Construction of the Research Model

The following text presents the implications of the case studies, expert interviews and findings in the literature on the Preliminary Model, in terms of subtraction, additions and choice of variables or items to form the Research Model to be utilized here. All adaptations to the Preliminary Model were made with the objective of qualitatively formulating a Research Model that includes a set of proposed key success factors for sales force readiness during product launch in the Swedish pharmaceutical industry, for testing with quantitative empirical data collection and statistical analysis.

The results and the findings from the six case studies and from the six expert interviews, summarized in earlier sections, led to several implications and adaptations to the Preliminary Model. Overall, the final Research Model was, like the Preliminary Model, found to be described in three stages, but with a much more limited set of variables. Stage one, Circumstances, aims to find any relations with relevant strategic background information for strategy formulation. Within stage two, Sales Force Factors, the identified key variables and items from the Preliminary Model were transferred into variables in the Research Model under the new name, Key Sales Force Factors. If a specific item within any variable in the Preliminary Model was identified as a standalone key success factor for launch success, it was transferred to represent a variable in the Research Model. In the third stage, Effect, the core items identified for measuring success were transferred in to the Research Model.

The findings in the literature review were consulted regarding the items identified as proposed key success factors by the experts and case studies, in order to validate them in relation to earlier scientific results and lessons learnt. However, as concluded in the literature review chapter, the literature on sales force management and selling during the launch phase is limited, which makes it less conclusive, however some guidance is provided in most areas.

120 Circumstances

The specific and detailed implication on the Preliminary Model for the Circumstances stage is described below.

Type of Product

The type of new product is understood here as whether the product type is new to the world and also for the company, or the product type is not new to the world but new to the company or that the product is only a revision of a product currently existing within the company. The conclusion from the case studies and expert interviews is that this variable is of interest when formulating a launch strategy. Based on the collected results and conclusions, the variable will be used in the Research Model, with the aim of finding how the type of newness of the launched product impacts the success of the launch.

The variable, type of product, was transferred as derived from the literature into the Preliminary Model and will also be used in the Research Model. The variable was based on and derived from a variable in the literature by Michael et al (2003). Michael et al.

(2003) measured product newness in a direct way based on a combination of two states of market newness and two states of company newness. In their questionnaire, two dichotomous questions were used to obtain this information from each respondent about the firm’s new product, and the answers were coded to place each new product into one of three groups (the-market & the-firm, not-the-market & new-to-the-firm, not-new-to-the-market & revision-to-the-firm). These groups were also aligned with earlier research conducted by Kleinschmidt and Cooper (1991), where essentially the same groups or categories were used (Kleinschmidt and Cooper 1991). Kleinschmidt and Cooper (1991) found that product innovativeness does have a significant impact on new product performance. However, this relationship between innovativeness and product performance was found to be U-shaped, showing that even non-innovative products perform well.

The recommendation gained from discussions with the experts as to how to measure this variable was followed. The recommendation meant that the information was collected directly according to one of the three groups: new-to-the-market & new-to-the-firm; not-new-to-the-market & new-to-the-firm; not-not-new-to-the-market & revision-to-the-firm.

121 Market Dynamics

The market dynamics part of the Preliminary Model is understood to be the nature of the market environment for the product at the time it was introduced, i.e. intensive or no competition, and/or major market dynamics or not.

