Neale, C.W. (1994). Successful New Product Development: A Capital Budgeting Perspective.Journal of Marketing Management, 10(4), 283-296.
Format: Peer-reviewed article
Type: Research — Non-experimental
Experience level of reader: Fundamental
Annotation: A survey is used to identify the link between business and financial evaluations and new product success. Although typically lacking from new product development processes, structured and detailed examinations of markets and budgeting have a significant impact on the success of new product development efforts. The sophistication of capital budgeting systems is also linked with higher rates of new product development success, although causation has yet to be proven. Overall it was found that investments in new product development were more successful when coupled with coherent administrative procedures, sound evaluation methods, and effective control.
Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees)
Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Policy Makers
Knowledge user level addressed by the literature: Organization
This article uses the Commercial Devices and Services version of the NtK Model
Model: Investment success likely to result from a framework including coherent administrative procedures, sound evaluation methods, and effective control.
Survey with significant findings.
Tip: Higher levels of sophistication in capital budgeting are associated with new product development success.
Survey with significant findings.
Occurrence of finding within the model: Step 4.10, Step 1.5, Step 4.12, Step 4.7, Step 4.3, Step 4.13, Step 7.7, Step 7.3
Barrier: Financial evaluation dilemma- Flimsy data may result in the elimination of potentially successful projects. However, failure to evaluate at an early stage (using any and all available data) results in new product development failure. (Hayes & Abernathy, 1980; Hayes & Garvin, 1982; Pearson, 1986)
Occurrence of finding within the model: Step 1.5, Step 4.7, Step 4.3, Step 2.2, Step 4.13, Step 7.7, Step 7.3