New product development process in Spanish firms: typology,

antecedents and technical/marketing activities

Jose Varela*, Leandro Benito

Departamento de Organizacion de Empresas e Comercializacion, Universidade de Santiago de Compostela,

C.P. 15782, Santiago Compostela, Spain

Abstract

On several occasions attempts have been made to explain the success of a new product by means of aspects related to the development

process followed. However, few papers have focused either on its degree of market orientation (MO) or on its antecedents, i.e., on the factors

which promote or limit the use of said process in the firm. Three basic aims are pursued in this work: first, characterize NPD process in terms

of its MO; second, to identify the organisational antecedents of the new product process adopted and, third, to analyse the influence of the

process type introduced and of the novelty type of the product on the importance of marketing and technical activities carried out during its

development. Results, obtained from a sample of Spanish firms, indicate that the NPD processes adopted may be characterized in terms of

MO and rigidity. In the same way as top management emphasis on innovation, the degree of centralisation in decision-making, and

experience in new product development influence the type of process introduced into the firm. It is also shown that process type and product

novelty conditions the importance given to the technical and marketing activities carried out.

q 2003 Elsevier Ltd. All rights reserved.

Keywords: New product development; Technical/marketing activities; Spain

1. Introduction

The advisability of following a development scheme for

new products arose in the sixties when managers were

alerted to the fact that such activity was not being carried

out properly. Thus, the first studies from the National

Industrial Conference Board (1964) noticed the high failure

rate of new products and the fact that many causes could be

prevented. Seven years later, Nielsen (1971) concluded that

only 47% of products that underwent a market test were

actually on the market a year later.

Since the early seventies, the hypothesis stating that by

following a formally defined development process such

failure percentages would be reduced began to take shape.

According to Johne (1984), formalisation refers to the

“degree in which the process is subject to rules, procedures

and structures previously specified”. These determining

factors try to define responsibilities and make it easier to

transmit information between the different members of the

organisation. This way of facing new product development

seems to contribute to the innovation success, as shown in

the results obtained in the revision of 47 empirical studies

carried out by Montoya-Weiss and Calantone (1994).1

However, formality should never be understood as rigidity.

The process, although requiring previous planning, must be

flexible in order to facilitate its adaptation to the nature of

the new product project.

The present study looks into the following three

questions:

1. Do firms use NPD processes with different degrees of

market orientation (MO)?

2. To what extent is the new product development (NPD)

process adopted conditioned by organisational and

managerial factors such as interest and management

involvement in innovation, degree of centralisation in

decision-making and firm experience in NPD?

0166-4972/$ - see front matter q 2003 Elsevier Ltd. All rights reserved.

doi:10.1016/j.technovation.2003.08.001

Technovation 25 (2005) 395–405

www.elsevier.com/locate/technovation

* Corresponding author. Tel.: 981563100; fax: 981563637.

E-mail address: oejavg@usc.es (J. Varela).

1 In their work, Montoya-Weiss and Calantone (1994) point out that three

out of four of the most important factors when explaining new product

success/failure are related to the development process: efficiency in

technological activities, efficiency in marketing activities, and protocol

proficiency. The fourth factor, product advantage, is of a strategic kind.

3. What influence do the NPD process adopted and the

novelty type have on the importance given to

the technical and marketing activities which make up

the process?

So then the study makes three contributions to literature

on NPD. First, it looks into the type of processes adopted in

terms of MO. Second, it examines to what extent several

organisational and managerial characteristics affect the type

of NPD process used. Third, it analyses how the process

adopted and the product novelty influence the mean

importance given to the technical and marketing activities

of the process.

In the sections to follow we present the conceptual

framework and the proposed relationships. Then, we explain

the research design and review the findings from a sample of

75 firms in Spain. In the final sections the results and

managerial implications will be discussed, and suggestions

for further research will be proposed.

2. Framework

The conceptual framework that guided our research is

presented in Fig. 1. This framework shows that we expect

three organisational characteristics to determine the type of

NPD process adopted and that this variable along with the

type of new product to be developed influence the

importance of technical and marketing activities which

make up the process. We will develop propositions with

regard to these relationships below.

2.1. NPD process type

Generally speaking, we may assert that the more

successful firms in new product commercialisation have a

formal development process that is maintained for a long

period of time (Booz, Allen & Hamilton, 1982).

A review of the literature on this subject allows us to

identify three main ways of facing a new product

development process that, in chronological order, are

known as first-, second- and third-generation processes.

First-generation schemes have a functional structure

where the technical area acts as the new product develop-

ment guide, marketing being limited to the final phase (that

of launch). These models follow a control and measure

methodology, ensuring that the project is adequately

developed and that all tasks are fulfilled.

