CUSTOMER FAMILIARITY WITH NEW INDUSTRIAL PRODUCT TECHNOLOGY AND ITS INFLUENCE ON ADOPTION: THE CASE OF DE BEERS DIAMOND EXTRACTION EQUIPMENT #1

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1 CUSTOMER FMILIRITY WITH NEW INDUSTRIL PRODUCT TECHNOLOGY ND ITS INFLUENCE ON DOPTION: THE CSE OF DE BEERS DIMOND EXTRCTION EQUIPMENT #1. Nbbie & J.L. Steyn* 2 Grdute School of Technology Mngement University of Pretori, South fric *jsper.steyn@up.c.z BSTRCT n investigtion ws conducted into the influence of industry customers fmilirity with new technology on their decisions when purchsing discontinuous industril products. This ws done in the context where the supplier nd customer orgnistions re entities in the sme compny. Even in this fvourble context, continuous products remined successful despite better solution being vilble. Literture on this close type of reltionship is sprse, mostly becuse informtion on such internl processes is generlly regrded s competitive. The cse investigted ws the DebTech division of De Beers, nd their experience with products tht they design nd mnufcture for the globl dimond mining industry. Product developer nd customer dt from pplicble projects ws nlysed, nd interviews nd observtions were conducted. The results indicte tht fmilirity with the product technology fvourbly influences perceptions of newness, sfety, nd the ese of integrtion of product. Fmilirity increses customers propensity to recommend nd purchse new-technology products. OPSOMMING Die invloed is ondersoek vn vertroudheid met nuwe tegnologie op nywerheidskliënte se nkoopbesluite vn diskontinue nywerheidsprodukte. Dit is gedoen in die konteks wr die verskffer- en kliëntorgnissies entiteite in dieselfde mtskppy is. Selfs in hierdie gunstige opset is ervr dt kontinue nywerheidsprodukte meer verkoop, l is n beter oplossing beskikbr. Litertuur oor hierdie tipe verhouding is skrs, hoofsklik omdt inligting oor sodnige interne prosesse normlweg s mededingend beskou word. Die gevl is ondersoek vn die DebTech-fdeling vn De Beers se ervring met produkte wt dit vir die internsionle dimntmynbedryf ontwerp en vervrdig. Produkontwikkelr- en kliëntdt vn toepslike projekte is ontleed, ngevul met onderhoude en wrnemings. Die resultte toon dt kliënte se vertroudheid met die produktegnologie hulle persepsies vn nuutheid, veiligheid, en integreerbrheid vn nuwe-tegnologieprodukte gunstig beïnvloed. Tegnologievertroudheid verhoog hulle geneigdheid om nuwe-tegnologieprodukte n te beveel en te koop. # 1 This rticle is n extended version of pper presented t the 2011 ISEM conference. 2 * Corresponding uthor South fricn Journl of Industril Engineering My 2013 Vol 24(1): pp

