Retailers’ new product acceptance decisions:

incorporating the buyer-supplier relationship

perspective
Jiun-Sheng Chris Lin
Department of International Business, National Taiwan University, Taipei, Taiwan, and
Yun-Chi Chang
Department of Business Administration, National Taiwan University of Science and Technology, Taipei, Taiwan

Abstract
Purpose – Given the increasing number of new products competing for limited shelf space, retailer acceptance of new products is crucial to both
retailers and suppliers. However, limited empirical research has investigated what drives retailers to accept or decline a new product offering. Extant
research on retailers’ new product acceptance focuses mainly on product and market factors. Despite the growing importance of buyer-supplier
relationships in new product marketing, few studies have addressed their influence on retailers’ acceptance of new products. This study aims to fill the
research gap by proposing a model of retailers’ new product acceptance that incorporates the buyer-supplier relationship perspective.
Design/methodology/approach – This study develops an integrated research framework assessing the determinants of retailers’ acceptance of new
products. Four constructs were derived from the literature on buyer-supplier relationship marketing and new products literature to investigate their
influence on the retailer’s decision to adopt a new product. The constructs include buyer-seller relationship factors (relationship intensity and channel
motivation) and non-relationship factors (product advantage and market competitiveness). Hypotheses were developed and tested with a sample of
retailers.
Findings – Owing to the lack of appropriate existing scales for the four constructs that influence retailers’ adoption of new products, this study
developed and validated multiple-item scales through psychometric scale development procedures. Hypotheses were then tested with ordinary least
squares regression analysis, and all factors were found to have a positive relationship with the retailer’s acceptance of new products. Results further
show that buyer-supplier relationship factors are stronger predictors of retailer new product adoption than traditional non-relationship factors.
Research limitations/implications – This research represents an attempt to incorporate the buyer-supplier relationship into the process of retailer
new product acceptance. Future research directions are discussed, with an emphasis on two-way viewpoints, multiple supplier choice, and product
sales performance after acceptance.
Practical implications – The willingness of a retailer to stock a new product does not depend solely on product and market factors. In an age of
intense competition and seemingly limitless product choices, suppliers must also consider the implications of the buyer-supplier relationship before
entering negotiations with retailers regarding the stocking of a new product.
Originality/value – This paper represents the first study to propose and empirically test a research model that incorporates the literature regarding
both buyer-supplier relationship marketing and new product literature. Suppliers can strengthen their competitive advantage by understanding and
enhancing their performance in these factors.

Keywords New products, Retailer acceptance, Buyer-supplier relationship, Channel motivation, Product advantage, Market competitiveness,
Retailers, Buyers, Suppliers

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
New product introductions are vital for the long-term success
of firms as many firms rely heavily on new products to
rejuvenate old product portfolios and develop customer
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
loyalty. However, increasing market uncertainty and rapid
technological development present challenges to new product
marketing (Calantone and Benedetto, 2007). Many
manufacturers sell new products to consumers through
retail channels, which makes their success depend on
retailer acceptance and support (Hultink et al., 1999;
Kaufman et al., 2006). The vast array of new products
across multiple categories compels the retailer to choose
which products to stock (Kaufman et al., 2006). While new
products create excitement for customers and benefits for the
retailer, including increased customer traffic, points of
differentiation, and signals that the retailer is supplying the

Journal of Business & Industrial Marketing

27/2 (2012) 89– 99 Received 8 October 2010
q Emerald Group Publishing Limited [ISSN 0885-8624] Revised 18 February 2011
[DOI 10.1108/08858621211196967] Accepted 24 February 2011

89
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
latest and best products (Kaufman, 2002), limited shelf space
and a high new product failure rate increase the risk for
retailers with a choice dilemma (Bloom et al., 2000; Kaufman
et al., 2006). Thus, the ability to discern which new products
to shelve is critical for the retailer’s market success (Hultink
et al., 1999). That success, in turn, feeds the success of the
supplier. Therefore, how and why the retailer chooses a new
product is a concern for both parties.
Both suppliers and retailers seek to optimize value and
achieve efficiency. Recognizing retailers’ control of market
access, suppliers have sought practical approaches to address
the issue of retailer acceptance of new products (Luo et al.,
2007). To create value for retailers, suppliers of consumer
products can gain an advantage by understanding the needs of
their retail partners (Hultink et al., 1999).
Researchers have investigated how retailers evaluate new
products through examinations of category and shelf
management (Dreze et al., 1994), assortment optimization
(Boatwright and Nunes, 2001), product attractiveness (Rao
and McLaughlin, 1989), interfirm relationships (Kaufman,
2002; Kaufman et al., 2006), and introductory slotting
allowances (Desiraju, 2001; Lariviere and Padmanabhan,
1997; White et al., 2000). However, limited empirical
research has examined the determinants of retailers’
adoption of new products. This lack of research is especially
apparent in the face of the vast literature available regarding
new product development and key success factors, a central
focus of new product research. Among the limited studies of
retailer acceptance of new products, most direct attention
mainly to product and market factors.