Taking these first models as a basis, second-generation

schemes were developed and nowadays are applied. This

scheme adjusts to a systematic process called “stage-gate”

(Cooper, 1990) that serves as a guide starting from the

generation of a new product idea to its launching. The

proposed process is sequential and, as happens with first-

generation schemes, has a rigid structure. On the other hand,

it includes aspects that involve important advantages

derived basically from the purely inter-functional approach

(Cooper and Kleinschmidt, 1991) both in its actions and

decisions: together with R&D, the marketing department

takes an active part in the entire process of the new product

project, generating market information and incorporating it

into the decision-making. However, this scheme also

presents some limitations, mainly derived from its structural

rigidity, a feature already present in first-generation

schemes.

More recently, in order to face the challenge derived

from the high speed with which changes occur and the

growing competence in the new product development field,

Cooper (1994) proposed the third-generation process.

Centred on achieving speed and flexibility,2 this process is

based on the balancing of detail and speed without

neglecting the consumer at any moment.

Takeuchi and Nonaka (1986) were pioneers in high-

lighting that, given the high speed with which changes occur

and the growing competence in the new product develop-

ment field, firms must focus their processes on speed and

flexibility, proposing a product development process based

Fig. 1. Conceptual framework.

2 Cooper and Kleinschmidt (1986) have found a correlation between

project success and fulfilment degree in the development process. This is an

important finding, since it shows that, despite the need to carry out some

tasks in a non-sequential manner, each one must be carried out with a

minimal level of success.

J. Varela, L. Benito / Technovation 25 (2005) 395–405396

on a working team devoted to the project from beginning to

end, the selection of whose members is multidisciplinary.3

In this third-generation, as Cooper proposed, controls are

not necessarily binding, and the working team, closely

involved until the end, is responsible for combining and

coordinating every development phase to such an extent that

management does not impose a product concept or a specific

work plan. Management will only provide a strategic guide

or a generic aim and will encourage the adequate

environment to make the innovating process easier.

Thus, the team works from the beginning as an

independent group that takes initiatives and risks, and

self-imposes a work rhythm. Management will support the

project economically, but it will not actively take part in

decisions. The enrichment and growth of the group will

depend on the relationships generated within the team.

This non-sequential approach offers a series of advan-

tages that make the process easier. Besides the ones already

highlighted, less development time and greater flexibility,

we can also mention benefits derived from the management

of human resources: it favours co-operation and shared

responsibility, encourages compromise, incentivates a

predisposition towards problem solving and toward initiat-

ives, develops various abilities and highlights sensitivity

towards market conditions (Hart, 1995).

As opposed to these advantages, the main problem of

non-sequential processes is associated with their manage-

ment complexity: communication among team members,

relationships with supply firms, previous planning of

possible eventualities, etc. This approach also creates

greater group tension and conflict, since it demands a

great effort from all the members, present throughout the

whole process.

The descriptions of new product processes highlight the

fact that only third-generation schemes4 base their proposal

on a flexible process, whereas first- and second-generation

schemes are mainly characterised by their rigidity, that is,

considerable difficulty in adapting to specific situations.

As opposed to first-generation processes, both second-

and third-generation schemes have a high degree of market

orientation. Both processes include market information

from the first moment. Moreover, the different firm

departments that contribute to the new product development

share the information obtained throughout the whole

process.

According to what has been presented, the “market

orientation” and “process rigidity” dimensions stand as

suitable features for defining the basic and distinctive

characteristics of each of the processes gathered in

literature; the combination of both allows for their

identification (Table 1).

The lack of the “market orientation” feature marks the

processes as not being second- or third-generation; whereas

rigidity, a common feature of the two first generations, does

not take place in third-generation processes. The processes

characterised by the combination of “low rigidity-low

market orientation” have not been identified in literature.

2.2. Antecedents of the NPD process

As has already been pointed out, one of the aims of this

paper is to explain what drives firms to adopt one process

type or another when facing new product development. It is

an aspect rarely dealt with directly in studies, though several

hint at the relationships between certain variables and the

process adopted by the organisation.

As a starting point, and following Craig and Hart (1992),

we may assert that the development process will be

conditioned, among others, by generic aspects such as: (1)

strategy followed by the firm, (2) aspects related to

management and (3) organisational structure.

Previous research by Dwyer and Mellor (1991) offered

empirical evidence on the relationship between the

organisational features of firms and the new product

success/failure, this relationship being moderated by the

development process followed. The study revealed the

existence of an association between the adequate carrying

out of process activities and organisational features. The

latter were analysed in the framework of “7s of

McKinsey”,5 whereas the product development process

was broken down into 13 activities proposed by Cooper and

Kleinschmidt (1986).

