The takeoff of new products refers to the first dramatic increase in sales after an initial period of low sales. This study focuses on cross-national differences in time to takeoff (i.e., the time between commercialization and takeoff) of new products. More specifically, it builds an econometric model that explains the global spillover of foreign product introductions and takeoffs on a focal country’s time to takeoff.
The main contribution of the article lies in the idea that the extent to which such spillover effects materialize depends on the specific pair of countries studied. The model explicitly incorporates the distance (economic, cultural, and geographic) between countries as moderating the influence of foreign introductions and foreign takeoffs on a focal country’s takeoff. It also allows countries to show different levels of susceptibility (i.e., receptivity to influences from other countries) to foreign introductions and takeoffs and differential foreign clout (i.e., influence on other countries) in the international spillover process.
The authors estimate the parameters of the model using a discrete-time duration model, on a novel data set composed for this study. It contains penetration data on eight recently introduced high-tech durables (CD players, video cameras, personal computers, mobile phones, Internet, ISDN [integrated services digital network], digital cameras, and DVD players) in 55 countries around the world.
The results show dramatic differences in time to takeoff across regions and even across countries within these regions. The most innovative regions are Western Europe and North America, followed by Central and Eastern Europe. Within these regions, however, there are also large differences in time to takeoff. In Western Europe, for example, time to takeoff ranges on average from 1.5 years for Switzerland to 5.67 years in Belgium. This information aids managers in identifying “fast” and “slow” countries. Moreover, the insights generated on global takeoff may also inform managers on withdrawal or repositioning decisions—for example, when a product takes longer to take off than expected.
This article also shows the importance of taking into account cross-country spillover in estimating takeoff probability. The authors find that foreign takeoffs, but not foreign introductions, accelerate a focal country’s time to takeoff. Moreover, the larger the country, the higher its economic wealth, and the more it exports, the more clout it has in the global spillover process. In contrast, the poorer the country, the more tourists it receives, and the higher its population density, the more susceptible it is to global spillover effects. Furthermore, cross-country spillover effects are stronger the closer the countries are to one another, both geographically and economically, but not necessarily in terms of culture. These results may help managers identify ideal introduction countries that would not only be fast in time to takeoff but also have a strong influence (clout) on other (susceptible) countries. Worldwide, Hong Kong and the United States are both candidate countries to launch a new product because both show a fast time to takeoff and, at the same time, rank high on foreign clout.
Countries characterized by a relatively long time to takeoff and limited foreign clout, but high foreign susceptibility, are good candidate countries for a late product launch. Examples are Singapore, Vietnam, India, Indonesia, Pakistan, and China. After these countries are penetrated, however, the market potential is huge, given their large population sizes, especially in the cases of India, Pakistan, and China.
Biography
Yvonne van Everdingen is Associate Professor of Marketing in the Rotterdam School of Management at Erasmus University Rotterdam, where she teaches a course on International Marketing Management. Her research focuses mainly on adoption and diffusion of innovations (in an international context), but recently she also has begun research projects on brand management issues. She has published in journals such as the International Journal of Research in Marketing, Marketing Letters, Journal of Product Innovation Management, Journal of Business Research, Journal of Economic Psychology, and Communications of the ACM.
Dennis Fok is an associate professor in the Econometric Institute at Erasmus University Rotterdam. His research interests include modeling unobserved heterogeneity, panel models, marketing econometrics, and nonlinear models. His work has been published in Journal of Marketing Research, Marketing Science, Journal of Econometrics, and Journal of Applied Econometrics, among other journals.
Stefan Stremersch holds a Chair in Marketing and is Desiderius Erasmus Distinguished Chair of Economics at Erasmus University Rotterdam and is Visiting Professor of Marketing in the IESE Business School at the Universidad de Navarra, Barcelona. His research interest is in innovation diffusion, marketing of technology and science, and international marketing. His work has appeared in International Journal of Research in Marketing, Journal of Marketing, Journal of Marketing Research, Marketing Science, and Management Science. He has won the Harold H. Maynard Best Paper Award of the Journal of Marketing (2002) and the J.C. Ruigrok Prize for the most productive young researcher in the social sciences in the Netherlands (only once in four years awarded to an economist). He also received the 2004 Research Prize at Erasmus University Rotterdam for outstanding research performance, selected among all Erasmus faculty across all disciplines. He is editor of International Journal of Research in Marketing, together with Don Lehmann.
Journal Marketing Research, Volume 46, Number 5, October 2009
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