Going back to the literature, the original variable (Hultink and Atuahene-Gima 2000) was developed for market volatility and the degree of unpredictability of new product’s market condition. The commercialization of pharmaceutical products is very uncertain (Rao 2000b). Hultink and Atuahene-Gima (2000) argue that in a more volatile market, salespeople are less able to forecast customer preferences, new introductions, price changes, etc. Support for this can also be found in Achrol and Stern (1988), where they note that market unpredictability creates adaptation problems for market participants (Achrol and Stern 1988). Hultink and Atuahene-Gima (2000) use this argument to support their hypotheses that “the positive effect of sales force new product adoption on selling performance is weaker when market volatility is higher”. This hypothesis was not supported in their empirical data. However, Atuahene-Gima and Micheal (1998) found that “salespeople who perceived the market environment as intensely competitive derived greater satisfaction from their efforts in new product selling than those who perceived the environment as less competitive”. Hultink and Atuahene-Gima (2000) measured market variable volatility through four items in the instrument; “state your opinion of the nature of the market environment for this new product at the time it was introduced: 1) stable – unstable, 2) certain – uncertain, 3) changes slowly – changes rapidly, 4) predictable – unpredictable”. This aimed to reflect the salesperson’s perception of the degree of predictability of the market conditions. As the original variable was set up to measure product adoption, while the aim of this research is to find the relations between the new formulated variables and product launch success, a modification was made, based on the results of the case studies and expert interviews.

Variables in the Preliminary Model were adjusted based on findings, to some extent from the case studies and to a greater extent from the expert interviews. It was identified that the market dynamics variable should exclude the two items “certain – uncertain” and

“predictable – unpredictable” based on the agreement that they were less relevant. On the other hand, the two items “stable – unstable” and “changes slowly – changes rapidly”

were retained, but broken down into two separate variables. The item “stable – unstable”

was agreed by all experts to fairly well include the meaning of the two items “certain – uncertain” and “predictable – unpredictable”. The two new variables were named stability of market, and market change rate. In the instrument, based on the experts’

recommendation, these variables will be measured as binary, asking the respondent

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which situation or state applied at time of launch: stable or unstable; changes slowly or changes rapidly.

Sales Force Factors

The adjustments made to the stage Sales Force Factors in the Preliminary Model to adapt it for the Research Model are described below.

New Product Adoption

In the Preliminary Model, the variable is derived from Hultink and Atuahene-Gima (2000), who have adopted the Atuahene-Gima (1997) definition of sales force new product adoption as being the degree to which sales people accept and internalize the goals of the new product (i.e. commitment) and the extent to which they work hard and smart to achieve these goals (i.e. effort). Commitment is an attitude (acceptance and emotional commitment to make it a success), while effort is defined as energy, force persistence and intensity of actions (Atuahene-Gima 1997).

Atuahene-Gima (1997) based the Commitment variable and its items on the work of House and Mitchell (1974), Mathieu and Zajac (1990) and Meyer and Allen (1991) (House and Mitchell 1974; Mathieu and Zajac 1990; Meyer and Allen 1991). The variable commitment in Hultink and Atuahene-Gima (2000) was measured by five items.

The case studies identified four items within commitment seen as key success factors.

These were: “sales representatives emotionally attached to the success of this new product”; “sales representatives would be willing to make further investment on my time and energy to support this new product”; “achieving objectives for this new products has a great deal of personal meaning to the sales representative”; and, “sales representatives feel a strong sense of duty to ensure the success of this new product”.

The item formulated as to whether a sales representative was emotionally attached to the success of this new product was identified as a key success factor in all case studies, while the other three only appeared once in a case study as an identified key success factor for successful launch. The item for the importance of whether the sales representative discusses this new product with other salespeople was not identified in any case study.

In the literature, Hultink and Atuahene-Gima (2000) found that new product adoption (combination of effort and commitment) is positively related to performance in selling a new product in the sales force, and that commitment correlates to performance by itself.

Atuahene-Gima (1999) suggests that it is of key importance that the sales force “buys”

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the new product in order to sell it effectively and efficiently. Atuahene-Gima and Micheal (1998) found that salespeople with a positive attitude to the potential of new products strengthen customer relations.

The consolidated expert view from the interviews supported and endorsed the main findings in the case studies. All experts highlighted the item; “sales representatives emotionally attached to the success of this new product”, as the most important key success factor.

