IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 56, NO. 1, FEBRUARY2009 1 The Impacts of Time Performance and Market Knowledge Competence on New Product Success: An International Study William H. A. Johnson, Zeljana Piccolotto, and Roberto Filippini Abstract—Speed of development, speed to market, and meeting market needs are often recommended in the new product devel- opment (NPD) literature as keys to successful product launches, but it is not clear how market knowledge competence and time performance are related in driving successful NPD. To find out, we analyzed 250 firms from four countries (Germany, Italy, Japan, and USA). We found the two factors to be complementary, i.e., both direct and interaction effects of speed and market knowledge on product success were found. In particular, the strong effect of market knowledge competence on product success is noteworthy because building market knowledge competence is a strategy that management can proactively utilize to cope with market uncer- tainty, which has been argued to moderate the time performance relationship in NPD. The implication is that both measures of ef- fectiveness (matching needs) and efficiency (speed) need to be con- sidered complementarily when managing for successful NPD. Index Terms—Incorporating country variables, market knowl- edge competence, new product development (NPD), performance, small-to-medium-sized firms. I. INTRODUCTION N EW PRODUCT development (NPD) has long been rec- ognized as an important business activity across the globe and as such has been studied from many perspectives, includ- ing from the academic and the practitioner points of view [7], [28], [29], [46], [65]. A prime motive of the research on NPD over the last 30 years has been the identification and verifica- tion of various drivers purported to contribute to the success of product development. One major use of these drivers has been to decrease development time for new products. In fact, temporal pressures on NPD have only risen over time, and as global competition increases, many companies have invested great resources into shortening their product development cy- cle time [27], [40]. These efforts are justified by the need to deal with continuous changes in customer needs [1], [33] and the requirement to rapidly incorporate new technologies into products [13], [76]. From this extensive research, it has often been assumed that speed to market is the most crucial factor behind new prod- Manuscript received July 1, 2007; revised December 1, 2007 and April 1, 2008. First published; current version published. Review of this manuscript was arranged by Department Editor xxx. W. H. A. Johnson is with the Department of Management, Bentley University, Waltham, MA 02452, USA (e-mail: wjohnson@bentley.edu). Z. Piccolotto is with Caterpillar Global Paving Division, 40061 Minerbio, Bologna, Italy. R. Filippini is with the Engineering and Management School, University of Padua, 35100 Vicenza, Italy. Color versions of one or more of the figures in this paper are available online at http://ieeexplore.ieee.org. Digital Object Identifier 10.1109/TEM.2008.2009789 uct success and that all firms therefore need to know what an- tecedents determine a fast and punctual development of new products. Consequently, a large body of literature has empiri- cally researched which factors drive an accelerated product de- velopment process, not only from an exploratory point of view but also, more recently, from a theory-testing perspective [29]. This literature has mainly examined the relationships between key development process drivers and time performance [12], [18], [22], [23], [28], [41], [42], [49], [51], [58], [72]. However, few studies have explicitly and empirically inves- tigated the actual relationship between time performance and product success itself, and the results of this extant research have been inconsistent. For example, Griffin [30] affirms that while many practitioners perceive that fast development is important to new product success, very little empirical support exists for this stance. In fact, these researches show that a clear relation- ship between important constructs such as time performance and product success does not emerge from the empirical data. One implication is that there may be other factors interacting in the relationship [1], [41]. Studies looking at the interaction of factors under managerial discretion (such as the knowledge of market needs, which is examined here) and their effect on the NPD strategy are only recently being produced [44]. The argument underlying the present research is that, al- though firms may develop new products more quickly (utilizing the project acceleration techniques found in the literature), NPD must be managed in a way that provides the right product to the market in a timely manner. Otherwise, haste in product devel- opment may lead to NPD failure. Thus, our argument is one that combines both elements of effectiveness (the right product) and efficiency (delivered in a time manner) in NPD processes. To shed light on the process choices that determine effectiveness, this research examined the influence of market knowledge com- petence and its possible interaction in the time performance– product success relationship. Furthermore, we examine this in an international setting of companies from four developed coun- tries to extend the findings into the global context. Thus, this paper aims to verify and extend previous research by exploring the following questions. 1) Does time performance of the development process di- rectly increase product success? 2) Does market knowledge competence of the firm directly increase product success? 3) Is there an interaction effect such that market knowledge positively influences the relationship of time performance on product success? 0018-9391/$25.00 © 2008 IEEE