When businesses evaluate the launch of new products, they traditionally consider four factors: product, price, place, and promotion. But perhaps companies should add a fifth "P”: people.
After all, the success of a new product often depends on the quality of the managers overseeing its rollout, say Harvard Business School assistant professors Tomomichi Amano and Jorge Tamayo.
We often have a blind spot when it comes to thinking about how much people matter in terms of what happens in stores.
“You spend so much effort developing innovations, but they only realize value if they actually reach consumers. A grocery store shelf is still one of the key places where that happens, which makes rollout critical,” Amano says. “From a marketing perspective, we’re so focused on systems, we often have a blind spot when it comes to thinking about how much people matter in terms of what happens in stores.”
As economic uncertainty continues to weigh on consumer spending, many companies are doing everything possible to avoid product rollout failures. The researchers hope their findings will encourage companies to focus on managerial quality to improve the success of product launches.
“We have a lot of information systems these days that work really well, and yet we still see that middle managers play an important role,” Tamayo says. “The worst thing you can do is be naïve about this.”
Amano and Tamayo cowrote the working paper, “New Product Diffusion Within Retailers: The Effect of Managerial Quality on Rollout,” which was released in February and updated in July.
When a strong manager arrives
To assess both individual store and product performance, Amano and Tamayo studied a large retailer in Colombia that operated more than 200 stores, tracking data on new product sales in 16 categories, including beer, chips, and yogurt, between 2017 and 2019. They found that store and product performance increased after high-quality managers arrived.
“There are a lot of factors that can determine the performance of a store, including location and weather,” Tamayo explains. “If, when a manager comes to a store, performance increases, that’s a good manager.”
Because retailers are often uncertain whether new products will be a hit with customers, a large chain usually won’t roll them out to all stores at once. Instead, it will sell the products in a small number of stores and slowly expand to others if items do well.
“The key variable behind whether the product will continue to the next store is performance,” says Tamayo. “If you have good managers, we asked, does that increase the likelihood that a product will go to the next store? The answer is yes.”
The impact of better managers
In fact, compared to stores with lower-quality managers, high-quality managers helped new products succeed in several ways. For example:
Within six months of a high-quality manager’s arrival, revenue per new product increased by nearly 20%.
Products allocated to high-quality managers reached 31% more stores within 11 months.
A new product allocated to higher-quality managers was nearly 11 percentage points more likely to survive and last longer on the market.
The difference high-quality managers can make is “massive,” says Amano. Better managers increase store performance by 4.8% during the first quarter they arrive and boost store revenue by 11% by the sixth quarter.
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New Product Diffusion Within Retailers: The Effect of Managerial Quality on Rollout
Amano, Tomomichi, and Jorge Tamayo. "New Product Diffusion Within Retailers: The Effect of Managerial Quality on Rollout." Harvard Business School Working Paper, No. 25-041, February 2025. (Revised July 2025.)
