggest that in the Asian countries, organizational formalization improves information collection, while in the United States, it also improves the utilization of information throughout the organization. One implication of these results may be the potential of added benefits accruing to organizational formalization in new ventures in countries with high levels of individualism and/or high levels of power distance, where organizational power is concentrated in formal vertical reporting relationships, as opposed to informal horizontal peer-to-peer networks.

2011/12/

Although information technology (IT,) tools for new product development (NPD) are widely available, prior studies have found the usage of IT to be limited to large-sized firms (cf. Barczak and Sultan, 2006), but increasing (Cooper, 2007). Extant research indicates that several factors influence IT usage, including the existence of a champion and NPD process formalization ( Barczak, Sultan, and Hultink, 2007; Barczak, Hultink, and Sultan, 2008). In addition, the antecedents to IT usage have been found to vary among countries ( Barczak, Hultink, and Sultan, 2008); that is, they are context-specific.
This study extends prior research by exploring the factors that facilitate and/or inhibit IT usage for NPD in Japanese firms. Japan was chosen for this study because it has been argued that, in order to develop generalized NPD theories applicable across different nations or cultures, further understanding is needed about countries other than North American and Western European countries (Song and Parry, 1996; Song, Kawakami, and Stringfellow, 2010). Additionally, the culture of Japan is known for being very different from North America and other Western countries, particularly in terms of Japan's relative emphasis on the collective as opposed to the individual; high in uncertainty avoidance as opposed to low uncertainty avoidance; and long-term orientation rather than short-term orientation ( Hofstede, 2005; Kawakami, Maclachlan, and Stringfellow, forthcoming).
The lack of research in Japan on IT and NPD implied the need for an exploratory, grounded theory approach to this study. Using a multiple case study method, the authors conducted semi-structured interviews with 35 marketing, R&D, and IT managers and executives in 19 firms in a variety of industries.
Based on the analysis of the interview data and the follow-up surveys, the authors propose that ten factors in five categories, namely, strategic factors, market environment factors, development process factors, organizational factors, and technology-human interaction factors, are likely to influence IT usage for NPD in Japanese companies. Specifically, product innovativeness, extent of global engagement, formalized IT ROI measure, standardization of NPD activities, physical proximity, resistance to change, CIO as an executive sponsor, sensory requirements, perceived ease of use, and perceived usefulness are expected to influence IT usage.
From a theoretical perspective, this study extends prior research on IT usage by expanding the cultural context beyond North America and Western Europe by focusing on an Asian country, namely Japan. It also adds to the limited research that integrates national culture and NPD and enables the development of a conceptual model that could be tested empirically.

2011/9/

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This article shows a conceptual model about the organizational use of information technology (IT) tools in new product development (NPD) in business enterprises. This model is based on the organizational contingency theory, proposing that the gap between IT need and usage affects IT usage performance, which in turn influences NPD performance. IT need is determined by environmental uncertainty, organizational strategy and the quality of the project. IT usage is defined by the scope, frequency and lifecycle of IT tool use, which is affected by technological, financial and organizational factors. The positive research regarding the use of IT tools in new product development has only recently begun to accumulate. Therefore, this article contributes to the evolution of this research in that it attempts to propose a model that encompasses various factors by integrating IT usage model in the organization, the technology acceptance model (TAM) and the model of division integration in new product development.

The marketing-manufacturing interface is important to the success of product development. This research investigates the effect of senior management policies on the effectiveness of the marketing-manufacturing interface. Based on existing literature, a conceptual framework is developed that relates senior management policies, marketing-manufacturing involvement, and new product performance. The proposed framework is contingent on the national culture of the country in which product development occurs. Structural equation modeling is used to test the framework with data from a sample of 146 U.S. marketing managers and 185 Japanese marketing managers. The results suggest that a number of senior management policies are effective in promoting joint involvement between the marketing and manufacturing functions during the innovation process. While the use of formal cross-functional integration policies was found to promote marketing-manufacturing involvement both in the United States and Japan, team leader autonomy, team rewards, and job rotation were found to promote marketing involvement in the United States but not in Japan. On the other hand, promoting marketing-manufacturing involvement via goal clarity and promotion of teamwork proved to be effective in Japan. The results have a number of implications for product development practice. Foremost among these is the finding that, despite the fundamental ideological differences separating the marketing and manufacturing functions, senior management policies can enhance the level of marketing-manufacturing involvement, and consequently can improve the likelihood of new product success. The second implication is that the effectiveness of specific senior management policies depends on national culture. Thus, managers wishing to improve the marketing-manufacturing interface should select the policies that match the culture in which the product development project is located.

2009/8/

Research on network externalities has identified a number of product categories in which the market performance of an innovation (e.g., unit sales and revenues) is an increasing function of that innovation's installed base and the availability of complementary products. Innovation scholars have attributed these findings to the positive impact of network externality variables on consumer perceptions of innovation attributes. This paper provides the first empirical examination of these perceptual linkages by extending the Technology Acceptance Model to include consumer perceptions of network externality variables. The authors hypothesize that, when direct and indirect network externalities exist, consumer purchase intentions and consumer perceptions of an innovation's usefulness and ease of use will positively reflect perceptions of installed base size and the availability of complementary products. To test this reasoning, the authors developed new measures of consumer perceptions of network externality variables. These measures were incorporated into a survey that explored the attitudes in Japan of potential adopters toward digital music (DM) players at an early stage in the product life cycle. Findings reveal a direct positive relationship between ease of use and the perceived availability of digital music. The authors also find positive and significant relationships between both purchase intention and perceived usefulness and (1) the perceived size of the DM player installed base and (2) the perceived availability of digital music. An application of the Baron-Kenny test for mediating variables reveals that (1) ease of use partially mediates the relationship between the perceived availability of digital music and perceived usefulness and (2) perceived usefulness partially mediates the relationship between the perceived availability of digital music and purchase intention. The research has important implications for future research on new product adoption and for the management of innovations that involve network externalities. The conceptual model provides a framework for testing alternative explanations of observed variations in the impact of network externalities within and across product categories. The empirical analysis provides guidance for managers who wish to manage the impact of network externalities on adoption. In addition to stimulating the size of the installed base and the variety of complementary products, executives must also manage consumer awareness of network externality variables and consumer understanding of the relationship between those variables and innovation attributes. Finally, traditional adoption models link consumer adoption decisions to perceptions of innovation attributes. The findings provided here imply that predictive accuracy of these models can be improved by including consumer perceptions of network externality variables.

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