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Some companies design processed foods to contain aesthetic imperfections such as non-uniformities in shape, color, or texture. Simultaneously, consumers annually discard millions of pounds of unprocessed, safe-to-eat fruits and vegetables owing to aesthetic imperfections. Why design processed foods with aesthetic imperfections when people discard unprocessed foods because of them? Seven studies, including a choice study at a grocery store and an incentive-compatible study, show that the effect of aesthetic imperfections on consumer preferences depends on whether foods are unprocessed or processed. While imperfections negatively influence preferences for unprocessed foods, they positively influence preferences for processed foods. We attribute this preference shift to consumers making opposing inferences about the human care involved in producing aesthetically imperfect processed and unprocessed foods. Building on research highlighting the positive effects of human presence in production, we thus show that perceived care drives food choice. We discuss implications for product design, retail promotion, and sustainability., Author(s): Jacob Suher [sup.1] , Courtney Szocs [sup.2] , Koert van Ittersum [sup.3] Author Affiliations: (1) grid.262075.4, 0000 0001 1087 1481, School of Business, Portland State University, , 631 SW [...]

This research reveals the ways that salespeople manage intrafirm relationships by acting as intermediaries, connecting intrafirm members that would otherwise be unconnected. Using a two-study, multimethod design, the authors establish that (1) salespeople act as representative intermediaries positioned between peers in sales and those in marketing and product development; (2) the effects of representative positions with marketing and product development on performance are non-linear; and (3) selling-related knowledge moderates representative effects on performance. Representative salespeople act as the exclusive connection between a peer salesperson and a non-sales contact (marketing or product development), controlling non-redundant knowledge to gain influence over their peers. This research contributes to marketing by identifying non-linear effects for how salespeople mediate relationships between their peers and others in key intrafirm functions, and showing that salespeople with high selling-related knowledge realize enhanced effects of the representative position on sales performance., Author(s): Gabriel R. Gonzalez [sup.1] , Danny P. Claro [sup.2] Author Affiliations: (Aff1) 0000 0001 0790 1491, grid.263081.e, Department of Marketing, Fowler College of Business, San Diego State University, , [...]

This paper formulates a model in which a firm simultaneously chooses its organizational structure and product position. The firm's production is knowledge intensive, requiring employees to solve problems. A vertical hierarchy, in which workers refer unsolved problems to managers facilitates the acquisition and leveraging of managers' superior knowledge. I show that a larger span of control is complementary to the provision of high-value products. Moreover, this complementarity is sustained when employees acquire sufficient knowledge and is further strengthened when the firm enhances its capability of communicating knowledge. The model yields testable implications concerning (1) the fit between a firm's product position and span of control, (2) the effect of information technology on product innovations and skill-biased organizational changes, and (3) the heterogeneity in hierarchical structure and human resource management in professional service firms. Keywords: strategy and structure; strategic fit; product selection; organizational design; problem solving; knowledge-intensive firms History: Received July 25, 2013; accepted September 16, 2014, by Bruno Cassiman, business strategy. Published online in Articles in Advance March 13, 2015., 1. Introduction During the recent recession, four Wall Street law firms--Davis Polk & Wardwell, Cahill Gordon & Reindel, Sullivan & Cromwell, and Cravath, Swaine & Moore--won high praise from their [...]

Prior studies on performance-based contracting (PBC) for after-sales services have highlighted its advantages over traditional resource-based contracting (RBC), when products are established and their reliability is known to all parties. We develop a game theoretic model to investigate how these insights are affected when the vendor is privately informed about the reliability of a newly developed product. A novel feature of our model is the interaction between reliability signaling (private information) and the vendor's discretionary investment in spares inventory (private action), which arises naturally in the setting we consider. We find that this interaction leads to contrasting equilibrium outcomes under the two contracts: RBC induces the vendor to focus on inventory savings, leading to underinvestment in spares, whereas PBC induces the vendor to focus on reliability signaling, achieved through overinvestment in inventory. As a result, neither contract is efficient. We investigate two means to mitigate this inefficiency, but either approach has caveats: (a) making inventory verifiable removes the trade-off between reliability signaling and inventory investment, but results in diverging contract preferences between the vendor and the buyer; (b) pooling inventories across multiple buyers saves inventory costs but it also hinders reliability signaling, potentially exacerbating inefficiency. Keywords: signaling games; performance-based contracting; product reliability; aerospace sector; after-sales services History: Received February 1, 2012; accepted June 18, 2014, by Yossi Aviv, operations management. Published online in Articles in Advance January 19, 2015., 1. Introduction After-sales product support, namely maintenance, repair, and overhaul (MRO) operations, is a key business area in the aerospace industry. This sector alone generated revenue of $43 billion in [...]