Although product and market factors are important for
retailer adoption, the emergence of buyer-supplier
relationships has grown more critical (Kaufman, 2002)
because new product marketing usually involves developing
long-term relationships with retailers (Cravens, 1995;
Kaufman, 2002). Despite the significance of buyer-supplier
marketing relationships (Morgan and Hunt, 1994), their
influence on retailer new product acceptance has not been
well studied. As relationship factors are market-based assets
with the potential to create long-term value to firms (Eggert
et al., 2009; Srivastava et al., 1998), this paper attempts to fill
this research gap by incorporating the buyer-supplier
relationship factors into the model to better understand the
retailer’s new product adoption.
The remainder of this paper is structured as follows. We
first review the theoretical background and concepts in the
literature related to relationship marketing and new product
introduction. Four key constructs are derived and then use to
investigate influences on retailers’ acceptance of new
products, including buyer-supplier relationship factors
(relationship intensity and channel motivation) and non-
relationship factors (product advantage and market
competitiveness). We next develop and test an empirical
model with a sample of retailers. We conclude this paper with
a discussion of the study’s results, implications, limitations,
and future research directions.
Conceptual background
The success of a new product often depends on retailers’
acceptance and support. However, retail shelf space is a scarce
resource and its effective deployment could determine the
success of a retailer (Kaufman, 2002). For this reason, the
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Volume 27 · Number 2 · 2012 · 89 –99
retailer must be very cautious when selecting from the vast
number of products. Assessment of a new product often
depends on aspects other than mere product features and
market factors (Kaufman et al., 2006). Prior research,
however, has primarily considered product and market
factors, falling short of capturing the value of the buyer-
supplier relationships in channel activities. Institutional
theory and relationship marketing literature both suggest
that retail buyers’ evaluation and acceptance of new products
are embedded in relationships, yet the influence of
relationship factors has not been well studied by marketing
researchers. Therefore, we next review relevant relationship
marketing and new product literature to derive four major
buyer-supplier relationship and non-relationship factors that
affect retailers’ new product adoption, from which we develop
our hypotheses.
Buyer-supplier relationship perspective
Relationship intensity
Research suggested that retail buyers’ evaluation and
acceptance of a new product can be embedded in
relationships (Granovetter, 1985; Hultink et al., 1999;
Kaufman et al., 2006; Rao and McLaughlin, 1989).
Because the risk associated with offering new products is
relevant to both the supplier and the retailer, it is likely that
both would be motivated to create closer relationships. Many
firms have responded to these challenges by forming
collaborative relationships with their retail customers
(Agnihotri et al., 2009; Kaufman, 2002). These
relationships, which often enhance opportunities for
transactions to provide both the suppliers and retailers with
the potential to create value by enabling new product
transactions (Srivastava et al., 1998), encompass trust,
commitment, dependence, and effective communication.
Trust has been identified as a critical factor in supplier-
buyer relationships (Dayan, 2010; Morgan and Hunt, 1994;
Sheu et al., 2006; Song and Zhao, 2004). It is present when a
party has confidence in an exchange partner’s reliability and
integrity (Heikkila, 2002; Kaufman et al., 2006). By
developing trust, suppliers and retailers are more likely to
coordinate their efforts in new product sales (Song and Zhao,
2004), thereby reducing perceived risk (Kaufman et al., 2006)
and taking advantage of their complementary skills to
decrease transaction costs (Kumar, 1996). Further, a
retailer’s trust in a supplier influences the retailer’s adoption
of new products (Kaufman, 2002; Kaufman et al., 2006).
Commitment refers to the extent to which an exchange
partner considers a relationship important and thus is willing
to develop and sustain the relationship (Anderson and Weitz,
1992; Mohr and Spekman, 1994; Wetzels et al., 1998). It is
considered a critical component for inter-firm cooperation
that underscores the quality of the supplier-retailer
relationship (Kaufman et al., 2006; Rodrı́guez et al., 2007)
and the willingness of the two parties to cooperate in
weathering unanticipated problems (Mohr and Spekman,
1994). The willingness of the retailer to assist in marketing
channel tasks increases with the level of commitment to the
upstream channel member (Mohr and Spekman, 1994; Song
and Zhao, 2004), and therefore enhances the retailer’s
acceptance of a new product (Kaufman et al., 2006).
Dependence refers to the extent to which a firm needs
another firm to achieve its goals (Andaleeb, 1995). A firm
with greater dependence on its partner has more incentive to
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
sustain the relationship and thus will be more amenable to the
partner’s demands and requests (Andaleeb, 1995; Ghosh
et al., 2004; Mohr et al., 1996). Therefore, retailers will be
more willing to accept new products from suppliers they will
need to rely on in the future.
Effective communication, the effective formal and informal
sharing of meaningful and timely information between firms
(Anderson and Narus, 1990; Biggemann and Buttle, 2009), is
essential for new product introductions (Kaufman et al., 2006).
With effective communication comes increased mutual
support, respect, and compliance between partners (Agnihotri
et al., 2009; Mohr et al., 1996) as well as goal adjustment, task
coordination, and inter-firm learning (Sivadas and Dwyer,
2000). Such communication helps determine the degree to
which the supplier and retailer understand each other’s goals
and the level of coordination to achieve new product sales goals.
