Balancing market exploration and market exploitation in product innovation: A contingency perspective

Haisu Zhang, Fang Wu, Anna Shaojie Cui

Research output: Contribution to journalArticlepeer-review

44 Scopus citations

Abstract

This paper examines three different ways to balance market exploration and market exploitation in product innovation. First, following the knowledge-based view, we examine whether market exploration and market exploitation have differential effects on various new product outcomes based on their different learning mechanisms. We find that market exploration facilitates new product innovativeness, whereas market exploitation is more beneficial for new product development speed. This indicates that market exploration and market exploitation influence new product financial performance via distinct paths. Second, we examine the interaction between market exploration and market exploitation on new product outcomes. Our findings indicate that the joint effects of market exploration and market exploitation reduce new product development speed and have no significant impact on new product innovativeness. Third, we examine the contingent role of customer need tacitness in influencing the effects of market exploration and market exploitation. Our results show that customer need tacitness strengthens the effects of market exploration on both new product innovativeness and new product development speed. In contrast, it weakens the effect of market exploitation on new product innovativeness, and has no significant influence on new product development speed. Our results provide specific guidelines for managers regarding how to achieve a balance between market exploration and market exploitation in product innovation.

Original languageEnglish (US)
Pages (from-to)297-308
Number of pages12
JournalInternational Journal of Research in Marketing
Volume32
Issue number3
DOIs
StatePublished - Sep 1 2015

All Science Journal Classification (ASJC) codes

  • Marketing

Keywords

  • Customer need tacitness
  • Market exploitation
  • Market exploration
  • New product development speed
  • New product financial performance
  • New product innovativeness

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