Successful Relationship Approaches during New Product Development in Technology-Based Industrial Markets

Ineffective relationship management with potential buyers is an important contributor to new product failure in technology-based, industrial markets. However, empirical research on the topic remains underdeveloped. We address this deficiency by investigating if sellers can enhance NPD success by tailoring their relationship approach to match the situational context. Given the considerable relationship-specific assets required by such relationships, we rely on transaction cost analysis (TCA) to develop our conceptual framework. We find that sellers use three relationship approaches during NPD, i.e., bilateral, bidirectional information exchange, and unidirectional information exchange approaches. Four situational characteristics are associated with these approaches: perceived buyer knowledge, prior relationship history, product customization, and technology uncertainty. High levels of NPD success are associated with all three approaches which shows that sellers accurately “read” these situational characteristics to optimize their relationships with buyers during NPD.