How consumers perceive, process and respond to innovativeness: an examination of consumer perceived brand innovativeness

Abstract

As a source of sustainable competitive advantage, a brand is the most important intangible asset of a firm (Keller, 2013). A brand not only serves as an encoding cue for brand-related information such as understanding of a new product’s characteristics (Keller, 1993), but also serves as a powerful heuristic cue for evaluations and choice decisions (Park & Lessing, 1981). Each year, corporations collectively spend billions of dollars to promote the perception that their brands are innovative and that they regularly introduce product innovations to the marketplace. While these companies obviously view the “innovativeness” image to be commercially beneficial for their brands and actively pursue higher levels of consumer perceived brand innovativeness, the literature provides little empirical evidence to evaluate the validity of such a viewpoint. Much of the innovation literature centres on the tangible impact that new product development programs may have on outcomes of product innovation (Henard & Dacin, 2010), leaving less tangible facets of innovation, such as brand innovativeness relatively unexplored. To address this research gap, a programmatic three-step multi-method investigation including eight successive studies was conducted. In the first phase, upon identification of the limitations of product and firm innovativeness conceptualisations with regard to brand innovativeness, the Consumer Perceived Brand Innovativeness (CPBI) construct was conceptualised and operationalised through six studies, using six different samples of university students. Initially, three exploratory qualitative studies (Studies A1–A3) were conducted to generate an enriched understanding of what brand innovativeness means to consumers. Next, three quantitative scaling studies were conducted to develop and validate CPBI measurement (Studies B1–B3). In the second phase, based on the findings from exploratory and scaling studies, a theoretically well-grounded CPBI model was developed, examining CPBI in its nomological network of relationships. Qualitative findings from Study A2, the concept specialisation model (Cohen & Murphy, 1984; Hampton, 1987; Murphy, 1988), information integration theory (Anderson, 1971, 1981a) and the associative network memory model (Anderson, 1984; Anderson & Bower, 1973) were considered collectively to guide the development of hypotheses. In a laboratory study, an experimental design was adopted to test the model for hypothetical product innovations, using a consumer panel of Australian adults. Finally in phase 3, the generalisability and validity of the proposed CPBI scale and model was examined for real product innovations and American consumers in a field study. In sum, findings provide support for the proposed CPBI scale and model, repeatedly validated through the three phases of the program. Results indicated that in an exposure to a product innovation, consumers’ current perception of brand innovativeness (pre-CPBI) and consumers’ perception of the technological newness of the innovation (TN) shape consumers’ perception of product innovativeness (CPPI). The resulting CPPI along with pre-CPBI lead to formation of postCPBI. Finally, post-CPBI has both attitudinal and behavioural outcomes. This research contributes to existing branding and innovation literature by proposing and empirically validating a new construct. Theoretically, the thesis examines how consumers perceive, process and respond to CPBI by combining information processing and inference making perspectives. Managerial implications of this research extend to product and brand managers faced with the challenge of effectively leveraging huge new product investments and publicly fostering an innovative perception for their brands and assessing return on such investments.