Toward a model of new product preannouncement timing

Abstract

For products and services ranging from software to the latest motion picture, the use of new product preannouncements (NPPAs) has become commonplace. In the weeks and months (and perhaps years) before the release of a new product, a company may share information with various groups, including customers, competitors, and producers of complementary products. These prelaunch communications serve various purposes - for example, building interest for the new product, obtaining feedback from customers, or encouraging consumers to delay purchases until the new product becomes available. Despite the key role that NPPAs play in the successful release of new products, however, almost no research has been conducted to explore the proper timing for such communications. Bryan Lilly and Rockney Walters provide a starting point for these investigations, by describing the elements of an NPPA and presenting a model of the factors that influence NPPA timing. Drawing on existing research and interviews with managers from firms in a wide range of industries, they offer insights into the nature and the timing of NPPAs, and they provide recommendations for improving the effectiveness of NPPAs. Their conceptual model lists four sets of factors that affect NPPA timing: expected reactions of competitors; product-related factors, such as the product's complexity and innovativeness; buyer-related factors, such as the length of the buying process; and firm-related factors, including final determination of the product's feature set. The relative strength of these effects depends on the objectives and the audience for the NPPA. For example, a late NPPA - that is, one close to the product's release date - effectively shields a new product from rapid competitive responses. On the other hand, an early NPPA allows channel members and customers to gain familiarity with complex or innovative products. Their findings suggest that early NPPAs are most appropriate for complex or highly innovative products as well as those that carry high, but avoidable switching costs for buyers. Late NPPAs are recommended if the firm expects sales of the new product to cannibalize those of existing products. Late NPPAs are also appropriate if a product's feature set is not yet frozen. To improve the effectiveness of NPPAs, managers must clearly define their objectives and carefully match the timing and the content of the NPPA to the target audience.