In summary, as Kaufman et al. (2006) suggested,
relationship intensity (with a supplier) will enhance the
likelihood of a retail buyer’s acceptance of new products.
Therefore, we propose:
H1. Relationship intensity is positively associated with the
retailer’s acceptance of a new product.
Channel motivation
Of the many mechanisms available, suppliersapos; channel
incentives are generally the most likely to motivate specific
retailer action (Gilliland, 2004). Channel motivation refers to
the supplier’s actions and policies to foster channel member
support in implementing the supplier’s distribution objectives
(Gilliland, 2003; Rosenbloom, 2003). It has inherent
governance properties that support the supplier’s ability to
control retailers in ways that support new product marketing
objectives (Haines, 2007; White et al., 2000).
Channel motivation usually includes three facets:
1 Financial support. Suppliers offer monetary rewards or
compensation, such as trade discounts or cash rebates, as
inducements (Ghosh et al., 2004) to influence the
retailer’s effort to sell new products (Desai, 2000). Such
incentives encourage retailers to buy in quantity while
retaining distribution through the retailers (Haines,
2007).
2 Promotional support. Promotional support emphasizes the
push approach initiated by the supplier, but requires retailer
support and follow-through to accelerate the diffusion
process and speed up the adoption rate of new products
(Debruyne et al., 2002). Promotional support often comes
in the form of cooperative advertising, promotional
allowances, slotting fees, display and sales aids, in-store
promotions, contests and incentives, and special deals and
merchandizing campaigns (Park, 2004; Rosenbloom,
2003). Such support can hasten the retailer’s rate of new
product adoption (Verbeke et al., 2006).
3 Managerial support. Managerial support comprises
assistance from the supplier to associated retailers, such
as a dealer hot line or sales and service training. These
activities facilitate the retailer’s tasks by providing
assistance with problems associated with carrying,
selling, and servicing the new products, leading to
lowered retailer cost and risk (Gilliland, 2003).
Suppliers often furnish such assistance to stimulate
retailers’ interest in their new products (Frazier and
Lassar, 1996).
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In summary, channel motivation can be crafted in such a way
that the retailer will comply with the supplier to receive
incentives (Gilliland, 2004). As Rosenbloom (2003)
suggested, suppliers’ channel motivation and support will
increase the retailers’ willingness to adopt new products. Thus
it is hypothesized:
H2. Channel motivation is positively associated with the
retailer’s acceptance of a new product.
Non-relationship perspective
Product advantage
Prior research has found that product advantage constitutes
an important determinant of new product success
(Calantone et al., 2006; Cooper and Kleinschmidt, 1987,
1993, 2000; Guiltinan, 1999; Langerak et al., 2004; Li and
Calantone, 1998; Montoya-Weiss and Calantone, 1994;
Nakata et al., 2006; Song and Parry, 1997). Channel
research further suggested that product advantage plays a
direct and vital role in a retailer’s acceptance of new products
(Kaufman, 2002; Kaufman et al., 2006; Rao and
McLaughlin, 1989). Past studies indicated that product
advantages include several distinct attributes, especially
uniqueness, the ability to meet market needs, variety, and
the manufacturer’s reputation.
Cooper (1979) and Cooper and Kleinschmidt (1987,
1993)suggested that the most important factor leading to the
success of a new product is uniqueness. Not only is a unique
trait highly visible and easy for customers recognize, but as
research has shown, product uniqueness is positively related
to a retailer’s acceptance of new products (Rao et al., 1995).
Retailers also make new product adoption decisions based on
expected profitability (Sternquist and Chen, 2006; Cooper
and Kleinschmidt, 2000; Rao and McLaughlin, 1989). An
estimated high gross margin will enhance retail buyer’s
acceptance of new products (Kaufman et al., 2006).
Whether a product can meet market needs (product-market
fit) is another attribute of product advantage that has been
found important to new product success (Carbonell and
Escudero, 2010; De Brentani, 1989; Henard and Szymanski,
2001; Parry and Song, 1994). A firm’s ability to understand
its customers and markets, and then develop products based
on that understanding, is positively related to new product
success (Ozer, 2006; Calantone et al., 1996; Montoya-Weiss
and Calantone, 1994). Addressing such market needs leads to
increased acceptance by consumers and retailers (Calantone
et al., 1995).
Research has also indicated that consumers like variety
(Lancaster, 1990). Variety is significantly related to store
patronage (Haines, 2007), suggesting that both customers
and retailers prefer to have a wide selection of products
(Berger et al., 2007). For certain product categories, a
decrease in assortment leads to decreased sales (Borle et al.,
2005). Consequently, retailers consider how new products
may enhance variety (Haines, 2007).
The manufacturer’s reputation (reflected in the strength of
the brand) has been shown to be indispensable (Cooper and
Kleinschmidt, 1993, 2000; Henard and Szymanski, 2001;
Song and Parry, 1997). Formed over time, reputation offers a
credible and diagnostic cue for assessing the product and
service performance (Kim and Cavusgil, 2009; Purohit and
Srivastava, 2001), as well-reputed firms often have a strong
incentive to fulfill their product or service promises
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
(Blombäck and Axelsson, 2007; Wiles, 2007). Consequently,
retailers use the manufacturer’s reputation as a heuristic cue
to assess new product acceptance decisions (Hultink et al.,
1999; Kaufman, 2002; White et al., 2000).