Using the study carried out by McKee (1992) on the

factors of organisational learning related to the degree of

effectiveness of innovation projects as a reference, the

following have been proposed as antecedents for new

product development processes adopted: (1) management

emphasis in innovation, (2) decision-making centralisation

and (3) experience in new product development.

Table 1

New product development process typology

PROCESS TYPE (NPDP

typology)

Rigidity

High Low

Market Orientation High Second generation Third generation

Low First generation No defined

3 This is an autonomous structure (Clark and Wheelwright, 1992) where

individuals from different functional areas are formally assigned, posted

and situated in the same place, and where the project manager is directly

responsible for the good working of the autonomous team, also known as

“venture team”, “tiger team” or “inter-functional team”, among others.4 These characteristics may also be attributed to “stage-gate facilitated”

led by a “process owner”.

5 These seven features are: skills (distinctive abilities of key staff),

strategy (plan leading to the assignment of resources), structure (structural

features of the firm), shared values (common aims of firm members), style

(management philosophy of firm), staff (kind of functional specialists), and

systems (nature of the control processes implemented).

J. Varela, L. Benito / Technovation 25 (2005) 395–405 397

The interest and support that top management shows

towards new product development, its involvement in

this task and its conviction that the firm must adapt

to market needs, will facilitate the consolidation of a

NPD with high MO (second and third generation

processes).

The previous empirical foundation is only indirect. On

the one hand, several works documented that top manage-

ment initiative and support is a key aspect in order to

achieve new product success (Utterback et al., 1976; Booz,

Allen & Hamilton, 1982; Cooper and Kleinschmidt, 1987;

De Brentani, 1989; Zirger and Maidique, 1990; March--

Chorda et al., 2002). On the other, Brown and Eisenhardt

(1995) argue that multifunctional teams, characteristics of

the most advanced generation processes, affect the new

product performance and its effectiveness depend, to a

certain extent, on top management via so-called “subtle

control”. Taking the previous as a basis, the following

hypothesis is proposed:

H1. The greater top management emphasis on innovation,

the more probable the establishment of a NPD process with

high MO (second or third generation process).

Second, we may expect that shared management

facilitates collaboration, allows information and effort

distribution and, furthermore, favours the acceptance of

new ideas. In fact, Balbontin et al. (2000) found that

firms show a clear preference for participative leadership

and team work when focusing NPD. Apparently new

product development should be in the hands of a

working team functioning as an independent group that

takes initiatives and risks (Cooper, 1994; Lee et al.,

2000). Management must support the project, but it

should not take an active part in its decisions.

A second hypothesis is then stated as follows:

H2. The more centralised the decision-making in a firm,

the less probable the introduction of a NPD process with

high M.O. (second or third generation process).

Moreover, the experience the firm has in new product

development will make it possible to introduce more

advanced development schemes to achieve success. In

fact, Booz, Allen & Hamilton (1982) assert that

experience in new product development allows firms to

improve their performance.

The third hypothesis deals with the influence firm

experience in new product development has on the process

type, in the following way:

H3. The greater the experience in new product develop-

ment, the more probable it will be that the firm applies a

NPD process with high M.O. (second or third generation

process).

2.3. Process type, novelty type and technical/marketing

activities

NPD is a process that requires “the capability to obtain,

process, and interpret large amounts of market, technical,

financial and other information, in order to develop product

ideas and evaluate their technical boundness, manufactur-

ability and economic feasibility” (Gomes et al., 2003,

p. 185).

The formal development of new products integrates a set

of activities, which, depending on the author considered,

range from three to thirteen (Tidd et al., 2001). However,

the differences are only numerical or of a nomenclature

nature, since the tasks constituting the process scarcely vary

from one author to another. The sequence chosen in this

paper is the one Cooper and Kleinschmidt (1986) propose,

considered to be the most detailed and exhaustive6

(Table 2).

The importance of the development activities carried out

will be conditioned by the type of process introduced and by

the novelty type of the specific product to develop.

NPD is perceived as a high-risk activity due to the high

cost and inherent technical and commercial risk (Tidd and

Bodley, 2002). The presumable influence of the type of

process on the importance given to the activities which

make it up leads firstly to propose that MO of the process

will have a positive influence on the importance given to

marketing as well as technical activities. This line of

argument takes the form of the following hypothesis:

H4. NPD process with high MO in relation with those with

low MO:

H4.1. give more importance to the carrying out of marketing

activities.

H4.2. give more importance to the carrying out of

technical activities.

Different authors suggest that new product development

is a process oriented towards reducing uncertainty and that

the activities carried out will be determined by the degree of

risk perceived by management (Zirger and Maidique, 1990;

Song and Parry, 1994, 1997). Since it is possible to expect

that uncertainty differs according to the degree of product

novelty, it can be concluded that the importance given to

the activities which make up the process will vary according

to the novelty type of the product to be developed (Song and

Montoya-Weiss, 1998).

