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Launching new products in international markets: waterfall versus sprinkler strategy of Korean SMEs

Hyo Eun Cho (Korea University Business School, Seoul, Republic of Korea)
Jong-Ho Lee (Korea University Business School, Seoul, Republic of Korea)
Insik Jeong (Korea University Business School, Seoul, Republic of Korea)

International Marketing Review

ISSN: 0265-1335

Article publication date: 20 December 2022

69

Abstract

Purpose

The purpose of this study is to investigate an understudied topic—new product strategy in international markets. Specifically, this study aims to address the crucial role played by organizational characteristics and market characteristics in determining a firm's decision of adopting either a waterfall or a sprinkler product strategy for international markets.

Design/methodology/approach

The empirical analysis was conducted using survey data collected from a sample of 171 Korean small and medium enterprises (SMEs). This study uses logistic regression analysis to test the relationships among organizational characteristics, market characteristics and a firm's international product strategy.

Findings

The empirical results suggest that firm characteristics, such as higher degree of internationalization, lead the firms to choose the sprinkler strategy. Moreover, this research finds that a firm's choice between the waterfall and the sprinkler strategy varies depending on market characteristics such as competitive intensity and market turbulence. The findings indicate that the sprinkler strategy is more optimal for use when firms operate under a high level of competitive intensity, whereas a waterfall strategy is more suitable for firms that encounter a high level of market turbulence in targeted foreign markets.

Originality/value

This research contributes to the international marketing literature by exploring the impact of organizational characteristics and market characteristics on a firm's new product strategy in international markets.

Keywords

Acknowledgements

This study is partially supported by Korea University Business School Research Grant.

Citation

Cho, H.E., Lee, J.-H. and Jeong, I. (2022), "Launching new products in international markets: waterfall versus sprinkler strategy of Korean SMEs", International Marketing Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IMR-05-2022-0106

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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