Skip to main content

Advertisement

SpringerLink
Log in

Network-based market knowledge and product innovativeness

  • Published:
Marketing Letters Aims and scope Submit manuscript

Abstract

An ongoing debate in marketing literature is whether market knowledge facilitates or impedes new product innovativeness. To reconcile inconsistent findings, this study disaggregates market knowledge into breadth and depth dimensions and uncovers their divergent effects on new product innovativeness. Given organizations’ increasing reliance on network contacts for access to market knowledge, we focus on market knowledge derived from external ties. Based on an empirical test of 244 firms in China, this study finds that market knowledge breadth has a U-shaped relationship, whereas market knowledge depth has an inverted U-shaped relationship, with product innovativeness. These findings carry important theoretical and managerial implications.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Ahuja, G. (2000). Collaboration networks, structural holes, and innovation: a longitudinal study. Administrative Science Quarterly, 45(3), 425–455.

    Article  Google Scholar 

  • Aiken, L. S., & West, S. G. (1991). Multiple regression: testing and interpreting interactions. Newbury Park: Sage Publications.

    Google Scholar 

  • Amabile, T. M. (1983). The social psychology of creativity. New York: Springer-Verlag.

    Book  Google Scholar 

  • Atuahene-Gima, K. (1996). Market orientation and innovation. Journal of Business Research, 35(2), 93–103.

    Article  Google Scholar 

  • Atuahene-Gima, K. (2005). Resolving the capability-rigidity paradox in new product innovation. Journal of Marketing, 69(4), 61–83.

    Article  Google Scholar 

  • Bettis, R. A., & Wong, S. S. (2003). Dominant logic, knowledge creation, and managerial choice. In M. Easterby-Smith & M. A. Lyles (Eds.), The Blackwell Handbook of Organizational Learning and Knowledge Management (pp. 343–355). Malden: Blackwell Publishing.

    Google Scholar 

  • Beyene, J., & Moineddin, R. (2005). Methods for confidence interval estimation of a ratio parameter with application to location quotients. BMC Medical Research Methodology, 5, 32–38.

    Article  Google Scholar 

  • Brockman, B. K., & Morgan, R. M. (2003). The role of existing knowledge in new product innovativeness and performance. Decision Sciences, 34(2), 385–419.

    Article  Google Scholar 

  • Calantone, R. J., Chan, K., & Cui, A. S. (2006). Decomposing product innovativeness and its effects on new product success. Journal of Product Innovation Management, 23(5), 408–421.

    Article  Google Scholar 

  • Chesbrough, H. W. (2003). The era of open innovation. Sloan Management Review, 44(3), 35–41.

    Google Scholar 

  • Christensen, C., & Bower, J. L. (1996). Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17(3), 197–281.

    Article  Google Scholar 

  • Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152.

    Article  Google Scholar 

  • Danneels, E. (2003). Tight-loose coupling with customers: the enactment of customer orientation. Strategic Management Journal, 24, 559–576.

    Article  Google Scholar 

  • Danneels, E. (2007). The process of technological competence leveraging. Strategic Management Journal, 28, 511–533.

    Article  Google Scholar 

  • Danneels, E., & Kleinschmidt, E. J. (2001). Product innovativeness from the firm’s perspective: its dimensions and their relation with project selection and performance. Journal of Product Innovation Management, 18, 357–373.

    Article  Google Scholar 

  • Day, G. S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(10), 37–52.

    Article  Google Scholar 

  • De Luca, L. M., & Atuahene-Gima, K. (2007). Market knowledge dimensions and cross-functional collaboration: examining the different routes to product innovation performance. Journal of Marketing, 71(1), 95–112.

    Article  Google Scholar 

  • Dougherty, D. (1992). A practice-centered model of organizational renewal through product innovation. Strategic Management Journal, 13, 77–92.

    Article  Google Scholar 

  • Dougherty, D., & Heller, T. (1994). The illegitimacy of successful product innovation in established firms. Organization Science, 5(2), 200–218.

    Article  Google Scholar 

  • Dougherty, D., Borrelli, L., Munir, K., & O’Sullivan, A. (2000). Systems of organizational sensemaking for sustained product innovation. Journal of Engineering and Technology Management, 17(3, 4), 321–355.

