Wednesday, September 26, 2012 Marketing Research Blog
More Than I Wanted: Why Some Products Overdeliver by Jan Heide
We’ve all experienced the disappointment of buying a product whose capabilities fall short of our expectations. But there are increasing reports of customer frustration with products whose capabilities are “too much.” This type of product management mistake leads to negative customer experiences, as buyers find the product over-engineered, hard to fully utilize, difficult to understand, or simply not ideal. While marketing research has focused on the causes of the opposite problem—why firms make products that underdeliver—more research is needed in the area of overdelivery.

Unlike other research in this area which looks at overdelivery problems from a customer perspective, my forthcoming article in the Journal of Marketing (co-authored with Bryan Lukas and Gregory Whitwell) explores overdelivery from the supplier side. In other words, what leads firms to overdeliver in the first place? My research finds that one possible source of overdelivery resides in the company’s organizational culture. 

Management scholars have identified four types of organizational culture: adhocracy, market, bureaucracy, and clan. My research finds that the first two—adhocracy and market—are particularly susceptible to overdelivery errors. A company with an adhocracy culture focuses on being cutting-edge; its managers are committed to experimentation and pioneering, often for its own sake. Measures of success in this type of company include providing unique and original products with frequent innovations. A company with a market culture is results-oriented and defines success in competitive terms such as relative market share and penetration. While management researchers highlight the virtues of adhocracy and market cultures in driving firm performance, my results suggest that these organizational cultures may also lead to undesirable effects for the firms’ customers.       

So, what if your company’s culture fits the adhocracy or market category? As a business leader, what steps can you take to offset the risk of launching products that overdeliver and frustrate your customers?  My research finds that companies with adhocracy cultures are less likely to overdeliver if their overall cultures also include a strong customer orientation. This orientation enables them to tie their emphasis on product leadership to the needs of particular customers, rather than applying them in a standard fashion across their customer base. Market cultures, on the other hand, do not exhibit such a pattern, suggesting that a market culture’s product decisions are inherently more difficult to restrain.