2 1. INTRODUCTION Compnies innovte to chieve nd mintin sustinble position in their mrkets. Technologicl innovtion is n importnt strtegic element for this purpose. This lso holds true for the industril equipment mrket. However, s long go s 1979 Cooper [5] observed tht the high incidence of industril new product filure hd long been cknowledged. fter much-quoted empiricl study on the dimensions of new product success nd filure experienced by industril product producers in Ontrio nd Quebec in Cnd, he stted tht the secrets to success in industril product innovtion remined mystery, s the problem ws very complex. In 1998, bsed on study of seven discontinuous product projects trgeted t consumer, commercil, nd industril mrkets, Veryzer [21] found tht lck of fmilirity ws key reson for customers resisting discontinuous ( relly new ) products. Tht this remins chllenge is evidenced by study, reported s recently s 2011, on customers informtion needs during innovtion doption (Tlke & Colrelli O Connor [19]). Similr resistnce to technology innovtions led to recent reserch in the industril project [13] nd industril service [12] domins. discontinuous (rdiclly innovtive) product is less likely to succeed becuse of insufficient understnding of the complex qulittive resoning tht the customer tends to pursue in rriving t the decision to procure it. The two clsses of technology involved, lso referred to s evolutionry nd disruptive (Tolfree & Jckson [20]), influence the decision-mking process, s ny new cquisition hs n impct on the existing business environment. The first uthor lso observed the phenomenon of unexpected sles filure of discontinuous products t DebTech (De Beers Technology), subsidiry of the De Beers group, while employed s n electronics engineer working with informtion relting to continuous nd discontinuous products developed over the previous decde. Even in this fvourble context, continuous products remined successful despite better solution being vilble. Literture on this close type of reltionship between product-developing nd customer orgnistions is sprse. This cn be scribed to significnt degree to informtion on such internl processes normlly being regrded s competitive [22]. ginst this bckground, it ppered tht cse study on this phenomenon could be useful resource to ssist further reserch in this context. De Beers is the world s leding dimond mining compny, with opertions in fric, Russi, nd Cnd. It is mde up of mny compnies in vrious geogrphic regions. DebTech is the technology division, forming the reserch nd development rm of De Beers. It hs n nnul turnover of USD 30 million nd stff complement of bout 150 minly engineers (2008). More detil on the industry context cn be found in [14] nd [2]. The min focus of Debtech hs lwys been the dimond industry. It ws formed in 1948 s prt of the De Beers Dimond Reserch Lbortories, nd is bsed south of Johnnesburg, South fric. DebTech competes with free mrket equipment suppliers, since the opertions re not obligted to purchse exclusively from DebTech. Competitors such s Flow Sort nd Ultrsort hve become significnt plyers in the dimond-sorting equipment supply industry. For the first 60 yers of its existence, DebTech s products nd services were vilble only to the De Beers fmily of compnies round the world; but in 2008 it strted mking selected products nd services vilble to the broder mrket. These included dimond x- ry sorting technology, the Scnnex low dose x-ry body scnner, the mgnetic roll seprtor, dense-medium controllers, nd its metllurgicl service. More thn 400 products currently operte in the mny De Beers mines. These products hve been reserched, developed, nd mnufctured, nd re serviced nd supported, by DebTech. It procures from key technology suppliers while implementing products in collbortion with relevnt De Beers business prtners. Different equipment uses different technologies such s lser, x-ry, nucleonic rdition, nd induction. More thn 99% of De Beers dimonds re recovered by DebTech technology, with some of its units hving been in opertion for more thn 20 yers. DebTech lso offers full fter-sles service. 153

3 Robertson [16] detils the clssifiction of innovtions s continuous or discontinuous s follows: continuous innovtion hs the lest disruptive influence on estblished behviour ptterns. ltertion of product is involved, rther thn the estblishment of new product. dynmiclly continuous innovtion hs more disruptive effects thn continuous innovtion, lthough it still does not generlly lter estblished behviour ptterns. It my involve the cretion of new product or the ltertion of n existing product. discontinuous innovtion involves the estblishment of new product nd of new behviour ptterns. By clssifying the product rnge of DebTech s continuous or discontinuous, this study seeks to determine whether the continuous or discontinuous technology on which the product is bsed is relted to its sles vi the fctor of technology fmilirity. Rogers [17] dels extensively with the effect of the ttributes of innovtions in more generl context: on their rte of doption, in the ctegories of reltive dvntge of the innovtion over its predecessor; comptibility with existing vlues nd experiences of customers; complexity; trilbility (degree to which it cn be tried out, experimented with); nd observbility (degree to which its results re visible to customers). Fmilirity would be relted to, or be promoted by, these chrcteristics. distinction should be mde between the fmilirity tht the developing firm hs with the new technology, nd the technology fmilirity of the potentil dopter. Dnneels & Kleinschmidt [6] del with the former in n nlysis of 262 industril projects from 125 firms, concluding tht it does not correlte with enhnced mrket performnce. In recent work on customers informtion needs during innovtion doption in smple of 112 industril product development projects in Germny in six brod industry ctegories, Tlke & Colrelli O Connor [19] found tht technicl messge elements were countereffective, while usbility informtion nd finncil rguments were highly relevnt to mrket performnce. In recently-published cse study on Fujifilm Corportion s domintion of the medicl computed rdiogrphy mrket since introducing digitl medicl x-ry imging systems in 1983, Koh & Miki [11] concluded tht Fujifilm s success over five mjor competitors ws relted to their devoting significnt resources towrds tiloring their communiction to the customers evlution xes. thide & Klink [1] studied sellerbuyer reltionships during new product development in 334 smll- to medium-sized firms in technology-bsed industril settings. One of the situtionl chrcteristics considered ws tht of buyers unfmilirity with the innovtion s underlying technology. However, this did not result in outright preference for ny prticulr reltionship. Tlke & Hulting [18] investigted the influence of ddressing broder set of stkeholders thn only customers in mnging diffusion brriers relted to industril product lunches. In cross-industry study in Germny, they collected dt from 113 new product development projects. While finding support for trgeting multiple diffusion brriers, lowering customer doption brriers remined dominnt. Similr chllenges were encountered in inter-compny knowledge trnsfer of discontinuous product technologies, such s those found in studies on industril equipment product development projects in the United Sttes [4]. In the cse of 3M Corportion [7], dedicted technology trnsfer group is proposed in the context of lrge corportion with widely diverse products in multiple sectors. ginst the bckground of the bove informtion from broder mrkets, this study sought to determine in n intr-compny reltionship between industril product supplier nd customer whether the customer s technology fmilirity ws relevnt fctor to tke into ccount, nd to which to llocte resources, in plnning product development. This type of reltionship is not uncommon in the minerls processing environment. It differs from tht of independent compnies 154