Prior research has suggested that more innovative

products require more firm resources and a different

development approach to be successful (Veryzer, 1998).

6 This group of thirteen activities has been subsequently adopted by

several authors (Martinez and Navarro, 1991; Dwyer and Mellor, 1991;

Edgett, 1996; Vazquez and Santos, 1996).

J. Varela, L. Benito / Technovation 25 (2005) 395–405398

The evaluation of products situated in familiar environ-

ments, that is, targeted at a familiar market or using a

familiar technology, benefit from clearer signals regarding

potential success. More (1982) argued that projects in new

areas present greater uncertainties and, as a consequence,

imply higher risk to the developing firm.

Choffray and Lilien (1984) point out that very novel

products must have a more complete development process

and greater attention has to be paid to marketing and pre-

development activities than those that are not so. Rochford

and Rudelius (1997) also associated the degree of novelty of

new products with development process activities. Their

work defends that the need to carry out certain activities will

be less relevant for a product that is being modified than for a

completely new product. In a sample of 79 firms of medical

products, the authors observed that in each group of products,

success was related to the completeness of the stages.

Along this same line, Song and Montoya-Weiss (1998),

working with a sample of 232 products distributed into

practically equal parts between very new and not so new

products, found that the former presented higher levels of

effectiveness in all the pre-development activities. Avlonitis

et al. (2001) arrived at similar conclusions after examining

84 financial companies: the greater the novelty degree of the

developed service, the greater the level of predevelopment

activities as well as those relative to the service test before

its market launch.

There is no question that not all innovations are the same.

Danneels and Kleinschmdit (2001) recognize that a much

better understanding is needed of exactly what product

innovativeness means and, referring on what scholars and

practitioners have used, they mention different new product

classifications on the basis of their relative newness—

innovative/non innovative; discontinuous/continuous; evol-

utionary/revolutionary; incremental/radical; major/minor;

really new and breakthrough. Bearing in mind

the difficulties found in the new products classification

and the fact that as Garcia and Calantone (2002, p. 111)

point out: “inconsistencies in labeling innovations

have significantly contributed to a lack of academic

Table 2

New product process activities (Cooper and Kleinschmidt, 1986)

Activity Description

Initial Screening Once an idea springs up, a meeting is called of the people in charge of the different departments,

who evaluate it according to their experience. This activity involves the initial decision to:

(1) begin the project or not; and (2) reserve resources (human and financial) or not for the new

product project.

Preliminary Market Assessment (M) To do so, preliminary market research is carried out: a rapid and shallow assessment about

the possible acceptance of the product in the market and its competitive situation. This is a

non-scientific activity that is based mainly on internal resources.

Preliminary Technical Assessment (T) This is the first technical assessment of the new product project that is carried out. It is a

question of identifying the technical difficulties and advantages of the project by

means of meetings, assessment of internal resources and secondary information.

Detailed Market Study (M) This implies market research with a reasonably representative sample, a formal design and

a reliable data collection system.

Pre-Development Business and Financial Analysis This analysis allows for taking the decision to continue with or cancel the product before

going on with its development. It includes tasks such as financial analysis, risk assessment,

qualitative business assessment and evaluation of market attractiveness.

Product Development (T) Here, we refer to the actual design and product development, obtaining a prototype or a sample

product.

In-House Product Tests (T) This contemplates the internal testing of the product under controlled or laboratory

conditions, putting reliability and prototype adequacy as well as functionality to test and verifying

specifications.

Customer Product Tests (M) These tests are made under the most authentic conditions possible. Normally it implies the cession

of a product sample or prototype, free-of-cost, to a possible group of purchasers to test it.

Trial Sell or Test Market (M) This consists of an attempt to reproduce the buying and selling situation of the product with a

limited number of purchasers, either in fictitious environments or offering the product in a limited

geographical area.

Trial Production (T) A limited production is decided on for the purpose of testing the production facilities.

The two forms of approaching this activity are: a test of the very production system and a quality

test of the product that the production system generates.

Pre-Commercialisation Financial Analysis This activity comprises a financial or business analysis after product development but before

its launch into the market on a large scale.

Production Start-Up This is the start-up of large-scale production. This activity requires good co-ordination, a

committed management and suitable resources, both tangible and intangible.

Market Launch (M) This includes a group of marketing activities that go with the market launching of the product

in order to facilitate its commercialisation.

(M) marketing activities; (T) technical activities.

J. Varela, L. Benito / Technovation 25 (2005) 395–405 399

advancements regarding the NPD process of different types

of innovations”, we have decided, as recommended by

Danneels and Kleinschmidt (2001), to examine only the

product novelty to the firm because the managers may tend

to overestimate the uniqueness of their product innovations

to the customer.

