Customization of Product Technology and International New Product Success: The Mediating Effects of Timeliness in Product Development and Rollout

Offering a standardized product for different country markets may enable companies to accomplish fast product development and multicountry rollout, whereas also enjoying substantial cost benefits. However, not all manufacturers serving multicountry markets can adopt a standardized product strategy. Where technological requirements, standards, and approval procedures vary substantially across countries, manufacturers invariably must adapt the product's technology to fit individual country requirements. Extensive customization may lead to longer new product development and rollout times and increase the likelihood of delays in the entire project, hence adversely affecting overall new product outcome. This study examines the relationships between product technology customization, the timeliness in completion of both the new product development effort and international market launches, and new product success. The study that reports on new product launches across European markets, is based on personal interviews with senior managers in 30 multinational companies. The authors show that timeliness in new product development and timeliness in rolling out the new product into different country markets mediate the link between product technology customization and overall new product success. Customization of product technology increases the likelihood of delays in the completion of new product development projects and multicountry rollout. Additionally, the timeliness in new product development mediates the relationship between product technology customization and timeliness in international new product rollout. This means that if the NPD project runs behind schedule, a fault-free multicountry rollout program becomes increasingly unlikely, as problems encountered during product development spillover into the rollout program. The results imply that international product managers must assign greater priority to assessing the relative advantages of customizing new product technology and to consider the timing implications for both the NPD effort and subsequent rollout. Managers must set realistic schedules and allocate sufficient resources to ensure both tasks can be accomplished within planned time scales. Finally, managers should not underestimate the complexities and time involved in customizing new product technologies, including the completion of disparate country technical approval procedures.