    Article  Google Scholar 

  • Fang, E. (2008). Customer participation and the trade-off between new product innovativeness and speed to market. Journal of Marketing, 72(4), 90–104.

    Article  Google Scholar 

  • Fang, E., Palmatier, R. W., & Grewal, R. (2011). Effects of customer and innovation asset configuration strategies on firm performance. Journal of Marketing Research, 48(3), 587–602.

    Article  Google Scholar 

  • Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.

    Article  Google Scholar 

  • Garcia, R., & Calatone, R. (2002). A critical look at technological innovation typology and innovativeness terminology: a literature review. Journal of Product Innovation Management, 19(2), 110–132.

    Article  Google Scholar 

  • Gerbing, D. W., & Anderson, J. C. (1988). An updated paradigm for scale development incorporating unidimensionality and assessment. Journal of Marketing Research, 25(2), 186–192.

    Article  Google Scholar 

  • Hedberg, B. (1981). How organizations learn and unlearn. In P. Nystrom & W. Starbuck (Eds.), Handbook of Organizational Design, 1 (pp. 3–27). Oxford: Oxford University Press.

    Google Scholar 

  • Henderson, R., & Cockburn, I. (1994). Measuring competence? Exploring firm effects in pharmaceutical research. Strategic Management Journal, 15(Special Issue), 63–84.

    Article  Google Scholar 

  • Im, S., & Workman, J. P., Jr. (2004). Market orientation, creativity, and new product performance in high-technology firms. Journal of Marketing, 68(4), 114–132.

    Article  Google Scholar 

  • Johansson, J. K., & Nonaka, I. (1987). Market research the Japanese way. Harvard Business Review, 65(3), 1–5.

    Google Scholar 

  • Karim, S. (2009). Business unit reorganization and innovation in new product markets. Management Science, 55(7), 1237–1254.

    Article  Google Scholar 

  • Kim, N., & Atuahene-Gima, K. (2010). Using exploratory and exploitative market learning for new product development. Journal of Product Innovation Management, 27(4), 519–536.

    Article  Google Scholar 

  • Laursen, K., & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal, 27(2), 131–150.

    Article  Google Scholar 

  • Lee, Y., & O’Connor, G. C. (2003). The impact of communication strategy on launching new products: the moderating role of product innovativeness. Journal of Product Innovation Management, 20(1), 4–21.

    Article  Google Scholar 

  • Leonard-Barton, D. (1992). Core capabilities and core rigidities: a paradox in managing new product development. Strategic Management Journal, 13(3), 111–125.

    Article  Google Scholar 

  • Li, T., & Calantone, R. J. (1998). The impact of market knowledge competence on new product advantage: conceptualization and empirical examination. Journal of Marketing, 62(4), 13–29.

    Article  Google Scholar 

  • Li, J. J., Poppo, L., & Zhou, K. Z. (2010). Social capital, contractual arrangement, and local knowledge acquisition by international subsidiaries. Strategic Management Journal, 31(4), 349–370.

    Google Scholar 

  • Lind, J. T., & Mehlum, H. (2010). With or without U? The appropriate test for a U-shaped relationship. Oxford Bulletin of Economics and Statistics, 72(1), 109–118.

    Article  Google Scholar 

  • Lindell, M. K., & Whitney, D. J. (2001). Accounting for common method variance in cross-sectional research designs. Journal of Applied Psychology, 86(1), 114–121.

    Article  Google Scholar 

  • Lyles, M. A. (1988). Learning among joint venture sophisticated firms. Management International Review, 23, 85–97.

    Google Scholar 

  • McEvily, B., & Marcus, A. (2005). Embedded ties and the acquisition of competitive capabilities. Strategic Management Journal, 26(11), 1033–1055.

    Article  Google Scholar 

  • Moorman, C. (1995). Organizational market information processes: cultural antecedents and new product outcomes. Journal of Marketing Research, 32(4), 318–335.

    Article  Google Scholar 

  • Moorman, C., & Miner, A. S. (1997). The impact of organizational memory on new product performance and creativity. Journal of Marketing Research, 34(1), 91–106.

    Article  Google Scholar 

  • Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.

    Article  Google Scholar 

  • Prabhu, J. C., Chandy, R. K., & Ellis, M. E. (2005). The impact of acquisitions on innovation: poison pill, placebo, or tonic? Journal of Marketing, 69(1), 114–130.