4 developing nd supplying industril equipment, or of the inter-compny sitution in the lrge diversified corportion covered in existing literture. 1.1 Objectives These observtions from industry led to sttement of the reserch problem: Discontinuous industril products pper to be less redily purchsed by intr-compny industril customers thn would be expected by product developers. The reserch questions derived from the reserch problem nd the relted literture survey were: Does lck of fmilirity with new technology led to intr-compny customer resistnce to cquiring discontinuous industril products using the new technology? How does the level of fmilirity with technology influence the level of recommendtion for tht technology when embedded in n industril product? How does the level of fmilirity with technology influence the perceived level of newness of tht technology in the context of industril products? How does the level of fmilirity with technology influence the perceived level of sfety of tht technology in the context of industril products? By nswering the reserch questions, the objective of this study ws to understnd whether, nd to wht extent, enhnced technology fmilirity would influence the doption rte of discontinuous industril products. The resulting proposition is: Lck of fmilirity with new technology leds to intr-compny customer resistnce to discontinuous products using the new technology. 1.2 Fctors tht ffect product sles It is recognised tht mny fctors influence whether or not the customer decides to purchse products. Cooper [5] lists 21 vribles in five groupings from prior work on new product success, nd continues to study the effect of 18 empiriclly. Rogers [17] lists five ctegories of vribles determining the rte of doption of innovtions, including the perceived ttributes detiled bove. In summry, some of the customer fctors tht ffect product sles re the customer s economic environment, demogrphics, nd environmentl concerns. Product fctors include qulity, vlue for money, performnce, fter-sles support, comptibility with the customer business, nd technology nd product fmilirity. Bsed on the literture bove, technology fmilirity ws proposed s n importnt fctor contributing to discontinuous product sles in the context of the cse studied. Bsed on Prk & Lessig s work [15] on product fmilirity, it is proposed tht technology fmilirity cn be mesured by: 1. How much person knows bout the technology, nd 2. How much person thinks he/she knows bout technology. From this logic, the following working definition of technology fmilirity ws dopted for this study: Technology fmilirity is the cquintnce with or knowledge of product, process, tool, or method employed in the cretion of goods or services, bsed on previous interctions nd experiences tht person hs, or is ssumed to hve. It ppered tht gp existed between pst reserch nd tht of the topic of this cse study: technology fmilirity within the context of long-stnding intr-compny reltionship between industril product supplier nd customer. Little informtion could be found tht nlysed unfmilirity nd its effect on continuous nd discontinuous innovtion of products. The intention ws for this cse study to dd to the body of knowledge on the 155

5 effect of customer fmilirity with new technologies on the doption of discontinuous products incorporting those technologies. 2. CONCEPTUL MODEL Using linking logic structure recommended by Cvness [3], digrmmtic model (Figure 1) ws constructed to represent the conceptul elements, the reltionships between them, nd the ttributes of ech element. The identified components tht mke up product nd technologicl unfmilirity, prticulrly regrding discontinuous products, re listed. Sources of informtion for the reserch nd items tht would need to be ddressed re listed, nd the guideline theories to be employed re indicted. Source of informtion Components of customer unfmilirity with discontinuous products Wht needs to be ddressed? Guideline theoreticl frmework solution Customer interviews 1. Uncertinty of product benefits Mrketing & customer knowledge Internl mrketing improvement 2. Inbility to understnd product opertion Trining nd eduction Lerning nd eduction frmework Dt rchives 3. Perception of product sfety Customer knowledge Technology trnsfer model Observtion 4. ccordnce of the product with processes Design nd development Probe nd Lern process 3. RESERCH METHODOLOGY 3.1 Type of reserch Figure 1: The conceptul model single cse, DebTech s development of continuous nd discontinuous technology products, is investigted. The single cse pproch ws ssessed to be pproprite becuse the input ws perceived to hve been the sme in the instnces considered, yet the outputs differed. lso, the input ws from compct focused entity with long-estblished method of opertion, so its work methods in generl could be ssumed to be coherent nd consistent, not presenting less obvious or hidden vribles tht were not ccounted for. ccording to Hussey & Hussey [10], the cse study pproch provides for n extensive exmintion of single instnce of phenomenon. It provides for rich detil by llowing phenomenon to be explored within prticulr context. ccording to Flyvbjerg s [8] clssifiction of cse selection, the cse study presents the chrcteristics of criticl cse, i.e. providing informtion tht permits logicl deductions of the type, if this is vlid for this cse, then it pplies to ll cses. This is proposed becuse of the close reltionship over n extended period of time nd the levels of trust in DebTech evidenced by the doption of its continuous-technology products. If technology 156