Based on the findings in the case studies and recommendations from expert interviews and literature, it was decided to include the item “sales representatives emotionally attached to the success of this new product” in the Research Model. The item was defined as a variable and named Emotional Attachment. The variable was, after discussions with the experts, decided to be measured as binary, yes or no, in the instrument, with the aim of finding out how it contributes positively to a successful new product launch. It was decided that the other items be excluded from the Research Model.

The variable effort in Hultink and Atuahene-Gima (2000) was measured by five items.

The case studies identified two items within effort as potential key success factors:

“effort devoted to the new product in prospecting for customers” and “effort devoted for the new product in building customer relationships (compared to other products the sales representative has sold)”.

The three other items in the variable effort: “effort devoted to the new product in planning sales calls”; “effort devoted to the new product in collecting market information”; and, “effort devoted to the new product for using market information (compared to other product the sales representative have sold)”, were not identified in any of the case studies, nor by the experts, as potential key success factors.

As mentioned above, in the literature, Hultink and Atuahene-Gima (2000) found that new product adoption (combination of effort and commitment) is positively related to performance in selling a new product in the sales force. Atuahene-Gima (1997) suggests that a combination of commitment and effort yields greater impact on selling performance than the impact of each factor alone. However, he still acknowledges that the two dimensions of the adoption construct could have independent effects on selling performance.

Even though it is important to acknowledge “effort” in the sales force, based on the findings in the case studies and discussions with the experts, there is not enough support to include the variable “effort” or any of its items in the Research Model as a key success

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factor for sales force readiness during new product launch. The line of argument by Hultink and Atuahene-Gima (2000) that effort without commitment for a salesperson is not enough for effective performance in new product selling, could be true regarding adoption of the new product, but could be questioned as a key success factor for launch and is taken out as a variable in the Research Model. It is possible to argue that effort is always important, maybe equally important, when selling a product, whether it is old or new and independent of industry.

The line of argument for excluding the variable “effort” and its items from the Research Model gains strong support in the conducted case studies and in the expert interviews.

Also, although Hultink and Atuahene-Gima (2000) found that new product adoption is related to new product selling performance, further support for excluding “effort” as a key success factor is derived from the details in their results. They found that commitment correlates to performance while effort is unrelated to performance (Hultink and Atuahene-Gima 2000).

Sales Control

Sales control systems refer to systems in which managers can align the behavior and actions of the sales force, or individual sales representatives, with the organization’s objectives (Bello and Gilliland 1997; Jaworski 1988; Jaworski and MacInnis 1989).

Two types of control systems are identified in the literature: formal and informal (Jaworski 1988; Ouchi 1979). The variable here is in line with the formal type. The formal control system in the literature is further divided into behavior-based control and outcome-based control.

Behavior Control

The extent to which managers emphasize procedures and activities in monitoring, evaluating and rewarding the salesperson is included in a behavior-based control system (Anderson and Oliver 1987; Jaworski 1988; Ouchi 1979).

In the Preliminary Model, the variable is derived from Hultink and Atuahene-Gima (2000) and adopted from the Atuahene-Gima (1997) conceptual model. Hultink and Atuahene-Gima (2000) measured the variable with four items; however, five items were initially included. In the Preliminary Model all five items were kept to fully reflect the earlier conceptual model by Atuahene-Gima (1997).

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In the case studies, the items that were identified as key success factors were:

“salespeople are held accountable for their actions in selling the new product, regardless of results they achieve”; and “my supervisor monitors the extent to which salespeople follow established procedures pertained to the new product”. The former item was identified in all case studies, while the latter only in two. None of the three other items gained support in the case studies for being a potential key success factor. From the case studies, the excluded items were: “my supervisor evaluates the procedures salespeople use to accomplish the task of selling this new product”; “my pay increases and other tangible rewards depend on how well I follow established sales procedures pertained to this new product”; and, “my pay increases and other tangible rewards depend on my knowledge of specific procedures and practices in selling this new product”.