So the following hypothesis is proposed:

H5. When the firm develops new products for new lines

(high novelty from the firm) in relation to new products for

existing product lines (moderate novelty):

H5.1. the carrying out of technical activities is considered

more important.

H5.2. the carrying out of marketing activities is considered

more important.

3. Research methodology

3.1. Sample

The suggested process typology and the proposed

hypotheses were tested with data from Galician industrial

firms with invoicing higher than 6 million euro and which

internally developed and launched at least one NP during

the last two years.

Two databases were used as a sample framework:

“Ardan Galicia 2000” and “5000 Empresas Gallegas”.

Although the former offers more up-to-date information

than the latter, the data it supplies about each firm are

less complete, which is why we decided to combine

both.

A set of 159 firms met the specified conditions. To carry

out the surveys, we resorted to a number of methods:

personal, traditional mail, e-mail and fax (always after a

phone call). Data collection took two months: from

December 2000 to January 2001.

The draft questionnaire was tested in a pilot survey, and

the subsequent questionnaire sent to the above mentioned

159 firms. The number of usable questionnaires returned

was 75. The response rate of 47% was reasonable given the

information requested.

Therefore, the sample was composed of 75 firms from

different sectors, though food, wood and chemicals sectors

were predominant. 50.7% aim their products at the

consumer market, 41.3% at the industrial market and the

remaining 8% operated on both markets. The distribution of

the sample, both by activity sectors and size, roughly

correspond to that of the analysed population, which

indicates the external validity of the study. As suggested

by Armstrong and Overton (1977), responses from early

versus late respondents were compared to further assess

non-response bias. Subsequent t-test revealed no significant

differences between the two groups.

To verify the internal validity, the questionnaire7 was

sent, after previous phone contact, to managers in charge of

NPD and, therefore, able to answer the questions raised

adequately.

3.2. Research instrument

The questionnaire sent out contained, in addition to a

series of identification and classification questions, a

question relative to the number of product developments

during the last two years (as an experience indicator) and

three scales related to the emphasis of top management

towards new product development, the centralisation of

decision-taking and the process of development followed.

Top management emphasis and centralisation were

measured by means of the items proposed by Jaworski and

Kohli (1993), while the measurement relative to the process

was designed based on previous works (Griffin, 1997) and on

the results of 5 in-depth interviews with an equal number of

new product managers. In addition, the selection of a new

product that was representative of the ones developed by the

firm and recently launched was requested. Participants were

asked to assess the project novelty for the firm according to

the classification by Booz, Allen & Hamilton (1982).

Following Griffin’s (1997) behaviour guidelines, the options

that imply less novelty, the “product repositioning” and “cost

reduction”, were not considered since their low novelty

involves a minimum development effort for the firm, and so

those polled were informed when selecting the project. Then,

we differentiated between two kinds of new products: (1)

high novelty products for the firm and (2) moderate novelty

products for the firm.

Respondents were also asked to provide information

about the importance given to each one of the 13 activities

proposed by Cooper and Kleinschmidt (1986), rated on a

5-point scale, where 1 indicates “very little importance” and

5 “great importance”.

In order to identify the dimensions that characterise the

nature of the NPD process followed by the firms, an analysis

of principal components was carried out. The 9 items are

grouped into two factors that, as a whole, explain 66.31% of

the total variance. The formation of these factors is

presented in Table 3.

In the first factor, the most important items are those that

refer to the market information search, specifically about the

consumer, to its incorporation into the tasks of the new

product development and to the dissemination of this

information among the different departments, in addition to

inter-departmental co-ordination and teamwork. All this

leads us to call this factor “market orientation”.

The second factor, made up of the last three items,

has a clear interpretation: it indicates the degree to which

7 The questionnaire was pre-tested among managers from five innovative

firms, and their suggestions were incorporated into the definitive

questionnaire.

J. Varela, L. Benito / Technovation 25 (2005) 395–405400

a highly structured process exists. We call this factor

“rigidity”.

With these two dimensions, we carried out a cluster

analysis. The grouping method used was the “Ward”

method. The dendogram obtained, which is presented in

Fig. 2, allows for the identification of three groups of firms

whose formation is produced for scale levels of lower

than 10, while grouping among them does not occur until

really distant levels.8

The three groups present significant mean differences

in both grouping variables9 (Table 4) and we will define

the process followed by each conglomerate based on

them.

Group 1, made up of 19 firms, presents a non-market-

orientated process that, in general, is far from the basic

supposition that identifies a second-generation process. It is the

most heterogeneous group (it presents the highest diversions)

and, on the whole, it does not present a clear development

pattern. It combines a lack of rigidity with an obvious lack of

process organisation (there is no team work, no cooperation

among the different departments and no information compiled

on the market). The firms that form this group, as it does not

have a well-defined process, probably face the development of

new products in an erratic or badly organised way.