6 fmilirity is hurdle even in this fvourble doption environment, it is lso likely to be so in lrge body of supplier-customer reltionships, whether long-stnding or more recent. Flyvbjerg [8] lso points to the potentil benefit for enhnced lerning when the resercher is within the context tht is being studied, thus gining dvnced understnding. Experience indictes tht the cse study method contins greter bis towrds flsifiction of conceived notions thn towrds verifiction. 3.2 Methods of dt collection Being cse study, vrious methods of dt collection were used to obtin nswers to the reserch questions. Cse study reserch theory [22] indictes using evidence from multiple sources for the investigtion. The dt collection pproch consisted of collecting evidence from DebTech s project dtbse documenttion nd rchives; interviews with DebTech project mngers, senior stff nd customers; customer questionnire; informl discussions; nd direct observtion. More detil on these dt sources is provided below. 3.3 Tringultion of dt sources Yin [23] dvises on chieving tringultion by using multiple sources of dt to obtin convergence. Since different methods hve their own strengths nd weknesses, multiple sources of dt tht converge on the sme deduction strengthen the findings of cse study. s mentioned bove, rchive dt, interviews, questionnires, nd observtion dt were employed to chieve tringultion. Observtion nd rchivl dt were used to formulte the questionnire questions. Feedbck from the questionnires ws used s input to the questions for semi-structured interviews. The nlysis nd conclusions integrted the results from the observtion, rchivl dt, questionnires, nd interviews into consistent set Dt rchives Dt rchives t DebTech contin comprehensive record of documents relting to mny spects of the orgnistion from technicl product mke-up, to project mngement records, to sles nd mrketing informtion. The dt rchives store historicl informtion tht could not hve been collted s primry dt t the time of dt collection for this study, becuse the people involved might no longer hve been vilble. The rchives were nlysed to extrct informtion relting to product sles, cost of products, reltive competitor prices nd technologies, technology employed in products, quntities of units sold, customer cceptnce nd feedbck, nd time-bsed cceptnce of technologies employed in products. The fct tht the dt rchives were so comprehensive enbled the resercher to skip (some) primry dt collection nd focus on deriving conclusions from the nlysis of dt gthered by mny personnel over n extended period Questionnires Two questionnires relting to the reserch questions nd reserch vribles were compiled nd used to cquire feedbck from DebTech stff nd customer representtives. The questions re recorded in Tble 1, questions 1.3 to 1.5, nd in Tble 2. The questions were designed to llow for ctegory dt to be provided, in order to limit mbiguity nd ese completion, nd so enhnce the response rte. The customer questionnire ws distributed by electronic mil to selection of 26 DebTech customers from popultion of bout 40. The selected recipients were responsible for bout 80% of DebTech s sles revenue. The customer mines not pproched were smller opertions in remote loctions round the world with limited Internet connectivity, tht presented lnguge brriers. Three customer questionnires were completed in structured interview formt Observtion The purpose of using direct observtion ws to exmine directly wht people do, s opposed to sking for their verbl interprettion of wht they do. Direct observtion ws 157