The discussion above suggests that retailers will tend to
accept new products with greater product advantages. We
thus hypothesize:
H3. Product advantage is positively associated with the
retailer’s acceptance of a new product.
Market competitiveness
The competitive market environment is a consideration in
attempts to understand why a retailer may decide to carry a
new product (Kaufman, 2002). Environmental
competitiveness includes potential competition in the
market, which research has typically ignored (Montoya-
Weiss and Calantone, 1994).
Competitive intensity, an important determinant of new
product success, refers to the degree to which a firm faces
competition in a market (Cui et al., 2005; Li and Calantone,
1998). Intensified competition increases market uncertainty
and unpredictability (Gupta et al., 1986) because customers
have many alternatives (Kohli and Jaworski, 1990). The level
of competitive intensity, therefore, affects the sales of new
products (Cui et al., 2005). The retailer is more likely to
choose to carry a product competitors might be carrying if the
product conforms to the retailer’s overall strategy (Kaufman,
2002).
Market competitiveness also includes the expected size and
growth of the market (Gatignon et al., 1990; Geyskens et al.,
2002; Henderson, 1978). Although a growing market for new
products often attracts more competitors (Gatignon et al.,
1990; Ghosh et al., 2004), growth also indicates the potential
for increased sales and profit potential (Ramaswamy et al.,
1994; Shankar, 1999), offering a greater probability of
obtaining shelf space for a new product (Kaufman, 2002).
Such market potential may reduce the perceived risk of
adding new products (Kaufman, 2002). Research also
indicates that larger and growing markets often yield a
higher acceptance and success rate for new products (Cooper
and Kleinschmidt, 1993; Rao and McLaughlin, 1989).
Finally, market dynamism, or the degree of change in the
market (Jap, 1999), is also an important concern for a
retailer’s new product selection. Market dynamism includes
both the speed of technological change and shifts in customer
needs and business practices (Cui et al., 2005; Dayan, 2010).
In highly dynamic markets, frequent changes in the market
require continuous modification of products or services for a
firm to remain competitive (Cui et al., 2005), increasing the
likelihood that retailers will accept new product (Hultink and
Atuahene-Gima, 2000).
Based on the discussion above, it is expected that market
competitiveness will enhance the likelihood that the retailer
will accept new products, leading to our hypothesis:
H4. Market competitiveness is positively associated with
the retailer’s acceptance of a new product.
Figure 1 presents the research framework delineating the four
determinant constructs that influence retailers’ acceptance of
new products.
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Figure 1 The conceptual framework
Research methodology
Qualitative study and scale development
To capture broad viewpoints of determinants of retailer
acceptance of new products, we first carried out pilot
interviews with academic and business experts as well as
managers of retailers and suppliers. These experts and
practitioners reviewed the conceptual framework and ensured
its accuracy. We then used multi-item scales to operationalize
each of the variables in our model. Owing to the lack of
appropriate existing scales for the four constructs that
influence the retailer’s adoption of new products, we
developed new measures following the procedures of
Churchill (1979) and Gerbing and Anderson (1988). When
available, existing concepts or items were utilized; otherwise,
potential items were developed following a deductive and
inductive approach (Hinkin, 1998), based on related
literature and insights drawn from our expert interviews. We
examined the constructs and related items discussed in the
literature review and used them as the basis for item
generation. Simultaneously, we carried out further
interviews with academic and business experts as well as
managers of retailers and suppliers to capture a wide variety of
viewpoints for the scale development, increasing the
probability of producing valid measures (Churchill, 1979;
Hinkin, 1998).
Next, to continue the deductive and inductive work, five
subject matter experts (SMEs) reviewed the items. Three of
the SMEs held doctoral degrees in areas related to marketing
channels and new product success, while the two other SMEs
were business colleagues familiar with the research topic.
Using an iterative process, we revised items on the basis of
feedback from the SMEs. We also carried out pretests with
ten retailers to improve and enrich the questionnaires. Similar
to Lin and Chen (2008), many respondents preferred a scale
of 0 to 10 over the common 1 to 7 response scale. Therefore,
a 0 to 10 Likert scale was used in this study.
Data collection
Following established data collection procedures of Davis and
Mentzer (2008), Mohr and Sohi (1995), and Mohr et al.
(1996), we tested the hypotheses with data collected from a
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
national sample of cellular phone retailers in Taiwan. We
chose the cellular phone retailing industry for two reasons:
1 this industry contains many small retailers (including
independent and chain stores); and
2 retailers sell a variety of branded new products from
multiple suppliers, providing the potential for variance in
the relevant constructs as well as the variables used in this
research (Davis and Mentzer, 2008).
The sampling frame was a national list of cellular phone
retailers published by Chunghwa Telecom Corporation, the
largest telecommunication service provider in Taiwan. To
include retailers outside the list, we obtained three additional
lists from leading distributors. Because we adopted a face-to-
face interview method, we used cluster sampling owing to
budget limitations. We first grouped retailers in northern
Taiwan from the combined list into 20 clusters according to
their geographic locations and then randomly selected five
clusters. We visited retailers from all the chosen clusters and
interviewed them in their stores.
