Organizations increasingly engage in launching new products, but they show heterogeneous decision-making patterns in new product strategies. This dissertation attempts to study the source of organizational heterogeneity in new product introductions (NPIs) by applying behavioral perspectives. To this end, this dissertation examines how organizations respond to the conditions of themselves and others through various decisions on new product introductions. I propose that organizations learn directly from their own experience that is relative to their own historical experience and their peers’ experience (i.e., performance feedback) and respond to it by jointly combining different aspects of NPIs such as NPI exploration and speed. Highlighting the perspectives of external actors, I also postulate that when organizations learn vicariously from their peers’ experience is contingent on the characteristics of peers and industry that are sending different signals to observing entities, such as external actors. Through three essays, I examine these ideas in the U.S. movie industry where movie studios rely on performance feedback and the conditions of others to make subsequent movie decisions.At the heart of this dissertation is the notion that organizations learn from their experience or experience of others by collecting performance information, interpreting it, and changing their NPI activities. This dissertation responds to an important call of Gavetti, Greve, Levinthala, & Ocasio (2012) for research in the cognitive aspects in decision making and the dynamics of interacting behavioral entities—organizations and institutional environments (e.g., peer organizations and investors)—filling important gaps in the literature and hence advancing our understanding of why, when, and which NPI decisions are adopted. / Business Administration/Strategic Management

Companies that advertise during the Super Bowl can reach 40 million U.S. households with a 30-second commercial spot, but the cost can exceed $2 million. This research examines Nielsen television ratings and expenses for related commercial spots and suggests that the Super Bowl is not always the best site for introducing new companies or products to the marketplace. ANOVA test results indicate that younger companies may better affect purchase decisions by advertising more frequently during less expensive programming slots.

When purchasing durable goods, consumers not only pay for current but also future consumption; consequently, forward looking behavior is an important consideration in durable goods markets. For example, anticipating that prices will go down in the future, consumers may delay the purchase today; such behavior has a significant impact on the firm’s marketing strategies. This dissertation investigates the impact of durability on two marketing strategies: new product introductions and supply chain design. The first part of this dissertation (Chapter 3) examines a durable goods manufacturer’s new product introduction strategy under different market environments where network effects and product compatibility are important. More specifically, this part explores the incentives of a firm to use either a replacement strategy or a skipping strategy—in the former, the firm commercializes the existing technology, while in the latter, it does not; in either case, an improved technology will be available in the future and the firm will introduce a new product at that time. Using a two-period analytical model with network effects, the analysis shows how the level of improvement in the new product, along with the type of compatibility between the products, interacts with network strength to determine the manufacturer’s optimal strategy. Under gradual new product improvement, there is a strict preference for replacement. In contrast, under rapid new product improvement, that preference only holds in markets with relatively high levels of the network strength; at lower levels of the network strength, skipping is preferred; interestingly, for moderate values of the network strength, the level of product improvement affects the manufacturer’s optimal choice differently under varying types of compatibility. The second part of this dissertation (Chapters 4 and 5) focuses on the supply chain design decisions of a durable goods manufacturer who is a sole supplier of an essential proprietary component for making the end product. Three different supply chain structures iii are considered. In the first, the manufacturer operates as a “component supplier” and sells the component to a downstream firm who then makes the end product. In the second structure, the manufacturer produces the end product using its component but does not make that component available to any other firms; here, the manufacturer operates as a “sole entrant”. Finally, the manufacturer can operate as a “dual distributor” who not only makes the end product using its own component, but sells the component to a downstream firm who then competes against the manufacturer in the end product market. The extant literature on the optimal choice among the above supply chain structures has focused mainly on static settings in a framework of price competition. By contrast, researchers predominantly use quantity competition to examine durable goods markets in dynamic (i.e., multiple time period) settings. Moreover, the literature notes diversity in optimal firm behavior under the two types of (i.e., price and quantity) competition. Therefore, to transition from supply chain design in a static setting to a more dynamic one where consumers are forward-looking, this part utilizes Chapter 4 to analyze the manufacturer’s choice using quantity competition in a static setting. This analysis (in Chapter 4) identifies precisely the shift in the manufacturer’s choice of supply chain structure when moving from price competition to a quantity competition framework. With that analysis as a benchmark, the next chapter focuses on the manufacturer’s choice in a dynamic setting. More specifically, Chapter 5 investigates the impact of durability on the optimality of the supply chain structures identified above. Using a two period setting, the analysis explores how the manufacturer’s preference for different supply chain structures is modified. The findings reveal that, e.g., when durability is taken into account, the manufacturer’s preference for the sole entrant role goes up, while the preference for the component supplier role goes down. Further, under certain conditions, the manufacturer may opt to be a dual distributor in the first period and then choose to become only a component supplier in the second period. The underlying rationale for such shifts in preference iv is directly linked to durability, which creates future competition and substantially reduces the manufacturer’s profitability in the long run. Interestingly, this negative impact varies across different supply chain structures. Overall, this dissertation contributes to the current literature on durable goods and enhances our understanding of the impact of durability on the optimality of distinct marketing strategies, and provides insights that are valuable to both academics and managers.