Essays on New Product Development

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Luo, Lan
Ratchford, Brian T.
Kannan, Pallassana K.
My dissertation comprises three essays that theoretically and empirically investigate three managerial relevant issues in new product development. In the first essay, our focus is to develop a methodology that allows manufacturers to account for the impact of channel acceptance in new product development. We have developed a model to incorporate the retailer's acceptance criteria, retailer's product assortment, and competing manufacturers' potential reactions directly in the design of the new product, thereby maximizing the product's success probabilities. Our model merges a game-theoretical model with micro-level data on individual consumer preferences. Therefore, this method provides a rigorous, yet practical, solution to the problems that manufacturers face regarding channel acceptance. In the second essay, we examine the impact of subjective characteristics (such as aesthetics and ergonomics) on consumer's preferences for products. Existing studies of consumer preferences such as conjoint models are limited in incorporating the influence of these subjective characteristics into product design. We have developed a model to determine whether the subjective characteristics (such as comfort) are connected with the objective product attributes (such as switch type), and whether both the objective product attributes and the subjective characteristics jointly affect consumer's evaluations towards products. We show that our model outperforms the conjoint model in understanding and designing appealing products for consumers. In the third essay, our goal is to account for variations in product performance across different usage situations and conditions and to design robust new products. Consumer durables such as appliances and power tools tend to be used in various usage situations and conditions, in which their performance can vary depending on the operating conditions. We apply a Multi-Objective Genetic Algorithm (MOGA) to incorporate multi-function criteria in the generation and comparison of product design alternatives. Our approach will be particularly useful for product development teams that want to obtain customers' buy-in as well as internal buy-in early on in the product development cycle. We illustrate the approaches described above in the context of a new power tool development project undertaken by a US manufacturer.