New product development is an important success process, which is required for continuous development and long-term growth of the company in pharmaceuticals. In addition, new product development is a process that is more difficult in this pharmaceutical sector in Pakistan and high risky process. There are factor, which are highlighted as per the previous literature and research. These factors include, senior management support (SMS), Cross-functional team (CFT), Customer involvement (CI), Supplier integration (SI), and Time to market (TIM). These factors, which are, consider by the researcher as an independent variables for the research related to the new product development in the pharmaceutical industry.
A qualitative research methodology was applied to analysis this research study and the data was collect by the researcher through the interview session with the concerned respondents who have sound knowledge of working this stat of art. A number of factors were study by the researcher during this study. This research also identifies some additional factors, which can affect the new development of product in the pharmaceutical sector.
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Keywords: product innovation, new product development, factors of new product development.collected
INTRODUCTION: The NPD process is recognized to be costly, complex, time-sensitive and risky. The harsh reality is that the majority of new products never make it to the launch stage, and those that experience a failure rate are about twenty-five to forty percent (Crawford 1987. Cooper, 2001). Boozetl (1982) argue that for every new seven product ideas, about four go in development, one and have had launched, and one succeeds. Given the importance of the NDP process for the success and development of companies and judging from the fact that new products have high failure rates, there are numerous examples of literature that investigate the NPD process as well as the factors that influence it. While most of the literature is developed based on economics, this research is interested in extracting the most important factors that affect NPD process in the context of developing countries. It also seeks to determine the main internal challenges and constraints facing companies developing new products, and limits in their ability to invent and develop.
In the pharmaceutical sector with regard to methodology, the study applies a qualitative research method to study NPD in this targeted sector. The paper is organized as follows. After introducing the research problem the research objectives and the research importance the proceeding section gives an overview about the theoretical framework of the research. More specifically the section two introduces the literature review on NPD and some importance that theoretically affect the NPD. Section three shows the research methodology and data collection methods that are appropriately designed to collect the necessary data to meet the research objectives and criteria. Additionally, explanation on the research type and rational behind using qualitative research, the research population, research sample data collection method, interview description and data analysis techniques are provided in thus section. More ever operational definitions for research variables were presented in this section in addition to the research model. Section four presents the analysis and discussions of the collected data. Section forth summarizes the paper and provide an overview of the main research findings, research findings, research limitations and prospect for future research.
Literature Review:
Research, which was analyze previously define the new product development in slightly different manner (Ebrahim et al., 2010). New product development describes the new product design, production system and introduction product and increase productivity (Johnson, 2007). Krishnan and Ulrich (2001, p.1) define NPD as 'the transformation of a market opportunity and a set of assumptions about product technology into a product available for sale”. In the handbook of 'New Product Development', Loch and Kavadias (2008) describe the NPD to consist of the activities of the firm that lead to a stream of new or changed product offerings over time. Literature provide some important factor that affect the new product development. Which are,
2.1 Senior management support and NPD: In the pharmaceutical sector new product development required more employees, finance and time to launch a single product for the business growth. SMS help to gain new product, projects, goals and objectives (Esteves and Pastor, 2001). Therefore, senior management support is determined as significant for productive and fast New Product Development. Senior management support can create a conductive environment for creativity and innovativeness because it helps to overcome the functional obstacles, by allocating the necessary resources with the commitment spirit it could create (Jiang et al., 1996).
2.2Cross Functional Teams (CFT) and NPD: A Cross-Functional Team (CFT) is stat as a group of people with clear purpose representing a variety of functions or disciplines in the organization whose combine efforts are necessary for achieving the team purpose (zikmund, 2003). A number of scholars noticed that building a CFT and credence of departmental joint responsibilities is positively is related to a new product performance (Urban and Hauser. 1993). Customers preferences should be deeply understood using a CFT because it is essential for better performance of the new product (Joshi and Sharma, 2004). Coordination between functions are expected to be higher in NPD projects with cross-European Scientific Journal February 2015 edition vol.11, No.4 ISSN: 1875-7881(print) e-ISSN 1857-7431 478 functional structures (Griffin and Hauser, 1996). This is also expected to increase developmental efficiency, speed, and adherence to the budget (Gebert et al, 2006).
2.3Customer Involvement (CI) and NPD: In NPD customer involvement helps companies to understand in better way customer needs and desires and it provides products that full fill defined need and desires (Zirger and Maldique, 1990). This helps in enhancing him concept of effectiveness of the developed product and provides more ideas about new potential opportunities (Brown and Eisenhardt, 1995, Bilgram, 2008, Hippel, 198). Another benefit of CI in NPD is the facilitation of cross-functional relations such as between R &D and marketing, where customer can play a mediating role in stimulating communication and reducing conflict (Li and Calatone, 1998). Cooper and Edgett (2008) suggest several methods of capturing the customer's voice. These methods include depth interviews, focus groups, ethnographic observation, brainstorming, and information technology approaches. Previous research suggest several benefits of CI in NPD including some European Scientific Journal February 2015 edition vol11.NO 4 ISSN: 1875-7881(print) operational benefits such as enhancing cost efficiency (Auh et al 2007), reducing the cost of developing and marketing the new product, reducing lead-times, decreasing cycle time , enhancing customer satisfaction, influencing the originality of ideas and improving service innovation .