7 used to verify respondent informtion obtined from interviews. It consisted primrily of monitoring trinee technicins nd their rection to continuous nd discontinuous products, s ech type ws presented to them during forml product trining sessions. It lso included observtions obtined from the DebTech trining, customer support, mrketing, sles, nd engineering deprtments Interviews Semi-structured interviews using the DebTech questionnire were conducted with the DebTech customer support mnger nd with senior stff from trining, sles, mrketing, nd engineering. This llowed comprehensively diversified views nd ssessments from ll of the customer-fcing functions. s mentioned bove, semi-structured interviews were lso conducted with three customer senior stff to obtin deeper understnding of how respondents would interpret the questions. The interviews llowed for person to-person interction, nd the resercher could probe informtion given by the interviewee to obtin rich understnding of the respondent s perception [9]. In this wy, the interview methodology offered n dptive mens of obtining new informtion tht might not hve been identified by structured questionnire. 3.4 Limittions nd ssumptions of the study The scope of the study is limited to the intr-compny context, s described bove. It might not pply in closer supplier-customer reltionships, or where one or more of the other fctors described in prgrph 1.2 bove exert n inordintely lrge influence. 4. RESULTS ll projects undertken t DebTech between the yers 1999 nd 2009 bout 20 ltogether were considered for study by screening records in the dt rchives. This time period ws selected becuse of the meticulous record-keeping, especilly in electronic formt, over this period. It ws lso the lst decde in which DebTech s mrket ws primrily the De Beers compnies, llowing for consistent intr-compny supplier-customer reltionship to be studied. Ten projects were excluded due to there being no compny or customer stff still involved or vilble, or due to technicl or sles filure. From the remining projects, two technologies were chosen tht would ccurtely represent continuous nd discontinuous technology t prticulr time. X-ry technology represented continuous technology, nd its product rnge could lso be regrded s continuous in nture. It hd been in the mrket for 31 yers, with 40% of its sles occurring in the lst five yers of tht period, showing incresed sles s its lter developments moved from being perceived s discontinuous to continuous. Lser technology represented discontinuous technology, s its product rnge could be regrded s discontinuous. Exmples of pplictions of the technologies re: X-ry-bsed dimond sorter - The x-ry-bsed dimond sorter hs feeder ssembly tht conveys mteril in mono-lyer nd llows free-fll down chute. Here the ggregte psses through n x-ry bem tht induces luminescent prticles (predominntly dimond) to emit light. detector ssembly detects the emitted light. fter preset trvel dely to the ejection zone, corresponding ir jet ejector is ctivted, nd dimond nd other luminescent prticles re deflected into concentrte chute for further sorting. Lser Rmn spectroscopy sorter - The lser Rmn spectroscopy sorter is single-prticle sorter for finl recovery of dimonds from x-ry concentrtes. It replces hnd sorting. Single prticles re sent through lser bems, where dimond prticles shift the wvelength of the reflected lser bem in chrcteristic mnner. The shift is identified electroniclly, nd the dimonds re ejected by mechnicl or ir ejector to concentrte. The x-ry nd lser technologies hve mny similrities in mrket ppetite, product size, complexity, cost to mnufcture, nd level of competency required (from the technicl nd 158

8 support personnel) to operte nd mintin the units. Becuse of these fctors, comprison between x-ry nd lser technologies ws ssessed to offer n exmple of technology fmilirity nd its influence on customer resistnce to new products tht employ continuous or discontinuous technologies. 4.1 Feedbck summry DebTech dt Dt extrcted from the rchives (Q1.1 nd 1.2) nd from interviews conducted with key DebTech representtives (Q ) ws used to obtin the informtion regrding the reserch vribles listed in Tble 1. Tble 1: Reserch vribles quntified by DebTech Vrible nme Mesurement indictor Results Proportion of successful continuous products. (ll technologies) Proportion of successful discontinuous products. (ll technologies) DebTech technology newness rting. (X-ry/Lser) DebTech sfety rting. (Xry/Lser) DebTech integrtbility rting. (Xry/Lser) Q1.1. For wht proportion of ll continuous products developed hs DebTech sold more thn 1 unit? Q1.2. For wht proportion of ll discontinuous products developed hs DebTech sold more thn 1 unit? Q1.3. How do you rte the newness of this technology? -New invention -Technology improvement -Mture technology -ging technology Q1.4. How do you rte the sfety spects of this technology? -No risk -Low risk -High risk Q1.5. How do you rte the ese with which this technology cn integrte with the customer environment? - Cnnot integrte - Esy to integrte - Difficult to integrte Of totl of 7 continuous product rnges (limited to those developed over the lst 10 yers), totl of 6 product rnges hve sold more thn 1 unit. This represented proportion of 0.9. Of totl of 14 discontinuous product rnges (limited to those developed over the lst 10 yers), totl of 4 product rnges hve sold more thn 1 unit. This represented proportion of 0.3. X-ry: Rted between mture technology nd technology improvement Lser: Mture technology X-ry: Low risk Lser: Low risk X-ry: Esy to integrte Lser: Esy to integrte From these rchive results, it cn be seen tht continuous products chieved much higher sles success rtio thn discontinuous products. The interview results showed tht x-ry product innovtions were ssessed t the technology improvement (novel) or mture technology ppliction level, with low sfety risk, nd were esy to integrte. Lser technology-bsed product innovtions were ssessed t the sme levels, except tht technology newness ws ssessed t the mture level. Perspectives gined from the DebTech interviews were: Trining: Only fter comprehensive demonstrtion nd fmilirity with the new technology it brings, re customers perceptions tht it will cuse dditionl work or disrupt existing workflow ptterns removed, nd they become keen to dopt it. Customer support: Customers re very sensitive to the impct tht new technology will hve on their fcility. Mining plnts re very cpitl intensive, nd chnge to single piece of equipment my hve severe repercussions on other pieces of equipment (from 159

