Measuring New Product Success: The Difference that Time Perspective Makes

Management is often criticized for overemphasizing short‐term profits at the expense of long‐term growth. On the other hand, although numerous studies have explored the factors underlying new product success and failure, such studies rarely distinguish between short‐ and long‐term success. In fact, little research has been conducted to explore the relationship between a company's time perspective and its choice of criteria for measuring new product success. For that matter, little consensus exists as to just what we mean by the term success. Expanding on work done by a PDMA task force on measurement of new product success and failure, Erik Jan Hultink and Henry S.J. Robben identify 16 core measures of new product success. In a survey of large Dutch companies, they explore managers' perceptions of new product success, hypothesizing that the importance attached to each of the 16 core measures depends on the company's time perspective. For example, they propose that criteria such as development cost and speed‐to‐market are more important in the short term, and return‐on‐investiment (ROI) is more important in the long term. The study also examines the type of market served, the innovation strategy, and the perceived innovativeness of the company's products. It is hypothesized that these factors will influence the importance the company attaches to the core measures of new product success. For example, it is expected that speed‐to‐market is probably more important for technological innovators than for fast imitators or cost minimizers. The findings support the hypothesis that the firm's time perspective influences the perceived importance of the core measures of success. For the short term, the respondents emphasize product‐level measures such as speed‐to‐market and whether the product was launched on time. In the long term, the focus is on customer acceptance and financial performance, including attaining goals for profitability, margins, and ROI. Four factors are perceived as being equally important for short‐term and long‐term success: customer satisfaction, customer acceptance, meeting quality guidelines, and product performance level. Customer satisfaction was found to be the most important measure, regardless of a company's time perspective. Contrary to expectations, the perceived importance of the 16 core measures does not differ on the basis of the type of market, the innovation strategy, or the product's perceived innovativeness. In addition, the firm's functional orientation—technology push or market pull—does not affect the importance attached to the core measures of new product success.