2.4 Supplier Integration (SI) and NPD: The supplier’s role in NPD program is also becoming increasingly important because of the wide range of knowledge and ideas that suppliers are available to share with manufacturers. Vertical integration is importance in dominating products that are identify by ongoing radical innovation. According to the Brown and Eisenhardt, (1995), SI into NPD is one the factors that affect the success of the project. The impact of the SI variables on project performance is clearly mediated by the degree of the component change. However, effective integration supplies into NPD can help in reducing cost, improving the quality of the purchased material, reducing time to market and improving the application of technology. SI in the development team provides more expertise and information regarding ideas and technology of new product and help in identifying expected problems and in resolving them early.
2.5Time to Market (TM) and NPD: NPD process can be describe as the length of the needed to get a product from the ideas into the market place. A product life cycle is decreasing every year, which is problematic when customer demand is increasing dramatically. This makes responding quickly to customer requirements important, especially with the increased complexity of product design and rapidly changing technologies. Moreover increasing the number of competitors in the market, as well as product dependence on rapidly changing technologies make it necessity to pay more attention to TTM and to find the right way to optimize TTM probability. Going to market early increase market dominance.
Research Design:
The research is design is expiratory in nature, which aims at investing factors that affect NPD in the pharmaceutical industry. Zikmund (2003) argues that expiratory research is initial research conducted to clarify and define the nature of the problem. In order to investigate the aim of this research a qualitative research method was used. However, the qualitative method research method refers to an unstructured expiratory research methodology based on small samples that provide insights and understanding the problem setting. Rossman and Ralls argue that qualitative research occurs in the natural setting. The researcher often goes to the participants' place to conduct the study. Thus European Scientific Journal February 2015-edition vol.11. NO 4 ISSN 1857-7881(print) e- ISSN1857 this enables him to develop Blass towards an individual or place and he inadvertently becomes involved in the actual experience of participants. According to them qualitative research uses multiple humanistic, interactive and data collection methods in order to involve in actual participation but includes the open-ended observations, interviews, focus, groups, documents, emails, scrapbooks, sound and other forms. All qualitative research methods was recommended in this research instead of using qualitative research methods for many reasons. Firstly it is not always possible to use fully structured or formal methods to collect information from respondents. Thirdly it is better to use qualitative research in conducting a study with small reference population- like in the study where are just twelve pharmaceuticals companies , and a small number of respondents were expected to participate.
Research Population and Sample: The research population and represents all Jordanian pharmaceutical organizations that produce new products. The targeted population encompasses all people who are involved in NPD process such as research and development, managers and marketing managers.
Data Collection Method: In this study, in depth interview method was chosen to collect the desire data. Interviewing is a systematic way to collect data and gain knowledge from individuals through conversation. This allow the respondents to involved and speak from their point of view. Malhotra (2003) identifies several advantages and disadvantages of the in-depth interview in comparison to focus groups. He argues that an interview can uncover great depth of insight than a focus group. A free exchange of information from in-depth interviews may not be possible in focus from. However, in depth interviews require skilled interviews who are expensive and difficult to find. The interviews collected were between 20 minutes. It began with general questions that encouraged the respondents to talk freely about their attitudes toward the issues at hand. The interview conducted in this study are individual (personal) interviews.
Interview questions were open ended questions that allow respondents to participate freely and describe their opinions using their own words and statements. The number of questions was carefully considered to prevent participants from becoming tried or disinterested. The first set of questions was concerned with the variables related to the company and its strategies. In addition to reflecting the personality and functional specifications of the respondents, it also forms a prelude to the investigate variables that affect a group of independent variables including SMS, CFT, CI and TTM on NPD. The third set of questions aimed to investigate the most important challenges and constraints that NPD faces from the participants point of view. After finishing all questions the researcher asked the respondent if they wanted to add anything and thanked them for their interest and the dedication of their valuable time.
Data Analysis Techniques: Qualitative data analysis is the most challenging aspect of using the qualitative research method. Qualitative data consist of words and Observations, but not numbers. However using numbers requires creativity, discipline and a systematic approach for the analysis there is no single or best way to analyzed qualitative data. Content analysis by which text is converted into numerical. Variables for qualitative analysis is a formal technique for analyzing qualitative data. According to Mostyn (1985) content analysis refers to diagnostic tool of qualitative researchers which they use when faced the mass of open-ended material to make to make a sense of. According to Hsieh and Shannon (2005) there are three distinct approaches of content analysis, firstly conventional content analysis in which coding categories is derived directly from the text data . Secondly is the directed content analysis approach which starts the analysis with a theory or relevant research findings as guidance for initial codes. Thirdly, the sum mutative content analysis approach involves counting and comparisons of content or keywords and also the interpreting of underlying content. The directed content analysis approach has been chosen to analyze the collected data. An open-ended European Scientific Journal February 2015 edition vol.11 NO 4 ISSN: 1857-71 (print) e – ISSN 1857-7431 484 question was used followed by a group of targeted questions for each predetermined category.