Group 2, made up of 41 cases, is the largest. It is

characterised by the following of a rigid and market-orientated

development process. This second aspect reflects work done

for development in which different departments take part and,

at the same time, the market requirements are attended. The

rigidity of the process indicates that product development

strictly follows a previously defined pattern, hardly adaptable

to specific situations. We are talking about firms that present a

process that simulates the so-called second generation.

The third group is made up of 15 firms that, as a whole, present

the highest mean score of the three groups in the dimension

Table 3

Analysis of “principal components”. Characteristics of the new product

process

Items F1: M.O. F2: Rigidity

Loadings

1. In the course of the product development

process, members of the different departments

that work together take part in the project

0.813 0.196

2. During the product development process,

the marketing department (commercial) and

the R&D department (technical) maintain a

close relationship

0.788 0.288

3. During the whole process, client/consumer

collaboration is requested in tasks such as

generation of ideas, concept evaluation,

product testing, etc.

0.785 0.148

4. The technical staff is provided with ample

information about the clients, their

requirements, opinions, etc.

0.741 0.319

5. There is a team composed of individuals

from different departments who are responsible

for the project and are involved in it from

beginning to end

0.731 0.177

6. Information is collected about the client’s

opinion from the start

0.674 0.183

7. No decision about continuing or leaving

the project is taken until all the necessary

information is available

0.122 0.903

8. The project phase is passed only when all

the previously planned activities have been

completed

0.245 0.826

9. Only after a phase has been finished is the

continuation or cancellation of the

project decided

0.357 0.724

Fig. 2. Cluster analysis: M.O.—process rigidity.

8 In order to check the consistency of the groups, we carried out a

discriminant analysis with “M.O”. and “Rigidity” factors; the percentage of

correctly classified firms was 98.7%.9 With the aim of strengthening the identified NPD process typology, we

have checked its relationship with a general measure of new product

success (Song et al., 1997; Souder and Jenssen, 1999). For that purpose, we

have made a “oneway” analysis of the groups about the success of specific

projects. The results indicate that the hypothesis of success average equal to

the three groups can be rejected (p , 0:05). The firms that present a third

generation process profile achieve better results than those which develop

second generation processes, and the latter better results than those of the

group with no well defined process which, then, get the lowest average

scoring.

J. Varela, L. Benito / Technovation 25 (2005) 395–405 401

“market orientation” (higher than 6), while the factor “process

rigidity” obtains an intermediate score. This group is possibly the

one that has the most advanced process and is the one that better

adapts to the current tendencies: multidisciplinary and stable

team, with a low degree of rigidity, which continuously compiles

information on the market. This scheme comes closer to the

nature of the third-generation process.

As a previous step to the testing of the proposed

hypotheses, we have analysed the reliability of the

measurement scales for the constructs “top management

emphasis” and “centralisation”, each one composed of four

items. While the measurement used for the “centralisation”

dimension is reliable (Cronbachalpha ¼ 0:755), the “top

management emphasis”, measured by means of the four

items, offers an alpha lower than 0.5. Given that the

elimination one by one of the items did not improve it, we

decided to use one only (Lee et al., 2000).

Since the four items proposed in the questionnaire are used for

measuring centralisation, the next step was to make a factorial

analysis, which, as was to be expected, grouped the four indicators

into one factor, which explains 59.4% of the total variance.

4. Results

We will first discuss the results with regard to the impact

of firm characteristics on the process type developed.

Subsequently, the results regarding the causal and moder-

ated relationships between the process type and the novelty

on technical and marketing activities will be presented.

4.1. Antecedents of the process type

Once the types of processes had been identified, we were

ready to test the first three hypotheses proposed, corre-

sponding to the antecedents: (1) top management emphasis,

(2) decision-taking centralisation, and (3) experience in the

development of new products.

In order to do that, we carried out a logistic regression

where, as predictor variables of the process type defined

according to the M.O. (high vs. low), we introduced the

hypothesised variables as their antecedents.

As shown in Table 5, following the forwards introduction

method (Wald), the three variables proposed as antecedents

of the process type established by the firm form part of the

model. Beta coefficient of the variable “centralization”

presents a positive sign, which means that the greater the

centralization, the more probable the M.O. of the NPD

process is lower. On the contrary, variables “emphasis” and

“experience” are in the model with a negative sign, and so,

the higher the management emphasis on innovation and the

higher the experience of the firm in new product develop-

ment, the less probable it is that the firm adopts an NPD

process with low M.O. These results confirm the hypotheses

related to emphasis, centralisation and experience.

