New Product Advantage Infused by Marketing and Technical Resources: Does Modularity Design Matter? An Abstract

Building on the resource-based view, this research aims to examine how marketing and technical resources impact new product advantage when product design (i.e., product modularity) and process design (i.e., process modularity) capabilities vary. Compared to firm-level resources, project and program level resources are more detailed and less obvious to firms’ competitive advantage. As a result, there have been limited insights on how such resources influence NPD projects in different contexts. Yet, selecting and allocating resources for NPD projects are complicated, challenging, and critical for managers to advance the projects.

In this research, modular design in both products and processes is examined as capabilities that impact NPD resource allocation. Product modularity represents a design capability that creates complex products from smaller and independent subsystems functioning together as a whole, while process modularity reflects a capability of reducing the complexity of production process design. Capabilities per se indicate the utilization of resources, but the dual dimensions of resources (marketing vs. technical) and design capabilities (product vs. process) call for knowledge on exactly how they interact to maximize new product advantage.

To examine the influence of different resources and their interactions with modular design capabilities, the authors conducted a survey study of managers involved in new product development (NPD) from multiple industries in the United States. Overall, findings show that marketing resources, rather than technical resources, improve new product advantage. However, when product modularity arises, technical resources exert a more positive influence on new product advantage, but the role of marketing resources is constrained. On the contrary, when process modularity increases, the influence of technical resources is indistinct, but marketing resources are more positively related to new product advantage. These findings advance the understanding of resource allocation during NPD projects and uncover that product and process design capabilities are contingency factors for resource allocation. This research also provides implications for managers to distribute resources for developing superior new products.