We relied on storeowners or managers as key informants at
each retailer for new product acceptance assessment (Mohr
and Sohi, 1995; Mohr et al., 1996). Use of one key informant
in each store is appropriate for this study since such retailers
are typically small and the owner or manager is the decision
maker (John and Reve, 1982; Joshi, 2009; Mohr and Sohi,
1995). For cellular phone retailers in Taiwan, even in both
franchised and company-owned chain stores, the manager or
owner is often directly in contact with the supplier, possessing
sufficient knowledge to complete the survey instrument (Iyer,
2011; Chung et al., 2011). Therefore he/she is an appropriate
key informant for our study. Prior to store visits, we contacted
the owners or managers at each outlet by phone to identify the
key owner or manager and seek commitment to participate in
the interview. We then visited each store, where we
interviewed the informant in person and asked him or her
to respond to the questionnaire with respect to a randomly
assigned focal new product (Mohr and Sohi, 1995; Mohr
et al., 1996). This approach prevented respondents from
selecting either their most or least favored new product, thus
helping to assure the variance in the types of new products.
Of the total of 223 stores visited, 159 stores agreed to
conduct the face-to-face interview. A total of 151 surveys were
successfully completed, with a response rate of 67.7 percent.
Of the respondents, 52 percent were independent retailers,
while 48 percent were chain retailers (30 percent franchised
and 18 percent company-owned). Using one-way analysis of
variance (ANOVA), we found no statistically significant
differences between retailers of different channel types.
Results
Measure validation
Scale validation was assessed via exploratory factor analysis
(EFA), confirmatory factor analysis (CFA), and initial
assessment of scale reliability, as well as convergent and
discriminant validity analyses (Hinkin, 1998). We first
performed principal components factor analysis with
varimax rotation on the initial items, employing a factor
weight of 0.50 as the minimum cutoff value. We also dropped
any item exhibiting cross-loading. A total of four factors (with
22 items) were extracted with each eigenvalue exceeding 1.0,
matching the number of proposed constructs and explaining
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Volume 27 · Number 2 · 2012 · 89 –99
65.39 percent of the variance (see Table I). Reliability
assessment resulted in a Cronbach’s coefficient a exceeding
0.8 for each measure, satisfactory for exploratory research
(Nunnally and Bernstein, 1994).
A 22-item, four-dimension confirmatory factory analysis
(CFA), using LISREL 8.70 with maximum-likelihood
estimation (Jöreskog and Sörbom, 2001), was then
performed on the scales. The CFA results (NFI ¼ 0:94,
CFI ¼ 0:97, GFI ¼ 0:89, IFI ¼ 0:97, RFI ¼ 0:92,
RMSEA ¼ 0:066) demonstrated an adequate model fit. We
assessed convergent validity by reviewing the t-tests for the
factor loadings in the CFA (Anderson and Gerbing, 1988).
All items load on their respective constructs, and each loading
is large and significant at the 0.01 level, showing satisfactory
convergent validity (Anderson and Gerbing, 1988). To assess
discriminant validity, we used the chi-square test with one
degree of freedom while constraining each path to 1.0 versus
the same path unrestrained (Anderson and Gerbing, 1988)
The unconstrained model must fit significantly better than the
constrained model (Bagozzi et al., 1991). The pairwise chi-
square difference tests indicated that in each case, the chi-
square difference statistic is significant at the 0.01 level,
supporting discriminant validity. The above results
demonstrated that the measures employed in this study
possessed adequate construct validity.
Tests of hypotheses
Hypotheses were tested with ordinary least squares regression.
The retailer’s new product acceptance (NPA), measured by
shelf placement preference as well as the frequency and
magnitude of in-store displays (Kaufman et al., 2006) in a 0-
10 scale, was held as the dependent variable to reflect the
consequence and magnitude of the decision (0 if the new
product was not accepted). This measure reflects a retailer’s
willingness to accept and support a new product[1]. The four
major factors obtained from the scale development and
validation were set as independent variables: relationship
intensity (REL), channel motivation (MOT), product
advantage (PRO), and market competitiveness (MKT).
Retailer type (TYP) was used as a control variable, with 1
representing chain retailer (franchise or company-owned
store) and 0 for independent retailer. All hypotheses were
tested by estimating the regression equation:
NPA ¼ b0 þ b1 REL þ b2 MOT þ b3 PRO þ b4 MKT
þ b5 TYP:
Variance inflation factors (VIF) were examined for each
independent variable to determine the existence of
multicolinearity. The VIFs of independent variables ranged
between 1.0 and 2.0 in the regression, well below the
acceptable value of 10 suggested by Neter et al. (1989). This
indicated that multicolinearity was not a concern.
Regression results showed the model was a good fit for our
data set (see Table II). The coefficient for relationship
intensity was positive and significant (b1 ¼ 0:361, p , 0:01).
H1 was thus supported. Channel relationship intensity
positively influences retailers’ new product acceptance.
Channel motivation was also positively associated with
retailers’ adoption of new products (b2 ¼ 0:414, p , 0:01),
supporting H2. Higher levels of channel motivation increase
the likelihood of retailers’ acceptance of new products.
