Section 6: Product management

Some of the abstracts featured in this penultimate section include: a survey on launching replacement products; managing brand portfolios; and a summary of concurrent engineering.

Profiling technology diffusion categories

J.R. Taylor + others in Journal of Business Research (USA), Oct-Nov 94 (32/2-3): p. 155 (8 pages)

Provides an empirical test of two models of technological adoption by small businesses, describing the models - a benefit - price model and a psychographic model - and testing them with exploratory research among US small business customers of Hewlett-Packard's laser printers from 1985 to 1990. Finds that benefits and price are better indicators of buyer adoption than psychographic factors. Concludes that the findings have profound implications for companies selling new technology products and flags up future conclusive research. An interesting, if rather limited, academic study with some significance for hightechnology marketers. BG52

A second look at Japanese product development

R.R. Kamath + J.R. Liker in Harvard Business Review (USA), Nov-Dec (72/6): p. 154 (11 pages)

Contends that many managers, worldwide, who are adopting Japanese-style management practices, such as using fewer suppliers, forging long-term relationships with them, encouraging their continuous improvement, and involving them in design and development, have an incomplete understanding of such arrangements and are thus unable to obtain their full benefits; maintains that successful partnerships depend on gaining the right balance among a supplier's technological capabilities, the customer's willingness to share information and both companies' strategic requirements. Explores four roles that suppliers can adopt - partners, mature full-system suppliers, child and contractual - each carrying different responsibilities for suppliers and customers during product development; analyses how these relationships work in practice, and offers advice to suppliers on relationships with customers hoping to develop product development alliances on the Japanese model. BH53

MIPS - managing industrial positioning strategies

H. Muhlbacher + others in Industrial Marketing Management (USA), Oct 94 (23/4): p. 287 (11 pages)

Proposes a model of how to structure the product positioning process in industrial markets, having reviewed and discussed existing approaches including the use of segmentation as a strategic tool, competitive analysis and differentiation, noting their benefits. Shows how the model starts with an analysis of actual and potential customers, and demonstrates how it can be implemented by way of a case study of an Austrian industrial engineering and construction company. BH78

Using knowledge-based systems for strategic market assessment

M.J. Liberatore + A.C. Stylianou in Information & Management (Netherlands), Oct 94 (27/4): p. 221 (12 pages)

Explains the need to be able to evaluate ongoing product development projects, and reviews the literature on such evaluation and selection techniques; presents a model for the development of a knowledge-based market evaluation system and demonstrates its use at Armstrong World Industries, an industry leader in flooring products. Traces the various stages from knowledge acquisition and modelling, knowledge representation and prototype development, system validation and verification, to system implementation and use, and maintenance as a result of continued learning. Reports the successful use of the system at Armstrong and concludes that its continued use is testament to the merits of the approach. BH89

Marketing and technology strategy in a "medium-tech" startup

H.C. Lucas in Information & Management (Netherlands), Oct 94 (27/4): p. 247 (11 pages)

Argues that the traditional models of "technology push" innovation and "market pull" innovation do not meet the demands of "medium-tech" companies whose products are technological in nature, but where competition in the marketplace is intense; proposes a model of innovation for such companies, having first reviewed past research into the subject. Contends that marketing and technological strategy must be considered concurrently, and presents a case study to illustrate the success of such an approach. Gives a brief history of the studied company, the product it sells, and how it developed that product and delivered it to the market; isolates the success factors involved, and shows how the company scores over its competitors. BH90

The UK in the economic world cup

R.G. Humphreys + W. Shaw-Taylor in Management Accounting (UK), Sep 94 (72/8): p. 34; Oct 94 (72/9): p. 18 + Nov 94 (72/10): p. 26 (10 pages)

In response to the UK government's white paper on British competitiveness, explains the objective measures used to gauge economic performance - gross domestic product (GDP) or value added - and shows where the UK stands in the economic world tables (in the third division - or is that the "new" second division if you include the Carling Premiership?); describes the brand routes to improving economic performance, including some of the popular ideas, which when the results are measured may tend to be counterproductive. Illustrates how firms can maximize the direct value added by each product and the product mix they produce, and thus improve their contribution to the national score; stresses the importance of design in increasing value added. Finally suggests ways to maximize value added per employee by reducing the amount of work carried out on each task and lists some of the human resource (e.g. brainstorming), analytical (e.g. activity sampling) and numeracy (e.g. Pareto analysis) skills that can be employed to help reduce labour waste. BJ53