We propose a dynamic structural model that illuminates the economic mechanisms shaping individual behavior and outcomes on crowdsourced ideation platforms. We estimate the model using a rich data set obtained from IdeaStorm.com, a crowdsourced ideation initiative affiliated with Dell. We find that, on IdeaStorm.com, individuals tend to significantly underestimate the costs to the firm for implementing their ideas but overestimate the potential of their ideas in the initial stages of the crowdsourcing process. Therefore, the 'idea market' is initially overcrowded with ideas that are less likely to be implemented. However, individuals learn about both their abilities to come up with high-potential ideas as well as the cost structure of the firm from peer voting on their ideas and the firm's response to contributed ideas. We find that individuals learn rather quickly about their abilities to come up with high-potential ideas, but the learning regarding the firm's cost structure is quite slow. Contributors of low-potential ideas eventually become inactive, whereas the high-potential idea contributors remain active. As a result, over time, the average potential of generated ideas increases while the number of ideas contributed decreases. Hence, the decrease in the number of ideas generated represents market efficiency through self-selection rather than its failure. Through counterfactuals, we show that providing more precise cost signals to individuals can accelerate the filtering process. Increasing the total number of ideas to respond to and improving the response speed will lead to more idea contributions. However, failure to distinguish between high- and low-potential ideas and between high- and low-ability idea generators leads to the overall potential of the ideas generated to drop significantly. Keywords: crowdsourcing; structural modeling; dynamic learning; heterogeneity; econometric analyses; utility History: Received December 15, 2011; accepted November 1, 2013, by Sandra Slaughter, information systems. Published online in Articles in Advance July 2, 2014., 1. Introduction Product innovation has been an important area of business academic research. Recent advances in information technology have allowed firms to enhance their direct communication with customers, and the [...]

Many firms use online brand communities to support the launch of their new products. This study proposes a typology of firm-hosted online brand communities and examines whether such a classification system can improve predictions of new product success. A cross-industry analysis of 81 firm-hosted online brand communities shows that these communities reflect three archetypes. A subsequent survey of 170 community-hosting firms in the consumer durable goods industry reveals that the three types of communities are not equally important for new product success. Moreover, one archetype generally underperforms the other two as a new product support mechanism. Overall, the results demonstrate that firm-hosted online brand communities can be a predictor of new product success. Keywords Firm-hosted online brand communities, New product success, Product innovativeness, Product introduction timing, Product and brand management, A growing number of firms develop and host online brand communities (OBCs) (Fournier and Lee 2009; Schau et al. 2009), usually linking to such online forums from their websites. Examples [...]

We examine, in a strategic setting, the broad issue of how retail channel structures--retail monopoly versus retail duopoly--impact a manufacturer's optimal new product design, both in terms of engineering design specifications as well as manufacturer and retailer profits. Our strategic framework enables manufacturers in specific contexts to anticipate the reactions of the retailers and competitive manufacturers to new designs in terms of the retail and wholesale pricing and to understand how different channel structures and channel strategies (such as an exclusive channel strategy) impact the engineering design of the new product, conditional on consumer preference distributions and competitor product attributes. Based on a simple numerical and a power tool design example, we illustrate how the insight from the framework translates to design guidelines; specifically, understanding which designs are optimal under differing channel structure conditions, and which design variables need precise targeting given their profit sensitivity. Key words: new product design; engineering design; research and development; retail channels; marketing; game theory; genetic algorithms; latent class models; structural models History: Received September 30, 2007; accepted December 22, 2010, by Christoph Loch, R&D and product development. Published online in Articles in Advance April 1, 2011., 1. Introduction The product development process has been defined as the transformation of a market opportunity into a product available for sale and involving disciplines of marketing, operations management, organizational [...]

Computer modeling and simulation are the cornerstones of product design and development in the automotive industry. Computer-aided engineering tools have improved to the extent that virtual testing may lead to significant reduction in prototype building and testing of vehicle designs. In order to make this a reality, we need to assess our confidence in the predictive capabilities of simulation models. As a first step in this direction, this paper deals with developing measures and a metric to compare time histories obtained from simulation model outputs and experimental tests. The focus of the work is on vehicle safety applications. We restrict attention to quantifying discrepancy between time histories as the latter constitute the predominant form of responses of interest in vehicle safety considerations. First, we evaluate popular measures used to quantify discrepancy between time histories in fields such as statistics, computational mechanics, signal processing, and data mining. Three independent error measures are proposed for vehicle safety applications, associated with three physically meaningful characteristics (phase, magnitude, and slope), which utilize norms, cross-correlation measures, and algorithms such as dynamic time warping to quantify discrepancies. A combined use of these three measures can serve as a metric that encapsulates the important aspects of time history comparison. It is also shown how these measures can be used in conjunction with ratings from subject matter experts to build regression-based validation metrics. [DOI: 10.1115/1.4002478]