9 other suppliers) with which it integrtes. New technology my require modifiction of the services (compressed ir, chilled wter, power). Becuse the decision regrding the procurement of lrge ssets t the mine rests with n executive committee, forml risk ssessment is usully needed to propose ny new technology. Yet customers ctively require new technologies where the current technology is proving to hve negtive impct on production output (technology pull). Mrketing: Cost of equipment plys mjor role when new mine is being constructed. Often seprte tems construct nd then operte nd mintin the mine. The construction tem usully prefers reduced upfront cost (which reflects fvourbly on their project budget). However, when the tem tht opertes nd mintins the equipment mkes the purchsing decision (s in the cse of fcility upgrde), fctors such s running cost, relibility, efficiency, nd mintinbility re most importnt. Technology fmilirity plys minor role when the construction tem mkes purchse decisions, but mjor role when the operting tem mkes this decision. Sles: In the construction of new mine or sorting fcility, two types of tems could be involved with the project: either the owner s tem, or the project tem (usully consisting of consulting project house). These two tems pproch the selection of technology differently. The project tem my be more wre of the ltest technology vilble, while the owner s tem is more concerned with getting the technology tht fits their workflow nd hs the necessry trck record of relibility nd efficiency. The owner s tem tends to stick with wht they know. ny new technology must hve dvntges (cost, security) over the old, nd must not require dditionl work n issue tht the owner s tem is more sensitive to. Engineering: Customer fmilirity plys mjor role in the design of new equipment. Often the underlying technology hs to be msked with n esy-to-use interfce. Complexity is hidden. The customer s perception of technology is used to engineer the product. For exmple, if the inherent sfety risk of technology is concern, then the engineering effort my focus on incorporting redundnt sfety sub-systems, or n externl sfety uthority my be used to pprove the design in order to build the customer s confidence in the product. Customer fmilirity levels re determined before product development; they influence the design of the equipment in order to increse the likelihood of cceptnce of the product Customer dt The customer responses reported in Tble 2 were obtined from 13 respondents (three by interview) fter distributing 26 questionnires. Given the limited number of compnies involved, nd the dvnced level of contextul experience of the respondents, it ws ssumed tht the informtion obtined would support its summry interprettion in the sections tht follow. Respondents to the questionnire indicted 0.7 level of fmilirity with x-ry technology (continuous technology) nd 0.2 level of fmilirity with lser technology (discontinuous technology). In the following sub-prgrphs, these fmilirity rtings re compred with the feedbck regrding the four dependent vribles in Tble 2, viz. 1. the level of recommendtion for the technology 2. the perceived level of newness of ech technology in contrst with the ctul level of newness determined by DebTech 3. the sfety rting of ech technology 4. the integrtbility of the technology Ech is relted to the pplicble elements in the conceptul model in the relevnt subprgrph below. 160

10 Tble 2: Reserch vribles quntified from customer responses Vrible nme Mesurement indictor Results: x-ry (greement*) Results: lser (greement*) Technology fmilirity: Customer wreness of technology Q2.1. re you wre of this technology? (Y/N) Technology fmilirity: Customer knowledge of technology Technology fmilirity: Customer comprehension of technology Technology fmilirity: Customer ppliction of technology Q2.2. Do you understnd this technology? (Y/ little/n) Q2.3. Hve you ever used this technology? (Y/N) Q2.4. Does your workplce currently hve this technology? (Y/N) Customer technology recommendtion rting Q2.5. Would you recommend this technology for your workplce? (Y/N) Customer technology newness rting Q2.6. How do you rte the newness of this technology? New invention Technology improvement Mture technology ging technology New: 0 Improving: 0.3 Mture: 0.5 ging: 0.2 New: 0 Improving: 0.7 Mture: 0.3 ging: 0 Customer sfety rting Q2.7. How do you rte the sfety spects of this technology? No risk Low risk High risk No risk: 0.1 Low risk: 0.6 High risk: 0.3 No risk: 0.1 Low risk: 0.5 High risk: 0.4 Technology impct: Technology ccordnce Q2.8. Does this technology semlessly integrte with your workflow ptterns? Cnnot integrte Difficult to integrte Esy to integrte Integrte: Cnnot: 0 Difficult: 0.2 Esy: 0.8 * Level of greement: 1.0 indictes ll greed; 0 indictes none greed. Integrte: Cnnot: 0 Difficult: 0.5 Esy: The level of recommendtion of technology The level of recommendtion of technology reltes to questions on both the Uncertinty of product benefits nd Inbility to understnd product opertion, s listed in the conceptul model (Figure 1). The level of recommendtion gve n indiction of the number of respondents who would motivte for this technology to be purchsed. Tking the question Would you recommend this technology for your workplce? The responses were s summrised in Figure 2: X-ry technology: 10/10 respondents would recommend this technology. Lser technology: 6/10 respondents would recommend this technology. 161