A clear line to the top (product launch)

H. Lane Fox in Marketing (UK), 13 Oct 94: p. 28 (1 page)

Traces the successful launch of the adult soft drink Caledonian Clear, by UK entrepreneur Joe Woods, relating how he developed and launched the product on a shoestring, and how he shunned traditional product launch approaches. Indicates that the product's success was achieved through competitive pricing and gaining listings in supermarket and off-licence chains. It's nice to see a small guy win in a FMCG market - a pity the case study is so brief BK11

Product replacement: strategies for simultaneous deletion and launch product

J. Saunders + D. Jobber in The Journal of Product Innovation Management (USA), Nov 94 (11/5): p. 433 (18 pages)

Considers the marketing situation in which one desires to phase out an old product as one launches a replacement and runs through 11 alternative ways of doing this, with named product examples. From a survey, tries to relate the choice of strategy to factors in the competitive environment, such as the market, the nature of the product and the competitors, but admits to difficulties in drawing conclusions; throws more light on the relationships by performing a cluster analysis that yields four major strategy alternatives (out of the original 11), but even so acknowledges that there was, in the companies surveyed, no significant difference in the success rates for the four. Suggests avenues for further research. Despite the rather inconclusive results, a wellplanned and thoughtful venture into largely unexplored territory. BK95

Managing brand portfolios: how the leaders do it

S. Laforet + J. Saunders in Journal of Advertising Research (USA), Sep/Oct 94 (34/5): p. 64 (13 pages)

Examines the ways in which European and US firms approach branding of their products, both individually and in product groups, and reviews the literature relating to branding issues, highlighting Olins' corporate indentity structures: monolithic, endorsed and branded. Describes a survey of senior marketing managers which was used in conjunction with a content analysis of brand packaging to build up a picture of brand structures, and presents the findings in terms of brand types and hierarchies, analysing them according to corporate brand profiles and the question of brand strength versus brand usage. Outlines the possible choices for brand strategies, including corporate brands, house brands, mono brands, furtive brands and corporate-driven branding. A wideranging review and analysis, plenty of well-known examples and interesting ideas for development. BM31

Towards commercial and environmental excellence: a green portfolio matrix

B.W Lee + K. Green in Business Strategy and the Environment (UK), Autumn 94 (3/3): p. 1 (9 pages)

Examines product strategy with the aim of achieving both commercial and environmental excellence, and studies in turn the strategic approach to environmental management and the environmental approach to product strategy, using figures and models to explain the thinking. Reviews commercial concerns and develops a green portfolio matrix to investigate relationships between environmental response and commercial performance; explores in depth the four sustainable segments of the portfolio matrix, the bread and butter, nimble, leadership and pioneer strategies for commercial success alongside environmental excellence, drawing on commercial examples such as 3M and Volkswagen. BM55

Assessing the innovativeness of organizations and its antecedents: Project Innovstrat

G.J. Avlonitis+ others in European Journal of Marketing (UK), Vol 28 No 11 94: p. 5 (24 pages)

Introduces research aimed at determining the success rates and the influencing factors behind successful product innovations; discusses the critical role of technological innovation and reviews previous research. Examines existing concepts of innovativeness which are based on factors such as elapsed time of adoption, subjective measures, adoption/non-adoption and number of innovations; puts forward arguments against extant concepts, and presents the findings from a research study of alternative conceptualization and measurement of organizational innovativeness (the Project Innovstrat of the title), based on findings relating to Greek manufacturing industry. Proposes a five-factor model including technological innovation challenges, strategic innovation intentions, product innovativeness, innovativeness of core machinery and innovative leadership. BN26

Speed to global markets: now product success in the ethical pharmaceutical industry

P.-L. Yeoh in European Journal of Marketing (UK), Vol 28 No 11 94: p. 29 (21 pages)

