The joint impact of quality and innovativeness on short-term new product performance ☆ Francisco-Jose Molina-Castillo ⁎, Jose-Luis Munuera-Aleman 1 University of Murcia, Department of Marketing, Campus de Espinardo, 30.100 Murcia, Spain ABSTRACT ARTICLE INFO Article history: Received 25 July 2007 Received in revised form 19 May 2008 Accepted 17 June 2008 Available online xxxx Keywords: Innovation Product quality Objective quality Subjective quality Product innovativeness Short-term new product performance In the last decade a number of conceptualizations of product quality and innovativeness have been suggested, and academics as well as managers have begun to understand that the relationships between quality, innovativeness and new product performance are more complicated than they may initially seem to be. While an innovation-oriented strategy depends on the exploration of new possibilities through search, risk-taking and experimentation, a high quality strategy requires the exploitation of existing certainties through efficiency, standardization and control. In this research, we demonstrate that the interaction effects of quality (objective and subjective) and innovativeness (for the firm and for the customer) on new product performance are different than the isolated impact of these variables. In addition, by focusing on the main and joint impact of these variables on short-term new product performance, we provide valuable recommendations for new product launch decisions. “The pure and simple truth is rarely pure and never simple.”—Oscar Wilde © 2008 Elsevier Inc. All rights reserved. 1. Introduction In recent years, worldwide corporate innovation investment (EU R&D Investment Scoreboard) and quality investment (ISO Survey of Certifications) have accelerated, growing by 10% and 16% respectively. Accordingly, a substantial number of studies have investigated the impact of product quality and innovativeness on new product perfor- mance. Product quality has been analyzed in relation to new product development speed (Lukas & Menon, 2004), price (Brucks, Zeithaml, & Naylor, 2000), brand name (Warlop, Ratneshwar, & Van Osselaer, 2005) or in the emergence of dominant design (Srinivasan, Lilien, & Rangaswamy, 2006). Similarly, the implications of product innova- tiveness on new product performance have been analyzed with regard to development teams (Sethi, 2000), product preannouncements (Lee & O'Connor, 2003) or entry strategies (Ali, Krapfel, & LaBahn, 1995) among other variables. Despite such academic efforts, prior research has shown that product quality investments do not achieve their objectives (Rust, Moorman, & Dickson, 2002). However, more importantly, recent findings by Gourville (2006) reveal that innovative products fail at a stunning rate of between 40% and 90%. There are several reasons that may help explain why quality and innovativeness do not perform as expected. First of all, most of the multidimensional approaches to product innovativeness and product quality have not been applied consistently when studying the perfor- mance of new products. Several authors have illustrated this by looking at how firm and customer dimensions of product innovativeness and product quality may provide new insights into these relationships. For example, Gourville (2006) suggests that executives overvalue their innovations, while customers irrationally overvalue existing alterna- tives. Similarly, Morgan and Vorhies (2001) have analyzed the gap that exists between the quality most firms believe their products to possess, and quality that is perceived by their customers. An additional explanation for the above-mentioned inconsistent findings may be that the impact of product innovativeness on new product performance depends on the quality of the new product, and vice versa (Cho & Pucik, 2005). While such interaction effects are highly relevant to managers, surprisingly little is known about the joint impact of product innovativeness in combination with other product- related variables, for instance product quality, on new product per- formance (Henard & Szymanski, 2001). However, there are several reasons to expect that a significant interaction exists between quality and innovativeness. For example, firms that aim at developing a new product that is both innovative and of a high quality often run into difficulties, because the resources and strategies they need to implement an innovation are different from the ones they need to manufacture a high quality product (Lukas & Menon, 2004). While an innovation-oriented strategy depends on the exploration of new possibilities through search, risk-taking and experimentation, a high Industrial Marketing Management xxx (2008) xxx-xxx ☆ The authors are grateful to Roger Calantone, Erik Jan Hultink, Sergio Roman, Miguel Hernandez, the reviewers and the editor for their valuable comments and suggestions. ⁎ Corresponding author. Tel.: +34 968 367826; fax: +34 968 367986. E-mail addresses: fjmolina@um.es (F.-J. Molina-Castillo), munuera@um.es (J.-L. Munuera-Aleman). 1 Tel.: +34 968 363800; fax: +34 968 367986. IMM-06288; No of Pages 10 0019-8501/$ – see front matter © 2008 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2008.06.001 Contents lists available at ScienceDirect Industrial Marketing Management ARTICLE IN PRESS Please cite this article as: Molina-Castillo, F.-J., & Munuera-Aleman, J.-L., The joint impact of quality and innovativeness on short-term new product performance, Industrial Marketing Management (2008), doi:10.1016/j.indmarman.2008.06.001