Launching new products through exclusive sales channels

When launching a new product, a manufacturer usually sells it through competing retailers under non-exclusive arrangements. Recently, many new products (cellphones, electronics, toys, etc.) are sold through a single sales channel via an exclusive arrangement. In this paper we present two separate models that examine these two arrangements. Each model is based on a Stackelberg game in which the manufacturer acts as the leader by setting the wholesale price and the retailers act as the followers by choosing their retail prices. For each model, we solve the Stackelberg game by determining the manufacturer's optimal wholesale price and each retailer's optimal retail price in equilibrium. Then we examine the conditions under which the manufacturer should sell the new product through an exclusive retailer. In addition, we examine the impact of postponing the wholesale price decision and the impact of demand uncertainty on the manufacturer's optimal profit under both arrangements.Marketing/manufacturing interfaces Retail competition Channel competition

Novelty and scope of process innovation: The role of related and unrelated manufacturing experience

The accumulation of experience that occurs with production is likely to impact an organization's ability to develop manufacturing process innovations. However, how different types of manufacturing experience relate to the characteristics of an organization's process innovation output is an open question. In this study, we investigate how a firm's accumulated related and unrelated manufacturing experiences are associated with this firm's ability to innovate its production methods. To characterize firms' process innovation output, we observe their portfolios of patented manufacturing inventions, which we qualitatively evaluate over time, through a unique collaboration with expert patent attorneys, along two critical dimensions: novelty and scope. We argue that related manufacturing experience leads to a better understanding of parts of the focal product's technological landscape that will allow the development of inventions of broader scope. However, it may also contribute to inertia in that it might restrict the firm's innovative activity to more familiar regions of the landscape, thereby limiting inventions' novelty. Conversely, manufacturing experience with products that are unrelated to the focal product is expected to stimulate and support a broader search that includes more distant regions of the focal product's technological landscape, which would lead to more novel manufacturing inventions. Yet, the application of this unrelated experience to the production of the focal product is likely to require additional exploratory effort in a not‐well‐understood region of the focal product's landscape, likely resulting in inventions of limited scope. In line with our hypotheses, we find that related (unrelated) manufacturing experience is positively (negatively) associated with inventions' scope, and negatively (positively) associated with inventions' novelty. In addition to supporting the relevance of a multidimensional evaluation of innovations, our findings provide practical guidance regarding the strategic implications of a firm's knowledge management

More is not always better: The impact of value co‐creation fit on B2B and B2C customer satisfaction

Organizations increasingly rely on customer involvement in the value creation process (i.e., co-creation) to enhance customer satisfaction and differentiate themselves from competitors. While past research has largely indicated that more co-creation is beneficial, some have suggested yet not empirically validated that excess co-creation may negatively impact customers. Applying the service-dominant logic, two studies (B2B and B2C customers) offer insight into the appropriate levels of the co-production and value-in-use dimensions of co-creation. For both B2B and B2C customers, polynomial regression and surface plot analyses indicate an inverted U-shaped relationship between value co-creation and satisfaction, establishing that more co-creation is beneficial only up to a point. As such, we inform managers of factors that can cause the relationship between co-creation and satisfaction to peak and then turn negative. Further, customer expertise and process enjoyment moderate this relationship for B2C (but not B2B) customers, thereby offering ways to mitigate the negative effects of excess co-creation for end-customers. The studies also highlight the importance of value co-creation “fit” between the customer\u27s expected and experienced levels of co-creation. Interestingly, positive misfit (i.e., excess co-creation) retains a stronger negative influence on customer satisfaction than negative misfit (i.e., insufficient co-creation) for both B2B and B2C customers