Some evidence in the literature has been collected by empirical studies suggesting that behavioral control of the sales force is one of the most important factors for a successful launch of a new product (Ramaswami 1996). Although Hultink and Atuahene-Gima (2000) argue that if a salesperson is committed and willing to extend his/her effort in selling a new product, he or she requires flexibility and discretion, leading to the hypothesis that behavior control weakens the link to adoption and selling performance.

This was not supported significantly in their results, but they do suggest an appropriate sign that the hypothesis is supported. However, the item identified in all the case studies as a key success factor was the one item: “salespeople are held accountable for their actions in selling the new product, regardless of the results they achieve”, which had been excluded from their measurement instrument by Hultink and Atuahene-Gima (2000). The conclusion of an appropriate sign in the research from Hultink and Atuahene-Gima (2000) might thus be disregarded, or at least questioned. This argument is based on the findings from the case studies, as it may have been the case that the most important item was taken out of their research, and the results of a signal for a weaken relationship to selling performance might have been neutralized or may even have rendered opposite results if the item had been included. Furthermore, Lloyd and Newell (2001) acknowledge that a common problem with control mechanisms is the development of control systems which are too rigid and which conflict with the need for discretion (Lloyd and Newell 2001). However, Piercy et al. (1997) found evidence that in more effective sales organizations, field sales managers spend significantly more effort on behavior-based control, which suggests support for the importance, even though it is acknowledged that behavior control in this study was measured by slightly different items. Other literature has also found a strong relationship between sales force behavioral performance and outcome performance when examining the relationship of the control system with design, sales force performance, and organizational effectiveness (Babakus et al. 1996;

Baldauf et al. 2001a; Baldauf et al. 2001b). Also, Blackshear et al. (1994) found that

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pharmaceutical representatives’ behavior, in a US firm, does have a positive effect on sales performance (Blackshear and Plank 1994).

As to the items connecting pay increase with following procedures and knowledge of those procedures, Piercy et al. (1997) found that in more effective organizations, rewarding is concerned predominately with feedback and rewards, which are often non-financial for the quality of activities as well as results. Also, Cravens et al. (1993) found that incentive compensation played a limited role in sales force control systems. They also suggest the need for a proper blend between field sales management and compensation control. These results suggest support of the case study findings for not including these items.

The expert interviews supported the notion that behavioral control of the sales force is one of the most important factors for a successful launch of a new product. Their consolidated view concluded the case study findings. There were some different opinions about inclusion of the other items in the Research Model; however, they all agreed that the most important item was to hold sales representatives accountable for their actions regardless of the results.

Based on the findings in the case studies, recommendations from expert interviews and findings in the literature, the item “salespeople are held accountable for their actions in selling the new product, regardless of results they achieve” was defined as a variable in the Research Model and named Activity Accountability. It was decided, after discussions with the experts, that the variable be measured as binary, yes or no, in the instrument, with the aim of finding how it contributes positively to a successful new product launch.

It was decided to exclude the other items from the Research Model.

Outcome Control

As described in the literature, an outcome-based control system is a subgroup of a formal control system (Jaworski 1988; Ouchi 1979). Outcome-based control pertains to the emphasis managers place on results when monitoring, evaluating and rewarding the sales force and is used to directly influence the performance objectives set for the sales representative (Hultink and Atuahene-Gima 2000). It provides incentives for the sales representative to take responsibility for results (Jaworski 1988; Ouchi 1979), but it also transfers risk to the sales representatives, especially in terms of environmental conditions

As described in the literature, an outcome-based control system is a subgroup of a formal control system (Jaworski 1988; Ouchi 1979). Outcome-based control pertains to the emphasis managers place on results when monitoring, evaluating and rewarding the sales force and is used to directly influence the performance objectives set for the sales representative (Hultink and Atuahene-Gima 2000). It provides incentives for the sales representative to take responsibility for results (Jaworski 1988; Ouchi 1979), but it also transfers risk to the sales representatives, especially in terms of environmental conditions