This paper presents the use of a mathematical model in updating a decision maker's belief before selecting a product/system concept and demonstrates a procedure to calculate the maximum monetary value of such a model in terms of the expected value of information. Acquiring information about uncertainty and updating belief according to the new information is an important step in concept selection. However, obtaining additional information can be considered beneficial only if the acquisition cost is less than the benefit. In this paper, a mathematical model is used as an information source that predicts outcomes of an uncertainty. The prediction, however, is imperfect information because the model is constructed based on simplifying assumptions. Thus, the expected value of imperfect information needs to be calculated in order to evaluate the tradeoff between the accuracy and the cost of model prediction (information). The construction and analysis of a mathematical model, the calculation of the expected value of information (model prediction) and updating the belief based on the model prediction are illustrated using a concept selection for a public project. [DOI: 10.1115/1.4001974] Keywords: concept selection, updating belief mathematical model, expected value of information

The article identifies and illustrates the four steps to customer participation in process design, also known as the co-creational approach. These steps are identifying all stakeholders, mapping out stakeholder interactions, offering opportunities for stakeholders to share ideas, and building platforms to implement and continue sharing these ideas.

Toxic chemicals used in product design and manufacturing are grave concerns due to their toxic impact on human health. Implementing sustainable material selection strategies on toxic chemicals can substantially improve the sustainability of products in both design and manufacturing processes. In this paper, a schematic method is presented for characterizing and benchmarking the human health impact of toxic chemicals, as a visual aid to facilitate decision-making in the material selection process for sustainable design and manufacturing. In this schematic method, the human health impact of a toxic chemical is characterized by two critical parameters: daily exposure risk R and environmental persistence T. The human health impact of a toxic chemical is represented by its position in the R - T two-dimensional plot, which enables the screening and benchmarking of toxic chemicals to be easily made through comparing their relative positions in the characterization plot. A case study is performed on six toxic chemicals commonly used as solvents for cleaning and degreasing in product development and manufacturing. [DOI: 10.1115/1.4002199] Keywords: schematic method, material selection, toxic chemical, human health impact, sustainable design

Product development organizations are unwilling to compromise product functionality, unit cost, or time to market in order to create products that have less environmental impact than that required by regulations. Thus, designers may face a conflict between improving product functionality and reducing environmental impact. The design for environment (DfE) tools currently available are inadequate with respect to helping designers determine how to resolve this conflict during the conceptual design phase. Design-by-analogy is a promising conceptual design approach for this problem. Examples of products that simultaneously reduce environmental impact and improve product functionality can inspire designers to do likewise. The challenges are to generate the relevant knowledge and to organize it in an accessible DfE tool. This paper describes an approach for generating and organizing this knowledge, an analysis of successful products, and a table of successful designs. [DOI: 10.1115/1.4002144]

Life cycle assessment (LCA) is used to estimate a product's environmental impact. Using LCA during the earlier stages of design may produce erroneous results since information available on the product's lifecycle is typically incomplete at these stages. The resulting uncertainty must be accounted for in the decision-making process. This paper proposes a method for estimating the environmental impact of a product's life cycle and the associated degree of uncertainty of that impact using information generated during the design process. Total impact is estimated based on aggregation of individual product life cycle processes impacts. Uncertainty estimation is based on assessing the mismatch between the information required and the information available about the product life cycle in each uncertainty category, as well as their integration. The method is evaluated using pre-defined scenarios with varying uncertainty. [DOI: 10.1115/1.4002163] Keywords: uncertainty, life cycle assessment, ecodesign, intervals, weighted objectives

Product design is one of the most important sectors influencing global sustainability, as almost all the products consumed by people are outputs of the product development process. In particular, early design decisions can have a very significant impact on sustainability. These decisions not only relate to material and manufacturing choices but have a far-reaching effect on the product's entire life cycle, including transportation, distribution, and end-of-life logistics. However, key challenges have to be overcome to enable eco-design methods to be applicable in early design stages. Lack of information models, semantic interoperability, methods to influence eco-design thinking in early stages, measurement science and uncertainty models in eco-decisions, and ability to balance business decisions and eco-design methodology are serious impediments to realizing sustainable products and services. Therefore, integrating downstream life cycle data into eco-design tools is essential to achieving true sustainable product development. Our review gives an overview of related research and positions early eco-design tools and decision support as a key strategy for the future. By merging sustainable thinking into traditional design methods, this review provides a framework for ongoing research, as well as encourages research collaborations among the various communities interested in sustainable product realization. [DOI: 10.1115/1.4002308] Keywords: sustainable design, eco-design, product design, manufacturing, supply chain

