International Marketing

The International Takeoff of New Products:
The Role of Economics, Culture and Country Innovativeness

by Gerard J. Tellis, Stefan Stremersch and Eden Yin

(This paper is forthcoming in Marketing Science)

Sales takeoff is vitally important for the management of new products. Limited prior research on this phenomenon covers only the US. This study addresses the following questions about takeoff in Europe:

(1) Does takeoff occur as distinctly in other countries, as it does in the US?

(2) Do different categories and countries have consistently different times-to-takeoff?

(3) What economic and cultural factors explain the inter-country differences?

(4) Should managers use a sprinkler or waterfall strategy for the introduction of new products across countries?

We gathered data on 137 new products across 10 categories and 16 European countries. We adapted the threshold rule for identifying takeoff (Golder and Tellis 1997) to this multinational context. We specify a parametric hazard model to answer the questions above.

The major results are as follows:

(1) Sales of most new products display a distinct takeoff in various European countries, at an average of 6 years after introduction.

(2) The time-to-takeoff varies substantially across countries and categories. It is four times shorter for entertainment products than for kitchen & laundry appliances. It is almost half as long in Scandinavian countries as in Mediterranean countries.

(3) While culture partially explains inter-country differences in time-to-takeoff, economic factors are neither strong nor robust explanatory factors.

(4) These results suggest distinct advantages to a waterfall strategy for introducing products in international markets.

Keywords: international new product growth, new product takeoff, new product growth, international diffusion, diffusion of innovations.

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Gerard J. Tellis, Marshall School of Business, the University of Southern California. PO Box 90089-1421, Los Angeles, California, USA. tellis@usc.edu

Stefan Stremersch, Erasmus University Rotterdam (room H15-15). PO Box 1738, Burg. Oudlaan 50, 3000 DR Rotterdam, The Netherlands. stremersch@few.eur.nl

Eden Yin, Judge Institute, Cambridge University, Trumpington Street, Cambridge CB2 1AG, UK. e.yin@jims.cam.ac.uk