Eric (Er) Fang
Executive Summary
Managers are well aware of the importance of product innovativeness and speed to market, and more of them are bringing original equipment manufacturer (OEM) customers into the new development process (NPD) to achieve these objectives. However, the involvement of OEM customers in the NPD processes may not always lead to desirable outcomes. In certain situations, customer participation can even impede new product innovativeness and/or speed to market. If downstream retailers and distributors are so highly connected that they all know one another and communicate regularly, bringing the OEM customer into the development process is likely to speed it up because the OEM customer can access market information more quickly. However, managers need to be wary of the type of information transferred into the NPD process in this scenario because that information may be redundant and fail to reflect the diverse nature of market needs and preferences. This type of information input even may limit the innovativeness of the developed component. In addition, the decision to include OEM customers in a significant portion of the development tasks carries certain benefit–risk trade-offs. Specifically, if the nature of the development requires a high level of interaction and coordination across different stages, a significant OEM customer role is likely to lead to product innovativeness but delay the development process because of its high coordination burdens.
Biography
Eric (Er) Fang is Assistant Professor of Marketing in the College of Business at the University of Illinois at Urbana–Champaign. His research is focused on innovation, relationship marketing, and marketing strategy. He has published in Journal of Marketing, Journal of the Academy of Marketing Science, and other journals.
Journal of Marketing, Vol. 72, No. 4, July 2008
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