Discrete choice models estimated using hypothetical choices made in a survey setting (i.e., choice experiments) are widely used to estimate the importance of product attributes in order to make product design and marketing mix decisions. Choice experiments allow the researcher to estimate preferences for product features that do not yet exist in the market. However, parameters estimated from experimental data often show marked inconsistencies with those inferred from the market, reducing their usefulness in forecasting and decision making. We propose an approach for combining choice-based conjoint data with individual-level purchase data to produce estimates that are more consistent with the market. Unlike prior approaches for calibrating conjoint models so that they correctly predict aggregate market shares for a 'baseline' market, the proposed approach is designed to produce parameters that are more consistent with those that can be inferred from individual-level market data. The proposed method relies on a new general framework for combining two or more sources of individual-level choice data to estimate a hierarchical discrete choice model. Past approaches to combining choice data assume that the population mean for the parameters is the same across both data sets and require that data sets are sampled from the same population. In contrast, we incorporate in the model individual characteristic variables, and assert only that the mapping between individuals' characteristics and their preferences is the same across the data sets. This allows the model to be applied even if the sample of individuals observed in each data set is not representative of the population as a whole, so long as appropriate product-use variables are collected that can explain the systematic deviations between them. The framework also explicitly incorporates a model for the individual characteristics, which allows us to use Bayesian missing-data techniques to handle the situation where each data set contains different demographic variables. This makes the method useful in practice for a wide range of existing market and conjoint data sets. We apply the method to a set of conjoint and market data for minivan choice and find that the proposed method predicts holdout market choices better than a model estimated from conjoint data alone or a model that does not include demographic variables. Key words: discrete choice modeling; conjoint analysis; choice experiments; data enrichment; hierarchical models; missing-data methods; Bayesian estimation History: Received March 13, 2008; accepted September 10, 2009, by Jagmohan S. Raju, marketing. Published online in Articles in Advance March 23, 2010., Introduction For many companies, decisions made today about which products should be developed will drive profitability for years or even decades to come (Krishnan and Ulrich 2001). A rich array [...]

It is believed that developing new products is a hit-or-miss proposition for many companies. Some organizations with successful innovation practices rely on a new analytic tool to ensure that the hits are much more likely. The return on innovation investment methodology correlates with organic growth.

A study was conducted to examine determinants of decision by companies to offshore innovation activities. Survey data from the international Offshoring Research Network project is used to estimate the impact of managerial intentionality on the possibility of offshoring innovation projects. Information about the global race for talent is also presented.

Contributors offer assessments and suggestions on a wide variety of business topics. These include strategic planning, human resource management, business innovation, product development, and social networking.

CASE DESCRIPTION The primary subject matter of this case concerns the evaluation of alternative channels of distribution for a proposed new business. Secondary issues that can be examined include pricing [...]

The article discusses how to select the standard, or default, product or service to maximize customer satisfaction and boost profits while decreasing risks for both customers and the company. The use of decision tools and defaults taxonomies is included.

Pixar Animation Studios illustrates peer-culture methods for fostering product development. These include allowing any employee to communicate with any other employee, providing a safe environment for new ideas, and watching the academic community closely for innovations.

With an increased focus on collaborative design for success in global markets, there is a need for a negotiation mechanism for designs distributed over autonomous stakeholders. This paper utilizes the unit price of the design variables as a medium for negotiation between autonomous and self-interested design participants represented by design agents (DAs). An artificial agent--the facilitator agent (FA), maximizes the overall utility of the design as a function of the prices of the design variables, and guides the design toward global feasibility. By relating the FA's price space to the DAs' design space through price-variable curves, a negotiation platform is developed and tested. Index Terms--Bilevel optimization, collaborative product design, design negotiation, distributed optimization, multiattribute utility, multidisciplinary design optimization.

The article defines design thinking as innovation driven by a complete understanding via direct observation of what consumers want and what they like and dislike about products and services. Steps for integrating design thinking into research and development are outlined.

Pharmaceutical firm Eli Lilly and Co. is used to illustrate the processes of successful product development in an industry for which development expenses are high and failure is frequent. The process emphasizes research that reveals fact and truth first, with corporate success second.

