the stage of food product development

Topics: Marketing, Sales, Customer service Pages: 17 (8127 words) Published: October 30, 2014

Journal of Selling & Major Account Management

The Idea Generation Stage of the
New Product Development Process:
Can Key Account Management Systems Help?
By Geoffrey L. Gordon, Dan C. Weilbaker, Rick E. Ridnour, and Kimberly Judson The failure rate of new products continues to be high; yet, those developed with some customer input have a greater probability of commercial success. Industrial (B-to-B) salespeople, employed by organizations utilizing key account management (KAM) systems, should be well suited to serve as a conduit between customers and employees who hold primary responsibility for new product development (NPD) efforts. The current exploratory, descriptive study targeting sales managers examines the role the sales force employed by organizations utilizing KAM systems plays in the idea generation stage of the NPD process. Managerial implications and recommendations as to how to improve processes are provided.

The failure rate of all new products continues
to be in the range of 40-to-90 percent
(Cannon 2005; Clancy and Stone 2005;
Stevens and Burley 2003). As the business
environment gets increasingly competitive,
companies are faced with the challenge to
improve new products(s)/service(s)
development (hereafter referred to as
products(s)) success rates while simultaneously
guiding their products to market at an
ever-faster pace (Strategic Direction 2003).
Numerous authors claim that new product
development (NPD) holds the key to
competitive success (Song and Parry 1997;
and Lynn, Abel, Valentine, and Wright 1999).
In a study of executives, ‘bringing new
products to market’ was named as the second
most critical activity by their organization
(ranking first was ‘acquiring new customers in
existing markets’) (Maddox 2005). More
recently, the Conference Board, in a 2007
study, found stimulating innovation and
improving customer relationships among the
top challenges facing CEOs around the world
(Lake and Lunde 2008).
New products developed with some customer
input tend to have a greater probability of
Northern Illinois University

commercial success (Ciappei and Simoni
2005). Savvy companies understand that they
should be proactive in developing long-term
relationships with customers, engaging them
in ongoing interactive and relational activities
as it relates to NPD (Alam and Perry 2002;
Yakhief 2005). Millson and Wileman (2006)
conclude that integrative efforts undertaken
with customers and suppliers proved critical
to new product success. Customer input
should be incorporated in the NPD process as
early as possible to avoid costly mistakes later
on (Koufteros, Vonderembse, and Jayaram
2005). Unfortunately, it appears that the level
of commitment management puts toward
communicating with customers and gathering
information early on (e.g., doing the vital
up-front homework) in the NPD process is
lacking (Cooper 2003). Results of a study
conducted by Industry Week (Osborne 2002)
revealed that poorly defined customer needs
were the most frequent reason given for
product development delays or failure.
Organizational managers must commit to the
notion that the process of becoming more
customer-oriented must begin with actually
undertaking activities involving the customer.
It should no longer be a question of creating
value for the customer; rather, it should be

Academic Article

about involving and creating value with the
customer (Akamavi 2005).
Since the
collection of market information and
customer involvement is critical to the NPD
process, organizations should be utilizing all
resources at their disposal to actively solicit
the ‘voice of the customer.’ One functional
area that should be well suited for this
purpose is the sales force. Industrial (B-to-B)
salespeople, in their boundary spanning role,
are usually the primary source of information
about customers and competition for the rest
of the organization...

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Agenda for Investigation of Product
Academic Article
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