The classification matrix (Table 6) shows a success ratio

of 85.3%. Thus, it can be assumed that the variables proposed

as antecedents of the process type are able to discriminate

between NPD processes with high and low M.O.

4.2. Influence of the process type and the novelty

on the development activities

From novelty and process typologies, it is possible to test

the last two hypotheses established. Hypothesis 4 suggests,

by means of its two sub-hypotheses, the influence of the

process M.O. on the importance of the activities performed.

For this purpose, we have carried out two t-tests. The

results, which are shown in Table 7, give an example of the

influence of the type of process on the importance given to

both kinds of activities. In the processes with high M.O., the

average importance of the marketing activities (p , 0:01)

Table 4

M.O. and rigidity according to process type

GROUP Mean Standard dev. F Sig.

MARKET ORIENTATION 1 (non-def. proc.) 3.657 1.118

2 (2nd gen. proc.) 5.886 0.815 53.307 0.000

3 (3rd gen. proc.) 6.266 0.533 (2, 72 d.f.)

PROCESS RIGIDITY 1 (non-def. proc.) 3.421 1.211

2 (2nd gen. proc.) 6.073 0.660 76.809 0.000

3 (3rd gen. proc.) 3.733 0.910 (2, 72 d.f.)

Table 5

Logistic regression: variables in the equation

Variables Beta Wald d.f. Sig. Exp. (B)

Centralisation 0.836 5.583 1 0.018 2.306

Management Emphasis 20.815 6.798 1 0.009 0.442

Experience in N.P.D 20.768 5.159 1 0.023 0.464

Constant 21.557 16.399 1 0.000 0.211

Table 6

Discriminant analysis with two groups: classification results

Predicted membership group Total

1 2

Group 1 (formal proc.) 53 (94.6%) 3 (5.4%) 56

Group 2 (non-defined proc.) 8 (42.1%) 11 (57.9 %) 19

85.3% of the originally grouped cases are correctly classified.

J. Varela, L. Benito / Technovation 25 (2005) 395–405402

and the technical activities (p , 0:001) is significantly

higher. Therefore, Hypothesis 4 is supported.

It is also interesting to note that in the high M.O

processes, the average importance given to technical

activities is slightly higher than that given to marketing

activities. This result is not maintained when the M.O.

process is low.

We may also point out that the managers’ opinions are

more homogeneous on the importance of marketing

activities than on technical activities, which have higher

deviations. In these, the one corresponding to low M.O.

processes is higher in spite of being a lower average, which

shows a higher variation in the opinions of the firms’

managers, who follow processes of this type.

If we consider the activities individually, significant

differences are recorded at level 0.01 between the high and

low M.O. in the following cases: (1) Preliminary market

assessment (4.54 vs. 3.92), (2) Product development (4.68

vs. 3.81) y (3) In-house product test (4.57 vs. 3.93). In all of

them, just like in the rest of activities, the firms which have a

high M.O. process give more importance to the carrying out

of the activities rather than those which follow a low M.O.

process.

In order to test Hypothesis 5, i.e., the influence of the

novelty for the firm on the average importance of the

fulfilled technical and marketing activities, t-tests were done

again.

When we confront high new products for the firm (46

projects) to moderate new product (29 projects), the

results, which are shown in Table 8, demonstrate that

there is no significant influence of the novelty type on

the average importance given to both types of activities.

When the product is high new to the firm, the average

importance of the marketing activities and the technical

activities is higher, but not significantly so. Therefore,

Hypothesis 5 is not supported. Again it is interesting to note

that in every type of new product, the average importance

given to technical activities is slightly higher than the one

given to marketing activities.

It may also be pointed out that the interviewed managers’

opinions are more homegeneous about the importance of

marketing activities than about technical activities, which

have higher standard deviations. In these, the one corre-

sponding to the less innovative new products is higher

despite the average being lower, which indicates a higher

variation in the managers’ opinions with regard to this type

of novelty.

If we consider the activities individually, no significant

differences at level 0.05 are recorded on the importance

asigned between the new type A þ B products and the rest

of innovations.

Although it was not hypothetized, the possible effect of

interaction between both factors on the importance given to

the process activities was also analysed. The results show

that there is no interaction effect and it is proved that the

only significant effect for some independent factor is that

corresponding to the process type. This involves that the

higher score of the importance given to technical and

marketing activities appears when the firm develops a

process with high M.O. and the new product is non-routine

to the firm; on the contrary, the least score is obtained when

the company applies a process with low M.O. and the new

product is more ordinary for the firm.

5. Conclusions and implications

Several studies explain the success of new products

because of the development process carried on by the firm.