The development of fuel cells in Europe, North America and Japan is studied and the experience of two leading fuel cell companies: Plug Power and Sulzer Hexis are compared. The article focuses on the opportunity for small firms to play an important part as creators of technology-specific advocacy coalitions and advocates of a new technology in various experimental conditions.

Guidelines are presented for assessing risk related to business creativity and product development. Procedures are presented under the key questions of the article title, including the validity of the market and product, the competitiveness of the firm and the product, and the weighing of strategic benefits.

This paper examines how firms succeed to leverage supplier involvement in product development. The paper extends earlier work on managing supplier involvement by providing an integrated analysis of results, processes, and conditions at the level of both the individual development projects and the overall firm. Following a multiple-case study approach with theoretical sampling, the study is carried out by examining eight projects in which four manufacturers from different industries involve multiple suppliers. The findings suggest that successful supplier involvement is dependent on the coordinated design, execution, and evaluation of strategic long-term processes and operational short-term management processes and the presence of enabling factors such as a cross-functional oriented organization. The required intensity of these processes and enablers depends on contingencies such as firm size and environmental uncertainty. In contrast with previous research, we find no indications that managing supplier involvement requires a different approach in highly innovative projects compared to less-innovative projects. Index Terms--Innovation, new product development, purchasing, R&D management, supplier relations.

The role of internal sharing and utilization of market information in better product development is presented.

The importance of managing effective technical communications among engineers in product development process is discussed.

A simple framework for analyzing transformations in product designing and promotional campaigns is presented.

Procter & Gamble's processes for driving product development and fostering business creativity are outlined. These include identifying the top 10 consumer needs, targeting adjacencies to enhance existing products, and assessing the impacts of newly acquired technologies.

A formula is provided for calculating the balance between enhancing product efficiency and increasing its complexity to a level at which it becomes too troublesome to use. Topics include consumer input and product-in-use research.

Guidelines are offered for striking a balance between product innovation, customer satisfaction, and profitability. Gauging business complexity involves number of offerings, sales volume, modularity, manufacturing, services, and retail.

A two-stage model of competitive positioning and pricing of new products in multisegmented market, useful to assess the potential threats inherent in existing market structures, is presented. The results suggest that the only open position for successful entry matches the effectiveness of the market leader in removing strains, and lower costs by sacrificing on the other attribute in the space.

Uncertainty in product development projects creates significant challenges for managers who are under intense competitive pressures to increase product quality, while reducing development time and costs. Traditional wisdom dictates the early selection of a single design in order to freeze interfaces between product subsystems so that team members can work effectively in parallel, resulting in more productive product development efforts. Prior research, however, uncovered a paradoxical case. Toyota Motor Corporation achieves the fastest development times in its industry by intentionally delaying alternative selection, a strategy termed set-based development. The current work adapts real options concepts to product development management to partially explain this paradox. A formal simulation model is used to show that converging too quickly or too slowly degrades project value. Furthermore, the model demonstrates that the wisdom of set-based strategies can be explained by the application of a real options approach to product development management. Implications for managers and directions for future work are discussed. Index Terms--Product development, project management, real options, set-based concurrent engineering, system dynamics.

EXCLUDED BY DESIGN: KEN LUM'S 'SHOPKEEPERS SERIES' << Il y a une fissure dans tout, dit Leonard Cohen dans 'Anthem', c'est ainsi que la lumiere s'introduit (1). >> Nonobstant ses [...]

A study on the influence of internal integration such as concurrent engineering practices on external integration such as customer integration, supplier product integration, and supplier process integration in product development is examined. Using contingency theory, contextual variables which, moderates linkages between integration strategy (external and internal) and performance are examined. And specifically this study considers whether uncertainty, equivocality, and platform development strategy change the relationships among internal integration, external integration and competitive capabilities.

ABSTRACT Choosing products to launch from a set of platform based variants and determining their prices and launch sequences are some of the critical decisions involved in any new product [...]

The success of South Korean and Japanese firms in launching new products in global markets is discussed. A survey is conducted to identify the determinants of new product development (NPD) and details are presented.

The vast majority of new products are financially disappointing, and sometimes dismal failures. This article provides models for companies looking to develop a profitable new product: integrator, orchestrator, and licensor.

A project that has developed a new product should satisfy the strategic and economic performance goals and if it fails to do so then it's quite likely that the management might terminate the project. The projects that have radical characteristics with strategic and competitive differences should be managed differently and are more likely to be terminated. The main idea of this research is to check that performance judgement, unseen performance thresholds and management advocacy form an important part in decision making whether the project should be terminated or not.