Want to Know Where to Launch a New Product?

Researchers Find U.S. Doesn't Top the List of Countries, and Suggest Marketers Take a 'Waterfall' Approach to Rollouts

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NEW YORK (AdAge.com) -- The best place to introduce a new product: Japan. The worst place: China.

Those are among the findings of a new study published in the September/October issue of Marketing Science called "Global Takeoff of New Products: Culture, Wealth or Vanishing Differences," which claims to be the first global analysis of its kind.

Broad scope
For the study, Gerard J. Tellis, director of the Center for Global Innovation and professor of marketing at the University of Southern California's Marshall School of Business, and his co-author, Deepa Chandrasekaran, assistant professor of marketing at Lehigh University, looked at data for consumer household products over 50 years and across 31 developed and developing countries. To rank the countries, they created an "innovativeness metric" based on the time it takes for new products to take off in a particular country.

A product "takes off" in a country, according to the definition of the study, when it has started to grow rapidly, moving from being used by a few people to being used by the mass market. The time it takes to do so depends on a number of variables: the economic strength and cultural mores of the country, as well as the price and category of the product. Nations with the shortest time to new-product takeoff landed at the top of the list.

Japan, Norway and Sweden came in first, second and third, respectively. The U.S. came in sixth, and traditionally strong European economies landed in the middle of the list, behind Venezuela and South Korea. Oddly, two of the countries normally considered fast-growing, India and China, were on the bottom. These rankings were surprising, even to the study's authors.

"You would expect the U.S. to top the list, along with the U.K., Germany, France and Italy," Mr. Tellis said. "And given all the talk, we would have expected [India and China] to be much higher."

Regional differences could be a factor
He explained that this could be because the evaluation was done on a national level, not on a regional level, and that his next study with Ms. Chandrasekaran will look at just this. "Within the U.S., I would expect the coastal areas to be more innovative than the interior. I don't know if that would match the blue states vs. the red states that they have in political science, but that is a testable hypothesis that we are going to attack next."

For now, the study can save marketers "a lot of time [and] get quick results," contends Mr. Tellis. "This ranking of countries tells you which to launch in first." The authors also recommend a "waterfall" approach to launches, staggering them from one country to the next, and they created a hazard model for the study to determine how many years it will be before products "take off" in a national market.

Mr. Tellis noted that globalization has not made the world flat -- products take off in different ways, and this is especially important to keep in mind in an economic recession when resources are limited and competition is tough. "Having this knowledge is more important than ever before because you can't be extravagant," he said.

Fun vs. function
For the study, the co-authors analyzed two different kinds of consumer household products: "fun" products that provide entertainment, such as MP3 players and cellphones; and "work" products that improve work efficiency, such as microwaves and washing machines. Across the 31 countries, the co-authors found that "fun" products take off far more quickly than "work" products (seven years vs. 12 years), and therefore require different marketing strategies.

Fun products take off more quickly because they are "more glamorous, more visible. If you walk down the street, you see someone using this product," Mr. Tellis said. "We don't go house to house boasting about our vacuum cleaner, but we do for our cellphones." In these cases, the authors suggest that marketers might benefit from using the "sprinkler" strategy, launching products in several countries at once.
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