Maintains that innovation and creativity are critical elements of a firm's new product development programme and highlights their particular significance in industries with high R&D priorities; proposes that new product efforts should be devoted to the development of new chemical entities (NCEs). Identifies five varibles that are likely to influence a pharmaceutical firm's ability to develop global NCEs, namely technological familiarity, product differentiation, competitive intensity, source of technology and national origin of the firm. Puts forward a model based on these variables and discusses the implications for implementation. BN27

Fall-out from a product flop

R. Oram in Financial Times (UK), 19 Jan 95: p. 10 (1 page)

The flop of the title was Unilever's Persil Power. Its problem? It damaged products in the wash, as rival Procter & Gamble was only too keen to let consumers know. Consequently, lessons have been learned, among them - test products extensively and don't neglect the brand. And now Unilever has introduced New Generation Persil, but this against a background of confusion among consumers, branded (sic) as "sloppy washers" (poor devils who mistakenly believe one product will provide all their washing needs). Somehow the mangle wash seemed so much simpler BN41

Concurrent engineering: criteria for effective implementation

H.J. Thamhain in Industrial Management (USA), Nov/Dec 94 (36/6): p. 29 (3 pages)

Argues that, as product life cycles shorten, time-tomarket has become a critical measure of corporate performance; lists the advantages of using the concept of concurrent engineering in new product development and develops criteria for its effective implementation. Identifies the conditions necessary for the effective technology transfer that is so vital for the development of cross-functional teams, which should be in place before the project is defined. A succinct summary of the essentials of concurrent engineering BN68

Beyond ABC: target costing for profit enhancement

J.M. Brausch in Management Accounting (USA), Nov 94 (76/5): p. 45 (5 pages)

Defines the target cost as the price customers are willing to pay for a product less the profit the manufacturer must receive for making that product, and states that target costing reverses several decades of American (Western) pricing strategy by taking into account the fact that customers do not care about manufacturers' costs, only their own. Explains how a US textile manufacturer went about implementing a target costing system which began by recognizing the differences between managerial and financial accounting, and adopting the philosophy of getting "product costs as close to actual as possible". Reports that the company has been able to reduce costs and enhance profits by implementing target costing at the product design stage, so that new product introductions must meet certain profit targets (if targets are not met, then the products are redesigned); illustrates how profits are measured. B028

Branding takes the credit

W Marx in Management Review (USA), Nov 94 (83/11): p. 33 (4 pages)

Charts the movement of the credit card industry into cobranding, marrying a card issuer (probably a bank) with a company in search of a boost to its market share; demonstrates that this is typically a response to the saturated credit card market and has been pursued by companies such as General Motors and Shell. Explores the marketplace for such cards in the USA and, in a separate box, gives some pointers for developing lasting customer relationships, based on those companies which are already co-branding. Predicts the growth of multiple partnerships in the industry, together with "themed" programmes. B034

Getting every employee into the (innovation) act

J. Hartlaub in Research Technology Management (USA) Nov/Dec 94 (37/6) p. 41 (5 pages)

Demonstrates how Medtronic Inc. (medical products) has attempted to involve every employee in innovation through its Quest programme, whereby every year each individual is actively encouraged to put forward new product proposals; describes the selection process for these contributions and the arrangements for the proposer's continuing involvement when and if funding is authorized. Discloses that over six years 27 of 251 proposals have received funding with very encouraging results in themselves, apart from the programme's contribution to the general innovative climate that the company is trying to foster. A formal way of by-passing the "not invented here" syndrome. BQ11

Implementing quality function deployment:. a system approach

Y. Kathawala + J. Motwani in The TQM Magazine (UK), Vol 6 No 6 94: p. 31 (5 pages)

Reviews the origins of the emerging quality tool for new product development and innovation, quality function deployment, incorporating the potential benefits (chiefly that of ensuring customer input), some prerequisites and key components of the model; includes a straightforward system map of the process that may form the basis for internal communication if such a difficult technique is to be implemented. As a taster, lists some improvements in lead times, costs and other parameters claimed to be the result of QFD initiatives. BQ26

