Performance Measurement Systems (PMS) Integration into New Product Innovation: A Literature Review and Conceptual Framework

Academy of Marketing Science Review, 2006 by Isabel, Ana, Mart�nez-Ruiz, Mar�a Pilar, Gonz�lez-Benito, �scar

Ana Isabel Jimenez-Zarco is Associate Professor, Department of Marketing, Open University of Catalonia, Barcelona, Avinguda del Tibidabo, 39-43, Spain, ( 34) 93 2542110, ( 34) 934 176 495 (fax), ajimenezz@uoc.edu. Maria Pilar Martinez-Ruiz is Visiting Professor, Department of Marketing, University of Valencia, Facultad de Economia de Valencia, Avenida de los Naranjos, s/n, 46022, ( 34) 96 382 83 34, ( 34) 96 382 83 33 (fax), m.pilar.martinez-ruiz@uv.es. �scar Gonzalez-Benito is Professor, Department of Marketing, University of Salamanca, Salamanca, Campus Miguel de Unamuno. 37007, Spain, ( 34) 923 294 400, ( 34) 923 295 715 (fax) oscargb@usal.es. The authors also wish to extend thanks to the editor and the anonymous reviewers for their constructive comments and suggestions. This manuscript was accepted by Pierre McDonaugh, the European regional editor of the AMS REVIEW.

Several studies have highlighted the importance that measurement and control systems have on new product development process performance (Atuahene-Gima 1996; Cooper and Edgett 1996; Cooper and Kleinschmidt 1995; Cooper et al. 1994; Edgett and Parkinson 1994; Griffin 1997; Hart et al. 2003; Johne and Storey 1998; Neely at al. 1997, 2000; Oldenboom and Abratt 2000; Pawar and Driva 1999;). In spite of this fact, there is no clear consensus regarding the model of measurement that should be used, or even the determinant success innovation dimensions that should be considered (Brignall and Ballantine 1996; de Brentani 1995, 2001; Kaplan and Norton 1996 a, b, 2001; Srivastava, et al., 1999; Storey and Easingwood 1996, 1998; Storey and Kelly 2001; Woodcock, 2000).

face= Bold; The New Product Development Processface=-Bold; Cooper (1990) developed the most reputable model to structure the product innovation process in the early 90s. Based on Booz, Allen and Hamilton's model (BAH), the Stage-Gate System (SGS) is both a conceptual and an operational model intended to move a new product from the idea stage through to market launch and beyond. Thus, this model constitutes a blueprint for improving both the effectiveness and the efficiency of new product management (Cooper 1990, 1994b, 1996).

From an SGS point of view, innovation arises from a double process: the development process and the control process. The development process consists of a predetermined set of stages. Between each stage, there is a quality control checkpoint or gate. All the gates together constitute the control process. A set of unspecified deliverables for each gate determines a set of quality criteria that the product must pass before moving to the next stage (Cooper 1996). Also, flexibility is built in to promote acceleration of projects. In order to reduce time to market, stages can overlap each other; long lead time activities can be brought forward from one stage to an earlier one; projects can be moved into the next stage, even though the previous stage has not been totally completed; and stages can be collapsed and combined (Cooper and Kleinschmidt 1995).

Usually the development process involves from four to eight stages and gates (see Figure 1). Each step consists of prescribed, multifunctional and parallel activities (Cooper and Kleinschmidt 1995), undertaken by people from different functional areas, but working together within the team and guided under a single director (Cooper 1996). Despite this general model, the sector in which the company competes determines the way the new product process is developed and the importance given to every stage. On the one hand, some stages are regarded as more important than others, that is to say, some stages should be developed more carefully if the company aims to achieve the success of the new product. Among these stages it is possible to mention: proficiency in predevelopment activities (Atuahene-Gima 1996; Cooper and Kleinschmidt 1995); quality of execution of marketing activities (Storey and Easingwood 1996); sharp and early product definition (Cooper 1994 a,b; Cooper and Kleinschmidt 1995); and launch effectiveness (Edgett 1994; Edgett and Parkinson 1994; Odelboom and Abratt 2000).

On the other hand, the control process is formalized through different gates. These gates are the entrance to each stage, as a checkpoint for a go or kill decision. They are the points where the path forward for the next play or gate of the process is decided, along with resources commitments. Gate meetings are usually staffed by senior managers from different functions, who own the resources required by the team for the next stage. Each gate is characterized by a set of inputs, a set of exit criteria, and outputs (Cooper and Kleinschmidt 1993). Inputs are the deliverables to a gate review, what the team delivers to the meeting. They are the results of the actions of the previous stage and are based on a standard menu of deliverables of each stage. The criteria are questions on which the project is judged in order to make the go/kill and prioritisation decision, and include qualitative and quantitative criteria. Finally, outputs are the results for the gate review, the decision at the gate, typically a go/kill/hold/recycle decision, and the approval of an action plan for the next stage (Cooper 1996).