 Retailers’ new product acceptance decisions Journal of Business & Industrial Marketing
Jiun-Sheng Chris Lin and Yun-Chi Chang Volume 27 · Number 2 · 2012 · 89 –99

Table I Results of exploratory factor analysis and final scales

Dimensions Items EFA item loading Cronbach’s a
Relationship intensity 0.893
REL1 We will try our best to cooperate with the supplier 0.87
REL2 We want to maintain a long-term relationship with the supplier 0.84
REL3 We trust the supplier 0.66
REL4 The salesperson of the supplier is trustworthy 0.64
REL5 The supplier is concerned with our needs 0.54
REL6 We rely on the supplier’s resources 0.51
REL7 We communicate with the supplier in setting sales goal 0.61
REL8 We communicate with the supplier in coordinating sales activities 0.60
Channel motivation 0.866
MOT1 The supplier provides monetary rewards for new product selling 0.70
MOT2 The supplier provides promotional incentives for new product selling 0.81
MOT3 The supplier provides service training for new product selling 0.81
MOT4 The supplier provides support in problem solving for new product selling 0.81
Product advantage 0.847
PRO1 The new product is unique 0.78
PRO2 The new product can generate a good profit 0.71
PRO3 The new product fits market needs 0.70
PRO4 The manufacturer of the new product has a good reputation 0.58
PRO5 The new product enhances our product variety 0.56
Market competitiveness 0.861
MKT1 The speed of changes in technological development in this product category is high 0.78
MKT2 The speed of changes in customer needs in this product category is high 0.70
MKT3 The competition among retailers in the product market is intense 0.68
MKT4 The expected market size of this new product is large 0.68
MKT5 The expected market growth of this new product is high 0.74

Table II Regression analysis Kaufman’s (2002) notion that buyer-supplier relationships

have grown more important in retailer adoption. In addition,
Standardized the retailer type (chain or independent store) was found to
Predictor variables coefficient t-value Conclusion have no significant impact on new product adoption. This
Constant 49.724 * finding may indicate that no difference exists between retailers
Relationship intensity 0.361 9.559 * H1 supported of different types for the new product selection.
Channel motivation 0.414 10.965 * H2 supported
Product advantage 0.289 7.679 * H3 supported Discussion
Market competitiveness 0.255 6.762 * H4 supported Retailers’ multi-criteria decisions to adopt new products are
Retailer type 0.009 0.227 one of the most important issues in the marketing channel.
R2 0.450 We extend previous research to incorporate the role of buyer-
Adjusted R2 0.443 supplier relationships in retailers’ adoption of new products.
F value 63.769 * Results show that, in addition to non-relationship (product
Notes: Dependent variable: retailer’s new product acceptance; *p , 0:01 and market) factors, buyer-supplier relationship factors have
positive and significant effects on retailers’ acceptance of new
products. This finding indicates that when selecting new
products, retailers not only pay attention to product and
Moreover, the coefficient for relative advantage of a new market factors, emphasized by most previous research, but
product was positive (b3 ¼ 0:289, p , 0:01). H3 was thus also buyer-supplier relationship factors.
supported, indicating that the advantage of new products has Results provide evidence that buyer-supplier relationship
a positive effect on retailers’ acceptance of new products. factors (relationship intensity and channel motivation) are
Competitive environment factors were also found to be stronger predictors of a retailer’s new product adoption than
positively related to retailers’ acceptance of a new product non-relationship factors, echoing prior assertions of
(b4 ¼ 0:255, p , 0:01), supporting H4. This result implies Kaufman’s (2002) and Srivastava et al. (1998)that
that a more competitive environment should make retailers relationships serve as a market-based asset that enhances
more willing to accept new products. Overall, the transaction likelihood and create value. Suppliers’ incentive
standardized coefficients of buyer-supplier relationship programs and close relationships with retailers have more
factors (relationship intensity and channel motivation) were influence on the retailers’ decisions, and should be
larger than those of non-relationship factors, supporting emphasized. In terms of control variables, no significant

94
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
difference exists between independent and franchised chain
retailers in new product adoption, indicating that the four key
factors are relevant to retailers of both distinct types.
This study contributes to the buyer-supplier relationship
marketing and new product research streams by providing
evidence of how relationship factors, as well as non-
relationship factors, can affect retailer new product
acceptance. In light of these findings, suppliers seeking to
influence new product acceptance rates should focus on
buyer-supplier relationships in addition to product and
market factors.
Managerial implications
The findings of this research have important implications for
both manufacturers and suppliers. Retailers’ new product
adoption decisions are multi-criteria assessments of both
tangible and intangible factors, and are critical for new
product success. Retailers carefully consider their adoption
decisions and take into account various associated risks and
costs. The willingness of a retailer to stock a new product does
not depend solely on product and market factors, but also on
relationship factors. Therefore, in an age of intense
competition and seemingly limitless product choices,
suppliers must consider the implications of buyer-supplier
relationships before entering into negotiations regarding the
stocking of a new product.