Strategic issues in product recovery management

M. Thierry + others in California Management Review (USA), Winter 95 (37/2): p. 114 (22 pages)

Defines product recovery management (PRM) as the management of all used and discarded products, components and materials that fall under the responsibility of a manufacturing company, with the objective of recovering as much as possible of their economic and ecological value, thus reducing waste - as opposed to the traditional approach of ignoring them; outlines the opportunities available to companies that succeed in PRM and support the idea of an effective policy. Classifies the information necessary for analysing PRM issues into four categories of product, return flows, reprocessing markets and product recovery/waste management operations - which are defined as repair, refurbishing, remanufacturing and cannibalization. Presents a case study of such activities undertaken by CopyMagic, a multinational copier manufacturer, BMW and IBM, and studies implications for management in areas of data acquisition, product recovery options, setting measurable objectives, product redesign, and cooperation with other members of the business chain and with companies operating in the same market. All you need to know about product recovery - formerly a shrinking violet in the field of marketing literature. BR47

Private brands: major brand perspective

S. Nandan + R. Dickinson in Journal of Consumer Marketing (UK), Vol 11 No 4 94: p. 18 (11 pages)

Focuses on the increasing power of private brands (PB) sold by retailers, identifying a number of factors that have contributed to their successful development; illustrates the kinds of role that PBs have played for retailers, but claims that it is not in the retailers' interests to turn totally to supplying PB on the grounds that consumers are seeking choice and variety. Proposes a model for the major brand supplier to follow in order to counter the threat from PB growth. Makes some sound points. BR76

Diversification: exploiting the flow of technology

S. Sjolander + C. Oskarsson in International Journal of Technology Management (Switzerland), Vol 10 No 195: p. 21 (10 pages)

From a survey of 57 large technology-based firms in Europe, the USA and Japan over 11 years, classifies their approaches to growth and diversification; creates a flowchart model of the diversification process based on the previous analysis and shows that increasing technology diversification as a precursor to product diversification is the winning formula. Demonstrates, with particular reference to named Swedish firms, that those companies that followed this path were much more successful than others. Persuasive, despite the fact that the meaning of "technology diversification" is not explained and is most unclear to your abstractor. BT20

Flying high (customer loyalty)

R. Dwek in Marketing (UK), 8 Dec 94: p. 26 (2 pages)

Announces that UK loyalty scheme, Air Miles, is developing a fully electronic system for its client companies centred on a user database; enumerates the benefits to clients and air mile collectors, and argues that the database will make a much more powerful and effective scheme. Outlines the effects of this change and lists some of the organizations switching to the new electronic system. A sign of the times and a chance for some powerful database marketing BT82

Transforming brand management from a functional activity into a core process

S. Knox in Journal of Marketing Management (UK), Oct 94 (10/7): p. 621 (12 pages)

Investigates ways in which brands have traditionally been developed and argues for a change in the development process; maintains that there has been a shift towards an integrated brand process and demonstrates that this integration of the brand will lead to it being viewed as a dominant core process. Describes the integrated brand value chain consisting of zones based on the company brand, category management and customer loyalty management, and reviews these developments in integrating brands and the relationship with the firm's primary stakeholder groups. Some good points here, well presented. BT90

Reframing the process of new product development: from "stages" models to "blocks" framework

M. Saren in Journal of Marketing Management (UK), Oct 94 (10/7): p. 633 (11 pages)

Contends that the traditional six-stage model of new product development is no longer applicable, criticizing from a number of perspectives and looking at other development models that have emerged. Proposes a new approach based on a number of blocks rather than stages, taking into account internal as well as external functions, and provides a case example of this approach applied to an unnamed producer of high-quality inspection equipment. BT91

The new DFM: design for marketability

G. Zaccai in World Class Design to Manufacture (UK), Vol 1 No 6 94: p. 5 (7 pages)

Maintains that, with nearly all manufacturing organizations adopting the TQM approach, reduction of customer dissatisfaction is no longer enough and that design for manufacture, with its aims of quality improvements and cost reductions, has to be replaced by design for marketability; emphasizes the need for multidisciplinary design teams and recommends a stepwise approach in which the customer is included as part of the design process. Discusses the advantages of including outside consultants in the design team and details the requirements of the selection process. Something of an advert for the author's business, but no less interesting for that. BV15

