Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

European economies show dramatic differences in innovativeness

04.08.2003


A study of 137 new product launches in 16 European countries shows the persistence of major regional disparity in the era of the European Union, according to an article in a journal of the Institute for Operations Research and the Management Sciences (INFORMS®).

"While we expected some differences, we were surprised by the size of the differences," the authors write. "We were also surprised by the fact that Scandinavian countries tend to have the shortest `time-to-takeoff´ of all European countries. In contrast, the large economies of Europe – France, Germany, Italy, Spain, and the United Kingdom -- turned out to be less "innovative" than the Scandinavian countries."

Based on their research, the authors recommend that European marketers introduce new products first in a few countries, employing what is called a waterfall strategy, rather than in many countries at once, what marketing literature calls a sprinkler strategy.



"The International Takeoff of New Products: The Role of Economics, Culture and Country Innovativeness" appears in the current issue of the INFORMS journal Marketing Science. The authors are Gerard J. Tellis of the University of Southern California, Stefan Stremersch of Erasmus University, Rotterdam, and Eden Yin of Cambridge University.

The authors employ a hazard model to analyze marketing data.

Normally, a new product is marked by a long introductory period when sales linger at low levels. At a certain point in time, the takeoff, a successful new product breaks into rapid growth and a large jump in sales. Time-to-takeoff is the duration of the introductory stage from product introduction to takeoff.

The authors´ most important conclusions are that –

  • "Time-to-takeoff" for new products differs dramatically between countries (for example, 3.3 years for Denmark and 9.3 years for Portugal). On average, time-to-takeoff takes about half the time in Scandinavian countries (4 years) as it does in Mediterranean countries (7.4 years).
  • Cultural factors partly explains these differences. In particular, the probability of takeoff increases in countries that place high in an index of achievement and industriousness and low in uncertainty avoidance.
  • Sales of most new products display a distinct takeoff in various European countries, at an average of 6 years after introduction.
  • Time-to-takeoff differs dramatically across product classes. The mean time-to-takeoff is 8 years for what are described as "white" goods (kitchen and laundry appliances) and 2 years for "brown" goods (entertainment and information products).
  • The probability of a new product´s takeoff in one country increases with prior takeoffs in other countries.

Because managers are under great pressure to pull the plug on a product that has not taken off, the authors suggest that introducing a product in a few countries that are expected to show early takeoff can win internal corporate support. The strategy allows lets marketers use sales data in one country to forecast sales in other countries where they plan to launch the product. Unfortunately, the authors observe, most European marketers do not introduce new products gradually and pay a penalty in failure.

The authors analyzed the takeoff of 10 consumer durable categories across 16 Western European countries. The study is one of the largest on international new product growth.

The countries included in the study are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The products are refrigerators, washing machines, freezers, dishwashers, color televisions, dryers, VCR´s computers, CD players, and microwave ovens.

The authors used data on product sales made available by Euromonitor, GFK, The Economist Intelligence Unit (EIU), TableBase of Responsive Database Services, the archives of appliance manufacturers in various European countries, and a private observer.

The authors of this study were recently recognized with an award by INFORMS for research that helped Whirlpool plan the launch of its Personal Valet Clothes Vitalizing System.

Barry List | EurekAlert!
Further information:
http://www.informs.org

More articles from Studies and Analyses:

nachricht The importance of biodiversity in forests could increase due to climate change
17.11.2017 | Deutsches Zentrum für integrative Biodiversitätsforschung (iDiv) Halle-Jena-Leipzig

nachricht Win-win strategies for climate and food security
02.10.2017 | International Institute for Applied Systems Analysis (IIASA)

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: New proton record: Researchers measure magnetic moment with greatest possible precision

High-precision measurement of the g-factor eleven times more precise than before / Results indicate a strong similarity between protons and antiprotons

The magnetic moment of an individual proton is inconceivably small, but can still be quantified. The basis for undertaking this measurement was laid over ten...

Im Focus: Frictional Heat Powers Hydrothermal Activity on Enceladus

Computer simulation shows how the icy moon heats water in a porous rock core

Heat from the friction of rocks caused by tidal forces could be the “engine” for the hydrothermal activity on Saturn's moon Enceladus. This presupposes that...

Im Focus: Nanoparticles help with malaria diagnosis – new rapid test in development

The WHO reports an estimated 429,000 malaria deaths each year. The disease mostly affects tropical and subtropical regions and in particular the African continent. The Fraunhofer Institute for Silicate Research ISC teamed up with the Fraunhofer Institute for Molecular Biology and Applied Ecology IME and the Institute of Tropical Medicine at the University of Tübingen for a new test method to detect malaria parasites in blood. The idea of the research project “NanoFRET” is to develop a highly sensitive and reliable rapid diagnostic test so that patient treatment can begin as early as possible.

Malaria is caused by parasites transmitted by mosquito bite. The most dangerous form of malaria is malaria tropica. Left untreated, it is fatal in most cases....

Im Focus: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

IceCube experiment finds Earth can block high-energy particles from nuclear reactions

24.11.2017 | Physics and Astronomy

A 'half-hearted' solution to one-sided heart failure

24.11.2017 | Health and Medicine

Heidelberg Researchers Study Unique Underwater Stalactites

24.11.2017 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>