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Managing Seller–Buyer Relationships during New Product Development *
Author(s) -
Athaide Gerard A.,
Klink Richard R.
Publication year - 2009
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/j.1540-5885.2009.00681.x
Subject(s) - situational ethics , business , new product development , marketing , transaction cost , industrial organization , variety (cybernetics) , personalization , product (mathematics) , extant taxon , knowledge management , computer science , psychology , social psychology , geometry , mathematics , finance , artificial intelligence , evolutionary biology , biology
Ineffective relationship management with potential buyers during new product development (NPD) can be an important contributor to new product failure in technology‐based, industrial markets. However, empirical research on managing these relationships remains underdeveloped. This study addresses this deficiency by developing an empirically based taxonomy of relationship approaches used by sellers to develop technology‐based, industrial innovations, identifying situational characteristics that correlate with the choice of a particular relationship approach, and evaluating sellers' satisfaction with their relationship approach. The study's conceptual model is rooted in transaction cost analysis (TCA) and draws from extant literature on seller–buyer relationships during NPD. It was tested with data from 334 small to mid‐sized firms in a variety of technology‐based industrial markets. The results indicate that sellers use three basic relationship approaches during NPD: a bilateral approach, a buyer‐guided approach, and a seller‐guided approach. While the bilateral approach relies on a mutual exchange of information, the buyer‐guided and seller‐guided approaches do not. Juxtaposed with the high levels of satisfaction experienced by sellers in the sample, the study suggests that no one relationship approach is universally desirable. Therefore, managers may need to engage in a portfolio of relationship approaches with buyers during NPD; further, these approaches should correlate with buyer‐related (i.e., perceived buyer knowledge and prior relationship history) and innovation‐related (i.e., product customization and technological uncertainty) characteristics. Collectively, these results can help sellers optimize their relationships with buyers during NPD.