Design for producibility in Swedish manufacturing industries

M. Carlsson + M. Egan in World Class Design to Manufacture (UK), Vol 1 No 6 94: p. 27 (6 pages)

Reports on the results of 15 studies in 7 Swedish manufacturers as to their use of design for producibilty and gives some examples of the benefits gained using a number of criteria. Concludes, surprisingly as these were world-class companies including Volvo, Electrolux and Husqvarna, that their knowledge and use of different rationalization tools was very limited, particularly on the part of those involved with product development, and was almost non-existent among production personnel; discusses the reasons for this. So much for the reality of cross-functional teamworking using concurrent engineering in new product development. BV16

Supplier integration

A. Lee-Mortimer in World Class Design to Manufacture (UK), Vol 1 No 6 94: p. 39 (5 pages)

States that a major part of the Japanese lean manufacturing philosophy has been to develop supplier relationships, even extending to provision of design capability in this way, and flags up the advantages gained by the Japanese auto industry in this regard compared with their US counterparts. Believes that western industry is now moving in the right direction, as indicated by increased use of "black box sourcing", and reports on two preliminary pieces of research in this area. Concludes that the auto industry is making most of the running, but that research on greater supplier integration into the product development process is proceeding in other industries. BV17

Brand building and the agency

S. Gatfield in Admap (UK), Jan 95 (30/1): p. 23 (3 pages)

Outlines the ways in which agencies need to consider branding developments in determining their organizational structures; uses a number of high profile brands such as Marlboro and Coca-Cola to illustrate the key points involved, including the adoption of a strategic perspective. Highlights the importance of creating identity and personality combined with performance to build markets. Suggests that agencies need to become much more than just sources of creativity and stresses the necessity of developing an appropriate skills base. CA15

P. Norman + others in Financial Times (UK), 18 Apr 95: p. 1 (23 pages)

Presents the Spring edition of the FT's comprehensive analysis of the key issues in export activities; surveys the need for trade liberalization, the effects of economic growth and the single currency debate. Outlines a series of case studies on "exporters in action", which analyses how various countries have successfully penetrated overseas' markets. Details the extent of export-led growth in eastern Europe and goes on to consider opportunities for European exporters in sub-Saharan Africa. Studies the current methods of financing exporting, looking at World Bank guarantees, countertrade, payment transfers and credit ratings, and concludes by assessing the problems of counterfeiting. CB28

Tools for teams addressing total customer satisfaction

B. Peck in Industrial Engineering (USA), Jan 95 (27/1): p. 30 (3 pages)

Focuses on the benefits of a concurrent engineering approach to new product development rather than the conventional, sequential approach; sets out the steps used in the latter and exposes weaknesses. Based on experience in the author's company, Mine Safety Appliances, details a concurrent procedure for product development by teams, emphasizing throughout the paramount objective of customer satisfaction, which includes the use of quality function deployment, the house of quality, benchmarking, risk and cost analysis. Suffers from a slightly misleading title. CB54

Segmentation, differentiation, and flexible pricing: experiences with information technology and segment-tailored strategies

E.K. Clemons + B.W. Weber in Journal of Management Information Systems (USA), Autumn 94 (11/2): p. 9 (28 pages)

Considers the ways in which information technology changes the value of marketing information and gives two examples of markets - credit cards and long-distance telecommunications - in which detailed transaction data can help existing suppliers to outperform newcomers. Analyses the strategic implications of segmentation, differentiation and flexible pricing, and the effects IT has on these, and studies the case of AT&T versus MCI in US long-distance telecommunications to illustrate the importance of flexible pricing; of the Inter-Continental Hotel chain to show how microsegmentation can be effective; of competition in the US airline market to demonstrate the effects of "skimming the cream"; and of the New York Stock Exchange to flag up the advantages of abandoning a "one fits all" policy. In all cases, draws attention to the importance of information and IT. Also describes Barclays de Zoete Webb's Beatrice transactiontracking system and IT at US travel agents Rosenbluth to illustrate competitive advantage through IT, and concludes with a discussion of strategy and managerial implications. CC23

