The effect of customer information during new product development on profits from goods and services

Abstract

Purpose

– This study aims to investigate how customer information obtained at different phases of a new product development (NPD) process influences profits from new offerings.

Design/methodology/approach

– A survey was conducted in the context of NPD in goods and services. A unique database was constructed that merged key informant survey responses with financial data for 244 firms. This database was used to replicate and extend previous research by posing a number of hypotheses regarding the role of obtaining customer information in NPD.

Findings

– The results show that obtaining customer information during NPD influences the profits from new offerings, which vary depending on the phase of the NPD process. The financial rewards from obtaining customer information for goods are highest in the early phases of the NPD process and decline in later phases. The financial rewards for services, on the other hand, are high in the early and late phases of the NPD process.

Research limitations/implications

– The research is based on a survey combined with objective financial data, that is, a combination of different data sources. The research would have benefitted from longer data series and a higher response rate.

Originality/value

– This study replicates and extends previous research by testing the role of obtaining customer information in both manufacturing and service firms by combining survey data with objective financial data.