11 Technology fmilirity levels vs level of recommendtion bsed on questionnire feedbck Technology fmilirity index Would recommend this technology X-ry technology Lser technology Figure 2: Technology fmilirity levels nd the levels of recommendtion for two technologies It cn be seen tht higher levels of fmilirity with technology correspond with n incresed likelihood of recommending tht technology. Becuse the decision to purchse equipment for mine is collective one, higher levels of recommendtion cn be construed to increse the likelihood of decision to purchse the product The perceived level of newness of technology The perceived level of newness of technology reltes to questions on the Uncertinty of product benefits nd Inbility to understnd product opertion, s illustrted in the conceptul model (Figure 1). The rting of DebTech nd tht of the customer regrding the newness of x-ry nd lser technology is shown in Figure 3: ging technology Mture technology Technology improvement New invention Newness of technology DebTech Rting Customer Rting ging technology Mture technology Technology improvement New invention Newness of technology DebTech Rting Customer Rting Rting of newness of x-ry technology Rting of newness of lser technology Figure 3: Rting of newness of technology by DebTech nd the customer 162

12 It cn be seen tht in the cse of x-ry technology, where the customer hs higher level of fmilirity with technology, the corresponding rting for the newness of technology is closer to the DebTech ssessment level. In contrst, in the cse of lser technology, where the customer hs lower level of fmilirity, the customer sees the technology s newer The perceived level of sfety of technology The perceived level of sfety of technology reltes to question on the Perception of product sfety s illustrted in the conceptul model (Figure 1). The rting of DebTech nd tht of the customer regrding the sfety of x-ry nd lser technology is shown in Figure 4: High risk High risk Low risk Sfety rting Customer Rting DebTech Rting Low risk Sfety rting Customer Rting DebTech Rting No risk No risk Sfety rting of x-ry technology Sfety rting of lser technology Figure 4: Rting of sfety of technology by DebTech nd the customer In the cse of x-ry technology (continuous technology), where customer hs higher technology fmilirity rting, the customer rtes the sfety level of this technology t similr level to DebTech. In contrst, the rting of the customer regrding lser technology (discontinuous technology) bering in mind tht the customer hs lower level of fmilirity with this technology tends towrds rting this technology s higher risk. The indiction is tht when customer is less fmilir with technology, the customer sees this technology s higher sfety risk. The DebTech rting is tken s the more relible one becuse DebTech, s the mnufcturer, hs ccess to more extensive nd relible informtion to support its rting The perceived level of integrtbility of technology The perceived level of integrtbility reltes to questions on ccordnce of product with processes s illustrted in the conceptul model (Figure 1). The respective rtings of DebTech nd the customer of the integrtbility of x-ry nd lser technology re shown in Figure 5: Indictions re tht the more fmilir customer is with technology, the more the integrtion of tht technology into their workflow is seen s esy to ccomplish. Customers re more likely to pursue such technologies, decresing the resistnce to products with this technology. 163

13 Cnnot integrte Cnnot integrte Integrtbility Difficult to integrte Integrtbility Customer Rting Esy to integrte Customer Rting DebTech Rting Esy to integrte DebTech Rting Level of integrtbility of x-ry technology Level of integrtbility of lser technology Figure 5: Rting of integrtbility of technology by DebTech nd the customer 4.2 Fmilirity, recommendtion, nd product sles Tking the independent vrible of technology fmilirity nd the dependent vribles of continuous products sold, discontinuous products sold, nd level of recommendtion, the reltionships depicted in Figure 6 were deduced from the feedbck to the questionnire (nd confirmed in interviews nd observtion). Product sles dt ws extrcted from DebTech s dt rchives. From Figure 6 it cn be seen tht higher levels of technology fmilirity re ssocited with higher likelihood to recommend tht technology. Subsequently, with incresed recommendtion levels, more products (embodying tht technology) re sold s explined in prgrph Level of technology fmilirity Likelihood to recommend this product Product sles Continuous products Level of technology fmilirity Likelihood to recommend this product Product sles Discontinuous products Figure 6: Reltionship between fmilirity, likelihood of recommendtion, nd product sles 164