Nevertheless, few works have concentrated on the identi-

fication of its M.O. degree, in the same way as on its

background, i.e, in the factors that promote or impede the

use of this process in the company. This work has

endeavoured to add to the literature about new products,

studying three important aspects in depth:

First, the characterization of the NPD processes in terms

of its M.O.; second, the identification of organizational

antecedents of the NPD process adopted by the firms and

third, analyzing the influence of the type of process followed

and of the product novelty on the importance of technical

and marketing activities done throughout its development.

The generic contribution of this work lies in the

identification of the process type followed through the

“market orientation” and “rigidity” dimensions, as well as

its inclusion as an antecedent of the importance of technical

and marketing activities in the N.P.D.

The research carried out leads us to three basic

conclusions. First: through “market orientation” and

“rigidity” dimensions, it is possible to identify the type of

process adopted by the firms for the development of new

products. The combination of both dimensions has an

influence on the three process generations identified in

literature (Cooper, 1990, 1994).

Table 7

T-test on the type of process about the importance of the activities

Importance Group Mean Standard dev. Signif

Marketing activities 1. Low OM 3,93 0.55 0.004

2–3. High OM 4.42 0.55

Technical activities 1. Low OM 3.82 0.75 0.000

2–3. High OM 4.55 0.61

Table 8

T-test of the novelty for the firm (high vs. moderate) on the importance of

activities

Importance Group Mean Standard dev. Signif

Marketing activities High novelty 4.40 0.62 0.10

Moderate novelty 4.16 0.50

Technical activities High novelty 4.45 0.67

Moderate novelty 4.23 0.78 0.20

J. Varela, L. Benito / Technovation 25 (2005) 395–405 403

From the three identified process groups, only two—

which correspond to the second and third generation—show

a high M.O.

Second: the consideration of the experience in the new

product development, the top management emphasis on

innovation and the decision-making centralisation have the

ability to differentiate between the NPD processes with a

high or a low M.O. Until now, these factors had been treated

as direct antecedents of proficiency (Dwyer and Mellor,

1991) and importance (Rochford and Rudelius, 1997) of the

process activities.

Results support the idea that the second and third

generation NPD processes introduction will be facilitated by

a board of managers who are conscious of innovation, and

decentralise the decision-making.

Experience in the development of new products is

another factor that determines the process type to follow:

experience makes it easier for the firm to appeal to processes

with a high M.O.

Then, if top management wishes to introduce NPD

processes with a high M.O. they should stand out their

commitment with innovation, in the same way as allowing a

higher decentralisation in the decision-making. They are

also aware that the process will improve the M.O. as the firm

increases its experience in NPD.

Third: the process type determines the average import-

ance of technical and marketing activities, whereas the

novelty type does not have a significant influence.

Accordingly, the importance given to the process activities,

which is considered as an antecedent of its effective

performance, will be higher when the NPD process has a

high M.O. This work supports previous studies where it is

highlighted how important it is for firms to have a formal

NPD process with high M.O.

By means of a general success measure, we have found

that firms that follow market orientated processes—second

or third generation processes—get better results than those

which do not use these schemes.

This study presents limitations linked basically to the

measurement of product novelty and the retrospective

nature of the data. As for the first limitation, Danneels and

Kleinschmidt (2001) and Garcia and Calantone (2002)

suggest that the product novelty for a firm is a multi-

dimensional concept, and so its measure must include both

newness in market terms, and newness in technological

terms. Regarding the data, their retrospective nature makes

them susceptible to memory loss and attribution bias.

Finally, because the NPD process is such a complex

subject, additional lines of research will inevitably arise. In

this sense, we find it interesting to consider the effect of the

activity sector on new product development, a variable not

considered in this study due to the dispersal of the sample

among sectors, or aspects such as pressure and the market

growth and the competitiveness degree, factors that may

possibly help to explain the behaviour of firms as regards the

type of process adopted and the activities involved in NPD.

Acknowledgements

We are indebted to Angel Martinez Sanchez. This

research was supported by Direccion Xeral de Universi-

dades e Investigacion (Xunta de Galicia)

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Jose A. Varela is professor of marketing in the Economics and

Business School at the University of Santiago de Compostela. He holds

a Ph.D. in Business Administration from this university. Dr. Varela’s

research interests include the management of new product development

and launching, marketing mix reactions to new products entry,

international marketing and marketing information. His current research

focuses on new product development, market orientation and inter-

national marketing. His last papers have been published in Marketing

Intelligence Planning, Service Industries Journal (2004), Revista

Europea de Direccion y Economia de la Empresa, Informacion

Comercial Espanola.

Leandro Benito received his Ph.D. in Business Administration from the

Department of Management Science and Marketing of the University of

Santiago de Compostela (Spain). He is currently a lecturer in marketing in

the same university. His research interests are in the new product

development and market orientation.

J. Varela, L. Benito / Technovation 25 (2005) 395–405 405