Manufacturers and suppliers concerned with the strategic
value of new product marketing should recognize that
retailers’ acceptance of new products depends heavily on
relationships. Buyer-supplier relationship factors can enhance
opportunities for new product transactions to prosper, and
can provide both suppliers and retailers with the potential to
create value by augmenting new product sales. Therefore,
new product introductions should emphasize the intangibles
of channel relationship, including trust, commitment,
dependence, and communication in the relationship. When
pursuing leverage within the relationship, suppliers should
consider their position in the relationship with the retailer and
adopt strategies that can strengthen the relationship intensity.
Incentives are a vital part of most business interactions
(Gilliland, 2003), and channel motivation is generally one of
the most effective means of encouraging retailers to
collaborate (Gilliland, 2004). Retailers are more likely to
prefer suppliers that provide incentives and support programs
implementing new product distribution objectives. Suppliers
can influence retailers’ new product selling behaviors by tying
an incentive to participation in new product marketing.
Consequently, suppliers should provide retailers with not only
financial and promotional inducements, but also managerial
incentives, such as service training and support in problem
solving, to foster and boost retailers’ acceptance of new
products as an important support of new product marketing.
On the other hand, non-relationship product and market
factors are also important for retailers’ new product adoption.
Retailers often strive to maintain a wide variety of
differentiated products to increase store traffic or fulfill the
needs of specific customers (Haines, 2007; Verbeke et al.,
2006). Product choices depend on what qualities retailers
perceive as preferable in one product over another (Nakata
et al., 2006). Retailers are more likely to accept new products
that feature differential advantages and substantially superior
performance (Cooper and Kleinschmidt, 2000) than those
that lack these benefits (Kaufman, 2002). Focusing on new
95
Journal of Business & Industrial Marketing
Volume 27 · Number 2 · 2012 · 89 –99
product advantages perceived by retailers is a potent and
beneficial course for suppliers to enhance retailers’ new
product adoption.
As market competitors and environments evolve constantly
in various retailing industries, the level of market
competitiveness also influences retailers’ acceptance of a
new product. Turbulent environments often encourage the
need to make investments. When competition is intense,
retailers often incorporate new products in rapid succession to
differentiate themselves, and the unpredictability of market
conditions increases retailers’ willingness to accept new
products to avoid being left behind. When introducing new
products, suppliers can enhance retailer acceptance not only
by considering their own product- and market-level
competitive conditions, but also by taking into account the
retailer-level competitive environment.
Retailers evaluate new products and keep them as long as
consumers embrace them, and then abandon them on
consumer rejection. Suppliers should consider the support
retailers can provide to them in differentiating new product
offerings. Our results confirm that relationships serve as
market-based assets that enhance transaction likelihood and
create value (Srivastava et al., 1998). While recognizing the
importance of new product adoption by retailers, suppliers
should emphasize the growing importance of buyer-supplier
relationship factors in addition to traditional product and
market factors.
Limitations and future research
A few limitations and future directions of this research should
be noted. First, the retailer’s selection of a new product is a
dynamic process involving evaluation, communication, and
interaction between both suppliers and retailers. This study
contains a one-sided evaluation, collecting data from only one
party of the dyad relationship – the retailers. As prospective
suppliers will evaluate retailers for new product marketing as
well, future research should explore a two-way evaluation and
communication to better understand this issue. Second, the
sample of cellular phone retailers in Taiwan may limit the
variation of some dimensions and may reflect market
particularities of the specific sector. Results may not
generalize to all retailers across industries. Furthermore, the
country-related properties of the data could affect the
generalizability either due to consumers’ high comfort level
with technology or culture/country-specific elements such as
channel structures in Taiwan. Further cross-industry, cross-
national, and cross-cultural studies will enrich the model both
theoretically and empirically – increasing generalizability.
Third, retailers often choose multiple new products from
different suppliers. This research did not investigate factors
affecting adoption of new products from multiple suppliers.
Future research can take these factors into consideration.
Fourth, not every retailer is familiar with every new product
from every supplier or manufacturer in the highly competitive
cellular phone industry. To assure that informants were
familiar with the assigned new product, we listed only the new
products known by most retailers as key products when
designing the research. Future research can possibly
circumvent this issue by choosing a less competitive
industry with lower product churn.
In addition, as buyer-supplier relationship is an important
and complex issue in channel marketing, future research
should focus on developing a framework concentrating on the
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
influence of buyer-supplier relationship on retailer’s new
product acceptance. For example, future research can explore
how each component of relationship intensity and channel
motivation differentially affects new product acceptance. Such
research will also need to be followed by a careful refinement
of existing scales or development of new scales to accurately
measure these components within channel adoption of new
products. Moreover, this article attempts to capture the
relevant elements of retailers’ new product adoption decisions
using data collected from cellular phone retailers. The model
proposed in this study is a beginning for channel members’
new product acceptance research. Future research can
investigate and compare the determinants of new product
acceptance across various channel structures and retailer/
channel member types. Finally, in addition to the new
product acceptance decision, suppliers track both retailer
support and performance to ensure the effectiveness of new
product acceptance. Consequently, future research should
compare and link retailer new product acceptance with more
market-based measures, such as volume stocking and sales
performance. Such an approach will help address the
important question of whether strong acceptance enhances
marketing performance.
