Indicadores Financieros

Network Externality

The presence of network externality implies that a user who switches to a

newer, superior product cannot obtain its full benefits unless other current users

switch to and new users adopt the new product as well (Capello 1994; Katz and

Shapiro 1986). In economic terms, network externality refers to the phenomenon in

which a consumer’s utility of a new product is proportional to the number of other

consumers that have purchased the product (Katz and Shapiro 1986). Such a

or information systems, like VCRs, personal computers, and facsimile machines

(Gatignon and Robertson 1991; Robertson, Eliashberg, and Rymon 1995).

Preannouncing new products may be of great value in generating an installed

base, helping consumers reduce their fear of being early adopters. In addition, new

product preannouncement may also encourage competitors to follow a particular

product standard. Compatible designs are particularly desirable in industries subject

to network externality (Robertson, Eliashberg, and Rymon 1995). A study by Farrel

and Saloner (1986) shows that, in the context of significant network externalities, new

product preannouncements can raise the probability of success for a new technology.

Early, clear, uniform, and truthful preannouncements with high frequency and

abundant cues may provide consumers with the knowledge to accelerate their future

adoption; competitors with the industry guidelines or standards to follow; supporting

firms with enough lead time and information to develop and complete complementary

products by the product launch; opinion leaders with highly complicated messages or

concepts to generate their favourable word-of-mouth. Such preannouncements, to a

great extent, may engender a market environment conducive to the acceptance of a

new product (Wind and Mahajan 1987). Hence, it is hypothesised that

H ll: As the network externality of the market where a preannounced product

will be launched increases, (1) the clarity of the preannounced messages

increases; (2) the uniformity of the preannounced messages increases; (3)

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content contained in the preannouncements increases; (5) the frequency of

the preannouncements increases; (6) the earliness of preannouncing timing

increases.

Competitive Hostility

Among all the risks of preannouncing new products, perhaps the most salient

one is to give competitors cues by which they can counterattack the preannouncer’s

market entry moves quickly and effectively (Heil and Robertson 1991). This risk

most often occurs when new products are preannounced in a highly competitive

market. Inevitably, a preannouncing firm has to consider the negative impacts of

competitive cueing on its motives for achieving a competitive strike (Eliashberg and

Robertson 1988).

In the study of Preukschat (1992), 23% of preannouncing firms took measures

to avoid releasing information too early to competitors. Preannouncing new products

too early would allow competitors enough time to formulate defence strategies and

deploy resources to react to the preannouncer’s launch. As a matter of fact,

preannouncements carrying precise hints of future products to competitors at

inappropriate times may increase the likelihood of product failure (Brockhoff and Rao

1993). If the competitors choose to retaliate the preannouncing firm, highly detailed

messages may provide them with too many clues about the firm’s new product

programme. Thus, when the market is highly competitive, a preannouncer may prefer

with less visibility and frequency. In a similar vein, the preannounced messages

under a highly competitive condition would be less truthful (Heil and Langvardt

1994).

H12: As the competitiveness of the market in which a preannounced product

will be introduced increases, (1) the clarity of the preannounced messages

decreases; (2) the uniformity of the preannounced messages decreases; (3)

the truthfulness of the preannounced messages decreases; (4) the message

content contained in the preannouncements decrease; (5) the visibility of

the preannouncements decreases; (6) the frequency of the

preannouncements decreases; (7) the earliness of preannouncing timing

decreases.

Market Turbulence

Market turbulence refers to “the rate of change in composition of customers

and their preferences” (Jaworski and Kohli 1993; Kohli and Jaworski 1990).

Customer demand fluctuates dramatically in a market characterised by high market

turbulence, to which the firms in the market must adjust (Calatone, di Benedetto, and

Bhoovaraghavan 1994). The instability and dynamism of the market, in a sense,

represent business opportunities for the firms which hope to change customer attitude

and behaviour in their favour. Hence, it is more likely to observe frequent new

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market, the firms planning to introduce new products may undertake large-scale

prelaunch marketing communications to develop new customers, retain current

customers, or encourage the switching of the competitors’ customers.

HI3a: As the market turbulence of the market in which a preannounced product

will be introduced increases, (1) the message content contained in the

preannouncements increases; (2) the visibility of the preannouncements

increases; (3) the frequency of the preannouncements increases; (4) the

earliness of preannouncing timing increases.

Technological Turbulence

How rapidly technology in a market changes can be captured by the construct

of technological turbulence (Jaworski and Kohli 1993). When a market is

technologically turbulent, firms are more likely to conduct early new product

preannouncements for reducing innovation resistance, pre-empting competitors,

setting specification standard, seeking the feedback of industry experts, or creating a

cutting-edge image. Nevertheless, many preannounced products in technologically

fast-changing industries, such as computer software, may never be available in the

market (Brockhoff and Rao 1993). The realisation of preannounced products depends

on their technological characteristics. Technological uncertainty (Ali 1994) can lead

firms to preannounce their products with restricted content and in a vague and

the truthfulness of preannounced messages abates in that the firms in technologically

turbulent markets may be more inclined to bluff about introducing new products

which are technologically infeasible or uncertain (Brockhoff and Rao 1993;

Eliashberg, Robertson, and Rymon 1995).

H14a: As the technological turbulence of the market in which a preannounced

product will be introduced increases, (1) the clarity of the preannounced

messages decreases; (2) the uniformity of the preannounced messages

decreases; (3) the truthfulness of the preannounced messages decreases;

(4) the message content contained in the preannouncements decreases; (5)

the earliness of preannouncing timing increases.

3.6 Summary

This chapter elaborates on the research hypotheses based on the conceptual

framework proposed in Chapter 2. The hypotheses reflect the underlying theme that

new product preannouncing behaviours influence the preannouncing effectiveness and

are influenced by situational factors including brand/product, firm, and market

characteristics. The characteristics of brand/product and firm also have direct impacts

on the effectiveness. Media emphasis and media favourability serve as control

variables for the relationships between the effectiveness and its antecedents.

All the proposed hypotheses are summarised in Table 3.1. The hypotheses are

further translated into a path diagram that represents the model of the research

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model refer to positive hypothesised relationships between constructs. In contrast, the

dashed lines indicate negative relationships. The model will be operationalised for

T

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Chapter 4