14 5. CONCLUSIONS ND RECOMMENDTIONS Even in the context of prticulrly close intr-compny reltionship between the industril product supplier nd customer (s with DebTech nd the De Beers mining opertions), reduced customer fmilirity with the technology on which the product ws bsed ws found to led to elevted customer perceptions of the newness of the technology nd reduced levels of sfety nd integrtbility in their opertions, when compred with the ssessments by the entity tht developed the product. Reduced customer fmilirity with the technology lso led to reduced likelihood of recommending the product, resulting in incresed customer resistnce to purchse the product bsed on discontinuous technology. Product development mngers in such contexts my be tempted to rely on intr-compny llegince, nd not to llocte dequte resources to technology trnsfer. Consistent with the frmework of the conceptul model, following technology trnsfer process is crucil to ddressing the disprities tht exist between the cpbilities of the recipient nd the expecttions of the technology provider. Where the mrket is limited nd homogenous, the developer would do well to design the solution to integrte fully with the customer work environment, incorporting solutions tht would normlly be beyond the scope of the product. Where possible nd pproprite, the msking of detiled complexity of technology will prevent the customer from being overwhelmed by it, s indicted by the input obtined from the DebTech engineering deprtment nd supported by recent findings in [19] nd [11]. Providing n esy-to-use interfce cn lso ssist with this. The literture on discontinuous technology product doption in the intr-compny context ppers to be sprse. The bove cse-bsed findings re presented s potentil resource to ssist further reserch in this context. dditionl reserch, preferbly empiricl in nture, is recommended to ddress the limited literture on the intr-compny doption of discontinuous technology bsed products. REFERENCES [1] thide, G.. & Klink, R.R Mnging seller-buyer reltionships during new product development. Journl of Product Innovtion Mngement, 26, pp [2] Bin & Compny The globl dimond industry - Lifting the veil of mystery. Bin & Compny, Inc. nd ntwerp World Dimond Centre privte foundtion (WDC). ccessed vi www [3] Cvness, C Progrmming Jkrt Struts, 2 nd edition. O Reilly. [4] Colrelli O Connor, G. & McDermot, C.M The humn side of rdicl innovtion. Journl of Engineering nd Technology Mngement, 21, pp [5] Cooper, R.G The dimensions of industril new product success nd filure. Journl of Mrketing, 43 (Summer 1979), pp [6] Dnneels, E. & Kleinschmidt, E.J Product innovtiveness from the firm s perspective: Its dimensions nd their reltionship with project selection nd performnce. The Journl of Product Innovtion Mngement, 18 (2001), pp [7] Figuero, E. & Concieco, P Rethinking the innovtion process in lrge orgniztions: cse study of 3M. Journl of Engineering nd Technology Mngement, 17, pp [8] Flyvbjerg, B Five misunderstndings bout cse-study reserch. Qulittive Inquiry, 12(2), pp [9] Fruendorf, J. & Kleinltenkmp, M Customer processes in business to business service trnsctions. Springer. [10] Hussey, J. & Hussey, R Business reserch: prcticl guide for undergrdute nd postgrdute students. Plgrve Mcmilln. [11] Koh, Y. & Miki, T Technology innovtions nd customers knowledge ccumultions: nlysis in cse study of Fujifilm computed rdiogrphy, Proceedings of PICMET 11, pp [12] Korhonen, H.M.E. & Krel, I Corporte customer resistnce to industril service innovtions. Interntionl Journl of Innovtion Mngement, 15, pp

15 [13] Lehtimäki, T., Simul, H. & Slo, J pplying knowledge mngement to project mrketing in demnding technology trnsfer project: Convincing the industril customer over the knowledge gp. Industril Mrketing Mngement, 38, pp [14] Loch, C.H. & Tpper, U..S Implementing strtegy-driven performnce mesurement system for n pplied reserch group. The Journl of Product Innovtion Mngement, 19, pp [15] Prk, C.W. & Lessig, V.P Fmilirity nd its impct on consumer decision bises nd heuristics. The Journl of Consumer Reserch, 8 (2), pp [16] Robertson, T.S The process of innovtion nd the diffusion of innovtion. Journl of Mrketing, 31, pp [17] Rogers, E.M The diffusion of innovtions. 5 th edition. The Free Press, New York. [18] Tlke, K. & Hulting, E.J Mnging diffusion brriers when lunching new products. Journl of Product Innovtion Mngement, 27, pp [19] Tlke, K. & Colrelli O Connor, G Conveying effective messge content when lunching new industril products. Journl of Product Innovtion Mngement, 28, pp [20] Tolfree, D. & Jckson, M.J Commercilizing micro-nnotechnology products. CRC Press: Boc Rton. [21] Veryzer, R.W., Jr Key fctors ffecting customer evlution of discontinuous new products. The Journl of Product Innovtion Mngement, 15, pp [22] Von Hippel, E The sources of innovtion. Oxford University Press, New York. [23] Yin, R.K Cse study reserch: Design nd methods. 3 rd edition. Sge Publictions. 166

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