    Article  Google Scholar 

  • Prahalad, C. K., & Bettis, R. A. (1986). The dominant logic: a new linkage between diversity and performance. Strategic Management Journal, 7(6), 485–501.

    Article  Google Scholar 

  • Rindfleisch, A., & Moorman, C. (2001). The acquisition and utilization of information in new product alliances: a strength-of-ties perspective. Journal of Marketing, 65(2), 1–18.

    Article  Google Scholar 

  • Rodan, S., & Galunic, C. (2004). More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness. Strategic Management Journal, 25(6), 541–562.

    Article  Google Scholar 

  • Sammarra, A., & Biggiero, L. (2008). Heterogeneity and specificity of inter-firm knowledge flows in innovation networks. Journal of Management Studies, 45(4), 800–829.

    Article  Google Scholar 

  • Schilling, M. A., Vidal, P., Ployhart, R. E., & Marangoni, A. (2003). Learning by doing something else: variation, relatedness, and the learning curve. Management Science, 49(1), 39–56.

    Article  Google Scholar 

  • Sinkula, J. M. (1994). Market information processing and organizational learning. Journal of Marketing, 58(1), 35–45.

    Article  Google Scholar 

  • Song, M., & Thieme, J. (2009). The role of suppliers in market intelligence gathering for radical and incremental innovation. Journal of Product Innovation Management, 26(1), 43–57.

    Article  Google Scholar 

  • Taylor, A., & Greve, H. R. (2006). Superman or the fantastic four? Knowledge combination and experience in innovative teams. Academy of Management Journal, 49(4), 723–740.

    Article  Google Scholar 

  • Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: evidence from digital imaging. Strategic Management Journal, 21(10/11), 1147–1161.

    Article  Google Scholar 

  • Verganti, R. (2009). Design-driven innovation: creating the rules of competition by radically innovating what things mean. Boston: Harvard Business Press.

    Google Scholar 

  • Weick, K. (1995). Sensemaking in organizations. Thousand Oaks: Sage Publications.

    Google Scholar 

  • Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31, 547–561.

    Google Scholar 

  • Zhou, K. Z., Yim, C. K., & Tse, D. K. (2005). The effects of strategic orientations on technology-and market-based breakthrough innovations. Journal of Marketing, 69(2), 42–60.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Sawyer Business School, Suffolk University, Boston, MA, 02108, USA

    Yongchuan Bao

  2. School of Business, University of Alabama at Birmingham, Birmingham, AL, 35294, USA

    Shibin Sheng

  3. School of Business, The University of Hong Kong, Pokfulam, Hong Kong

    Kevin Zheng Zhou

Authors
  1. Yongchuan Bao
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Shibin Sheng
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Kevin Zheng Zhou
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Yongchuan Bao.

Appendix: measures

Appendix: measures

Construct and source

Items

Knowledge breadth (De Luca and Atuahene-Gima 2007; Rodan and Galunic 2004)

The knowledge acquired from external ties is in quite distant domain compared with our firm’s knowledge of customers.

The knowledge acquired from external ties is in quite distant domain compared with our firm’s knowledge of competitors.

The knowledge of customers acquired from external ties is wide ranging.

The knowledge of competitors acquired from external ties is wide ranging.

Knowledge depth

Through external ties, we have

(De Luca and Atuahene-Gima 2007; Moorman and Miner 1997)

 Accumulated a great deal of knowledge and experience about our customers.

 Acquired thorough knowledge of competitors in our industry.

 Deepened our understanding of our customers.

 Accumulated comprehensive knowledge of our major competitors’ strategies.

Product innovativeness (Lee and O’Connor 2003; Im and Workman 2004)

Customers perceive the product feature as novel or unique.

The benefits the product offers are new to the customers.

The product introduced many completely new features to the market.

The product shows an unconventional way of solving problems.

The product is brand new, never seen in the market before.

  1. All items use seven-point Likert scales (1 = “strongly disagree”; 7 = “strongly agree”)

Rights and permissions

Reprints and permissions

About this article

Cite this article

Bao, Y., Sheng, S. & Zhou, K.Z. Network-based market knowledge and product innovativeness. Mark Lett 23, 309–324 (2012). https://doi.org/10.1007/s11002-011-9155-0

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11002-011-9155-0

Keywords

Search

Navigation