Successful Relationship Approaches During New Product Development in Technology-Based Industrial Markets: An Abstract

Abstract

A growing body of literature notes that seller-buyer relationships can be an important contributor to new product development (NPD) success in technology-based, industrial settings (Chang and Taylor 2016). Collaborative relationships can enhance product innovativeness (Chang and Taylor 2016) and quality (Hoyer et al. 2010) thereby hastening the diffusion process (Narayanan et al. 2015). However, involving potential buyers during the NPD process can also pose several challenges. Buyers may reveal technology and product related information to potential competitors which reduces the time for competitive offerings to enter the marketplace (Charterina et al. 2017). Also, buyer demands for joint intellectual property or exclusivity rights may slow down or even prevent offering the innovation to the larger marketplace (Eng and Wong 2006). The ensuing conflicts that follow can result in ineffective relationship management and NPD failure (Lynch et al. 2014). Following calls for greater research in the area (see for example, Athaide and Zhang 2011), significant research has focused on identifying the antecedents, nature, and outcomes of seller-buyer relationships during NPD (see for example, Chang and Taylor 2016). Despite this progress, empirical studies of seller-buyer relationships during product development remains underdeveloped (Cui and Wu 2016). To address this deficiency, we empirically investigate if sellers can enhance their NPD success by tailoring their relationship approach to match their situational context. Our results show that sellers engage in three different relationship approaches with potential buyers during NPD; we refer to them as bilateral, bidirectional information exchange, and unidirectional information exchange approaches. The choice of a particular relationship approach correlates with four situational characteristics: perceived buyer knowledge, prior relationship history, product customization, and technology uncertainty. Sellers engage in bilateral relationship approaches when the four situational characteristics are at the highest levels; in contrast, the unidirectional approach is associated with the lowest levels of the four situational characteristics. Further, high levels of NPD success are associated with all three approaches; this suggests that sellers appropriately tailor their relationship approaches based on the four situational characteristics.