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Executive Summary
A firm’s ability to successfully launch new products is well established as being critical to its survival and growth. Still, new product introductions have a high rate of failure, reinforcing the need to better understand various factors that may facilitate or impede new product success. Though little researched, the sales force undoubtedly plays a pivotal role in new product commercialization. Using data from 226 pharmaceutical salespeople, along with external ratings from customers and company records of effort and sales performance collected over a period of 18 months, the authors demonstrate that the effort a salesperson places on a new product indeed influences customer product perceptions and new product success.

The key question is how to manage the sales force most effectively during the new product launch. Given the importance of new products, firms may be prone to overmanage sales personnel by using behavior-based control systems that dictate the performance of particular activities related to the introduction. Such controls may be especially tempting given the findings that favorable salesperson product perceptions actually yield less effort on the new product (because the salesperson believes the efficacious product can “sell itself” and directs effort elsewhere) and that behavior-based controls can offset this tendency. However, the authors show that such a strategy is short-sighted.

By controlling the salesperson’s actions, managers fail to adequately recognize the salesperson’s time constraints and market knowledge, restrict the salesperson’s ability to engage in adaptive selling, and inadvertently direct the salesperson to misallocate effort--all reducing the effectiveness of the salesperson in shaping customer product perceptions. In contrast, outcome-based control systems enable salespeople to work smarter and better leverage their market knowledge to calibrate effort on the new product such that it has a commensurate effect on customer product perceptions and new product sales.

Thus, the authors suggest that during a new product launch, managers must (1) carefully administer the internal flow of information about the new product such that sales personnel are well versed in its relevant features and benefits without becoming overconfident in its ability to “sell itself” and (2) resist the temptation to employ a top-down, behavior-based approach of control and, instead, provide appropriate flexibility to salespeople in managing their call activity through more outcome-based control systems. This will maximize the chance that customers form positive perceptions of the new product, leading to a more successful new product introduction.

Biography
Michael Ahearne (PhD, Indiana University) is Professor of Marketing and Executive Director of the Sales Excellence Institute at the University of Houston. His research examines factors that influence the performance of salespeople, sales teams, and sales organizations. He is also a coauthor of a best-selling professional textbook, Selling Today: Creating Customer Value. The book has been translated into numerous languages and is currently used to teach professional selling in more than 30 countries. He has published in Journal of Marketing, Journal of Marketing Research, Management Science, and Journal of Applied Psychology, among several other journals.

Adam Rapp is Assistant Professor of Marketing at Clemson University. He has a PhD from the University of Connecticut and a MBA from Villanova University. His research examines factors that influence the performance of salespeople, sales teams, and sales organizations. He has published in Journal of Marketing Research, Management Science, Journal of Applied Psychology, and other journals.

Douglas E. Hughes is Assistant Professor of Marketing at Michigan State University. He earned a PhD at the University of Houston, an MBA at Michigan State University, and a BS (Marketing) at the University of Tennessee. Dr. Hughes leverages a rich corporate background in marketing, sales, and general management, having worked with some of the world’s most recognized brands and trademarks. His career includes experience as chief executive officer of a business services firm, as a director in both the sales and the marketing divisions at Miller Brewing Company and the Coca-Cola Company, and as a consultant for a variety of companies across multiple industries. Hughes has presented research at national conferences and has published articles in several premier academic journals. His broad research interests involve managerial topics in sales and marketing, with a particular emphasis in sales force productivity, channel salesperson motivation, brand/organizational identification, and customer relationships.

Rupinder Jindal is Assistant Professor of Marketing in the Bauer College of Business at the University of Houston. He received his PhD in Marketing from INSEAD in 2006 and an MBA from Indian Institute of Management (IIM) Bangalore in 1997. His research interests focus on the problems of coordination and control in channels of distribution.

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