Theoretical model:
Through the number of study in literature review, there are five factor, which can affect NPD SMS, CFT, CI, SI, & TTM are independent variable and NPD itself is the dependent variable. As shown in table,
Independent Variable Dependent Variable
Senior management support
NPD
Cross-Functional Teams
Customer Involvement
Supplier Integration
Time to Market
The research results are consistent with the previous research findings that address the importance of SMS in NPD success (Cooper and Kleinschimdet, 1994; Gupta and Wilemon, 1990; Zirger and Maidique, 1990). Therefore, this is because senior management involvement and participation is critical to foster firm’s broad acceptance of the development project, to make decisions quicker, and to get sufficient resources for the project (Welti, 1999). Also, it helps in building effective relationships between R&D and the marketing departments (Gupta et al., 1986; Gupta and Wilemon, 1990), as they tend to show more concern about the project when
They perceive senior management’s involvement in the NPD process (Swink, 2000). So, SMS is considered substantial for a productive and fast NPD. In addition with above some important actors which identify during research are, Knowledge and Technology, teamwork, Cost, and marketing strategies. Therefore, the research model can be redefined as:
Independent Variable Dependent Variable
Senior management support
NPD
Cross Functional Teams
Customer Involvement
Supplier Integration
Time to Market
Knowledge
Technology
Team work
Development cost
Marketing strategies
Conclusion Recommendation:
Recommendation for future research the research investigation the most important factor that affect NDP in pharmaceutical industry. The research result shows several positive and negative factors that influence NDP process at pharmaceutical companies. More specially, the research result illustrates that the main positive factor affecting NDP is the senior Management support factor, which include financial resources the human resources. Employee training and motivation, empowerment, in addition to financial and moral support. The second factor affecting NDP is TTM. Statically, the research result show that taking the due diligence on TTM factor has an independent variable, dependent variable senior management support roles and regulation (R&R), senior management support, customer involvement (CI), cross functional team (CFTs), senior management support (SMS), and time to market (TTM) supplier integration (SI), Teamwork (TW), knowledge of development (KD). Market strategy (MS) NDP technology (Tec), development cost (cost). European Scientific journal February 2015 edition Vol.11, No.4ISSN: 1857-1857-7881 (print) e ISSN 1857-7431 492 positive effects on NDP. The third positive factor affecting NDP is performing CFT in NDP process. The fourth positive factor affecting NDP is customer involvement, especially at the ideas generation stage in NDP process. The fifth factor is R&R which statistically affect the NDP process negatively. Market strategy and competition comes in ninth rank.
Because of the finding of the research the study comes out with a few recommendations enhance the process of new product development. First referring to the study finding, SMS was determined as the most important NDP driver, so it is important to afford enough support from senior management to enhance NDP process. Firm can offer SMS in several form like financial support, moral support, human resources, motivation, and empowerment. A managerial vision that supports NDP, positive work culture, job stability, and employee appreciation respect and follow up.
In addition, company has to show enough care to human resources through providing them with the needed experience and training. Moreover, companies have to insure enough work knowledge with each department and find specialized team work place and enough space.
Companies have to speed up NDP process in order to get the benefit of going early to market. Some important issues can help to reduce TTM like doing some work stages in a parallel way, not delaying in marking the development decision.
Several additional factors were investigated in this study to affect NDP. These factors include R&R TW knowledge, DC, MS, technology and competition. Therefore, there is an opportunity for future to conduct studies that focus in-depth in the effect of this factor in NDP.
Reference
- Esteves, José and Pastor, Joan (2001).
- Gebert, D., Boerner, S., & Kearney, E. (2006). Cross-functionality and innovation in new product development teams: A dilemmatic structure and its consequences for the management of diversity. European Journal of Work and Organizational Psychology, 15(4), 431-458.
- Griffin, A. and Hauser, J. R. (1996). Integrating Mechanisms for Marketing and R&D. Journal of Product Innovation Management, 13(3), 191-215.
- Griffin, A. and Somermeyer, S. (2007). The PDMA Tool Book 3 for New Product Development, John Wiley & Sons, Inc.
- Harbi, S., Calvi, R. and Le Dian, M. A. (2002). New Product Development and Early Supplier Involvement: A new Supplier Involvement Portfolio.
- Krishnan, V. and Ulrich, K. T. (2001). Product Development Decisions: A Review of the Literature. MANAGEMENT SCIENCE, 47(1), 1-21.
- Mostyn, B. (1985). The content analysis of qualitative research data: A dynamic approach. In Brenner, M. Brown, J. & Cauter, D. (Eds.). The research interview (pp.115-145). London: academic Press. Olson, E.L. and Bakke, G. (2001). Implementing the lead
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