Product design and the pricing decision: a sequential approach

R. Tatham + others in Journal of the Market Research Society (UK), Jan 95 (37/1): p. 5 (12 pages)

Proposes the use of a sequential approach to the development of product and pricing decisions rather than a conjoint or choice model method; considers the issues of product consideration, price perceptions and willingness to pay in product building. Discusses the questions relating to the inclusion of base and optional features and describes the application of the techniques to a case study based on the development and marketing of an innovative line of electronic home entertainment products. CC39

Utility. the key to understanding markets

P.C. Hutchinson + L.J. Marchant in Journal of the Market Research Society (UK), Jan 95 (37/1): p. 35 (15 pages)

Delineates the application of the Optima Consumer Choice Model to give an understanding of how markets work; bases this model on the assumption that consumers buy brands that suit them best at that particular time of purchase. Shows how it is possible to predict the effects of different market scenarios through the building of a dynamic model and applies the suggested model approach to two case studies based on the chocolate biscuit and breakfast cereal markets. Finally, discusses issues such as brand portfolio analysis and the implications for advertising. CC40

Organizing for effective new product development: product innovativeness

E.M. Olson + others in Journal of Marketing (USA), Jan 95 (59/1): p. 48 (15 pages)

Weighs up the important role of co-ordination mechanisms in new product development (NPD), discussing the mechanisms involved and the structural attributes and process variables to which they relate. Presents a conceptual framework for a structureperformance model for NPD projects and examines the findings of a study of the NPD practices of some leading US firms. Concludes that where the concept being introduced is relatively new to the firm and its potential customers, the greater is the degree of difficulty in the development process. CC47

Stock market reactions to brand extension announcements

V Lane + R. Jacobson in Journal of Marketing (USA), Jan 95 (59/1): p. 63 (15 pages)

Judges the importance of branding and particularly brand names in their ability to create earnings for a firm above those generated by tangible assets; defines what is meant by brand leveraging - the creation of favourable consumer association for a brand in order to add financial value. Discusses the use of stock market return as a measure of the financial impact of brand leveraging and highlights the role of brand equity components such as brand attitude and brand name familiarity in the leveraging process. Presents the results of a study of investor expectations regarding the financial consequences of brand extensions. Useful addition to the branding debate. CC48

Product piracy: de problem that won't go away

G. McDonald + C. Roberts in Journal of Product and Brand Management (UK), Vol 3 No 4 94: p. 55 (11 pages)

Charts the extent of product piracy, notably in Asia; defines what is meant by piracy and distinguishes it from counterfeiting and copycat products. Discusses the ethics of piratical activities noting differences of view, and lists the international efforts to combat the problem. Succeeds in impressing one with the scale of piracy which is quite staggering, especially in the music, publishing and software industries. CC91

Factors affecting the process of collaborative development

D. Littler + others in The Journal of Product Innovation Management (USA), Jan 95 (12/1): p. 16 (17 pages)

Ranks the results of questionnaire research on the role of collaborative product development among approximately 100 UK-based suppliers of information and communication technology products to identify the risks and benefits of shared development. Tabulates respondents by company size and quantifies reasons given for collaboration; details the effects on the productdevelopment process and evaluates how no less than 20 factors affected the success of a collaboration (based on answers to predetermined questions). Draws conclusions. CC93

Benchmarking now product development funding

K.A. Pierz in The Journal of Product Innovation Management (USA), Jan 95 (12/1): p. 43 (11 pages)

Traces factors that should influence spending on new product development - product life cycle, level of technology in the industry, market position and corporate goals, development risk, state of the art, distance from state of the art, rate of change in the industry, minimum spend (critical mass) and research v. development spending. Develops a methodology for benchmarking each expense and takes as a running example the Yellow Pages publication in the USA. CC94

Top-down innovation for bottom-up results

M. Zairi in World Class Design to Manufacture (UK), Vol 2 No 195: p. 6 (7 pages)

Updates the traditional concepts of innovation to take account of the realities of today's marketplace and asserts that newness has to be re-created on a continuous basis; considers innovation to be a strategic process and a culture and presents some of the prerequisites needed today. Views innovation as a process rather than merely product management and gives examples from some major innovative companies. A succinct account of what is required to retain competitive advantage in today's world. CD75