Micheal, Kamel; Rochford, Linda; and Wotruba, Thomas R, 2003, How New Product Introductions Affect Sales Management Strategy: The Impact of Type of "Newness" of the New Product, Journal of Product Innovation Management, 20(4), 270-283.
How do firms adjust sales management strategy for new product launch? Does sales management strategy change more radically for different types of new products such as new-to-the-world products versus product revisions? Because firms introducing a new product rely considerably on their sales force in the product launch effort, the types and degree of changes made in managing the selling effort are important issues. Past studies have demonstrated that firms make substantial adjustments in their sales management strategy when they introduce a new product. This study expands on previous investigations by examining whether sales management strategy changes are conditioned by the type of newness of the new product to the market and to the firm.
Australian sales managers were asked to respond to a mail questionnaire concerning pre- and post-new product launch sales management activities. Three groups of firms were compared: (1) those with new-to-the-market and new-to-thefirm products (i.e., new-to-the-world products); (2) those with products new to the firm but not new to the market; and (3) those with products that are revisions to the firm and not new to the market. The study finds that firms do not make the most adjustments for products with the greatest degree of market newness—the new-to-the- world types of products—except in the sales management strategy categories of compensation and supervision. In the other sales management strategy categories defined for study—organization, training, quotas and goals, and sales support as well as for all categories in the aggregate sales management strategy changes were greatest in incidence, as measured both by the percent of firms making changes and the average number of changes per firm, when the new product was new to the firm but not new to the market.
These results suggest that, because different types of new products face different competitive environments, there may be greater incentive for a not-new-to-the market new-to-the-firm product to make changes in sales strategy. Uncertainties about market size and customer location with new-to-the-world products may limit the understanding of what changes to make in the strategy categories of quotas and territories. Similarly, uncertainties about product use and customer acceptance of new-to-the-world products may limit the development of training and sales support materials by these firms. Instead, these firms may rely more on compensation and supervision to direct sales efforts for new-to-the world products. However, observing the market experience and performance of the first-to-market product can benefit firms launching a not-new-to market and new-to-the-firm product, allowing them to rely more on strategy changes in training, sales support materials, organizational adjustments such as redeployments, and quotas.