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

Abstract

PurposeThe 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/approachThe 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.FindingsThe 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/valueThis 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.

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Successful introduction of products into global markets

“…In light of the above, Cho et al (2022) believe that high levels of internationalization increase the likelihood of the sprinkler strategy being adopted.…”

“…Additional research conducted by Cho et al (2022) explores the international product strategies adopted by Korean SMEs. A total of 171 firms with experience of introducing new products in overseas markets participated in the study.…”

“…But these factors suggest a uniform approach might not be the best option. Cho et al (2022) consider this further and propose that the resource-based view (RBV) and contingency theory are theoretical lenses which could present additional pointers.…”

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