Note
1 Owing to most respondents’ unwillingness to reveal more
objective measures of new product acceptance in the
survey (e.g., actual volume/value of the stocking of the
new product), we used the alternative measure of new
product acceptance decisions suggested by Kaufman et al.
(2006).
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Corresponding author
Jiun-Sheng Chris Lin can be contacted at: jlin@
management.ntu.edu.tw
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the article. Those with a
particular interest in the topic covered may then read the article in
 Retailers’ new product acceptance decisions
Jiun-Sheng Chris Lin and Yun-Chi Chang
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
A retailer’s decision to stock a new product will,
unsurprisingly, be influenced by market and product factors,
such as product advantage and market competitiveness. But
not entirely – a hard-headed business approach based solely
on those factors might be a case of the head ruling the heart,
but sometimes it is the other way around – and in an age of
intense competition and seemingly limitless product choices,
suppliers must also consider the implications of the buyer-
seller relationship before entering negotiations with retailers
regarding the stocking of a new product.
Retailers evaluate new products and keep them as long as
consumers embrace them, and then abandon them upon
consumer rejection. Suppliers should consider the support
retailers can provide to them in differentiating new product
offerings. Incentives are a vital part of most business
interactions and channel motivation is generally one of the
most effective means of encouraging retailers to collaborate.
Retailers’ new product adoption decisions are multi-criteria
assessments of both tangible and intangible factors, and are
critical for new product success. Retail shelf space is a scarce
resource and its effective deployment could determine the
retailer’s success. Retailers’ multi-criteria decisions to adopt
new products are one of the most important issues in the
marketing channel. Consequently the retailer must be very
cautious when selecting from the vast number of products.
Manufacturers and suppliers concerned with the strategic
value of new product marketing should recognize that
retailers’ acceptance of new products depends heavily on
relationships.
In “Retailers’ new product acceptance decisions:
incorporating the buyer-supplier relationship perspective”
Jiun-Sheng Chris Lin and Yun-Chi Chang conclude that
buyer-seller relationship factors (relationship intensity and
channel motivation) are stronger predictors of a retailer’s new
product adoption than non-relationship factors, echoing prior
assertions that relationships serve as a market-based asset that
enhances transaction likelihood and creates value. They
provide evidence of how relationship factors, as well as non-
relationship factors, can affect retailer new product
acceptance and recommend that suppliers seeking to
influence new product acceptance rates should focus on
buyer-supplier relationships in addition to product and
market factors.
Suppliers’ incentive programs and close relationships with
retailers have more influence on the retailers’ decisions, and
should be emphasized. In terms of control variables, no
significant difference exists between independent and
franchised chain retailers in new product adoption,
indicating that the four key factors (relationship intensity
and channel motivation, product advantage and market
competitiveness). are relevant to retailers of both distinct
types.
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99
Journal of Business & Industrial Marketing
Volume 27 · Number 2 · 2012 · 89 –99
Buyer-supplier relationship factors can enhance
opportunities for new product transactions to prosper, and
can provide both suppliers and retailers with the potential to
create value by augmenting new product sales. Therefore,
new product introductions should emphasize the intangibles
of channel relationship, including trust, commitment,
dependence, and communication in the relationship. When
pursuing leverage within the relationship, suppliers should
consider their position in the relationship with the retailer and
adopt strategies that can strengthen the relationship intensity.
Retailers are more likely to prefer suppliers that provide
incentives and support programs implementing new product
distribution objectives. Suppliers can influence retailers’ new
product selling behaviors by tying an incentive to
participation in new product marketing. Consequently,
suppliers should provide retailers with not only financial and
promotional inducements but also managerial incentives,
such as service training and support in problem solving, to
foster and boost retailers’ acceptance of new products as an
important support of new product marketing.
On the other hand, non-relationship product and market
factors are also important for retailers’ new product adoption.
Retailers often strive to maintain a wide variety of
differentiated products to increase store traffic or fulfill the
needs of specific customers. Product choices depend on what
qualities retailers perceive as preferable in one product over
another. Retailers are more likely to accept new products that
feature differential advantages and substantially superior
performance than those that lack these benefits.
Focusing on new product advantages perceived by retailers
is a potent and beneficial course for suppliers to enhance
retailers’ new product adoption. As market competitors and
environments evolve constantly in various retailing industries,
the level of market competitiveness also influences retailers’
acceptance of a new product. Turbulent environments often
encourage the need to make investments. When competition
is intense, retailers often incorporate new products in rapid
succession to differentiate themselves, and the
unpredictability of market conditions increases retailers’
willingness to accept new products to avoid being left
behind. When introducing new products, suppliers can
enhance retailer acceptance not only by considering their
own product- and market-level competitive conditions, but
also by taking into account the retailer-level competitive
environment.
This paper’s results confirm that relationships serve as
market-based assets that enhance transaction likelihood and
create value. While recognizing the importance of new
product adoption by retailers, suppliers should emphasize the
growing importance of buyer-supplier relationship factors in
addition to traditional product and market factors.
(A précis of the article “Retailers’ new product acceptance
decisions: incorporating the buyer-supplier relationship
perspective”. Supplied by Marketing consultants for Emerald.)