The Effect of the Degree of Newness of a Areally New@ Product on Consumers’ Judgments

Citation:

Paschalina (Lilia) Ziamou (1999) ,"The Effect of the Degree of Newness of a Areally New@ Product on Consumers’ Judgments", in NA - Advances in Consumer Research Volume 26, eds. Eric J. Arnould and Linda M. Scott, Provo, UT : Association for Consumer Research, Pages: 368-371.

Advances in Consumer Research Volume 26, 1999      Pages 368-371

THE EFFECT OF THE DEGREE OF NEWNESS OF A "REALLY NEW" PRODUCT ON CONSUMERS’ JUDGMENTS

Paschalina (Lilia) Ziamou, Rutgers University

In the last decade, rapid and radical technological developments in computer and telecommunications industries spurred the emergence of radical technological innovations. Although in most industries the introduction of highly innovative products is only occasional, in high-technology industries, the introduction of 'really new’ products is rather a routine (Moore 1991). Really new products present unique challenges for marketing managers (e.g., Leonard-Barton 1994) and researchers have highlighted the importance of understanding how consumers respond to highly innovative products (e.g., Lehmann 1994; Urban, Weinberg, and Hauser 1996). Despite the importance of this topic, there is a lack of systematic investigation of how consumers respond to really new products. This may be attributed to the fact that both theoretical and empirical work in consumer behavior has mainly involved product categories that are "technology neutral". Such product categories have essentially remained unchanged for many years with respect to their underlying technologies (Glazer 1995).

The purpose of this paper is two-fold. First, we propose a theoretical framework to classify technological inovations based on their degree of newness, and identify highly innovative technology-based products. Second, we formulate research propositions to explain how consumers respond to technology-based really new products. The remainder of this paper is organized as follows: We first review the relevant literature. The theoretical framework and our theoretical propositions are presented next. The paper concludes with suggestions for future research.

THE CONCEPT OF INNOVATION IN CONSUMER RESEARCH

Previous research on diffusion of innovations highlighted the role of individuals’ perceptions in the definition of an innovation. The idea of relying on consumer perception for defining an innovation has its roots in the sociology literature. Rogers (1983) defines an innovation as "an idea perceived as new by the individual". Rogers and Shoemaker (1971) highlight that it matters little, so far as human behavior is concerned, whether or not an idea is "objectively" new as measured by the lapse of time since its first use or discovery. They point out, that "it is the perceived or subjective newness of the idea for the individual that determines his/her reaction to it. If the idea seems new to the individual, it is an innovation".

In the consumer diffusion literature, a theoretical framework for classifying innovations was proposed by Robertson (1971). Robertson suggests that "a continuum may be proposed for classifying new products by how continuous or discontinuous their effects are on established consumption patterns. He delineates three types of innovations: (1) continuous innovations, (2) dynamically continuous innovations, and (3) discontinuous innovations. A continuous innovation has the least disrupting influence on established consumption patterns (e.g., annual new model automobile changeovers). A dynamically continuous innovation has more disrupting effects than a continuous innovation (e.g., electric toothbrushes). A discontinuous innovation involves the establishment of new consumption patterns and the creation of previously unknown products (e.g., the first PC). Furthermore, Robertson distinguishes between two types of discontinuous innovations: innovations that perform a previously unfulfilled function or innovations that perform an existing function in a new way. Robertson points out that while this theoretical framework recognizes that not all innovations are of the same order of newness, it does not distinguish new products from products that are not new. He argues that "no definition of innovation can satisfactorily answer this question, unless we rely on consumer perception and accept majority consumer opinion of what is and what is not an innovation. Placing the burden for a new product definition upon the consumer is consistent with a marketing philosophy that looks to the satisfaction of consumer needs as the economic and social justification for the firm’s existence."

In the same vein, Gatignon and Robertson (1991) point out that although previous research emphasized the role of consumer perception in the definition of an innovation, it does not offer an explicit conceptual and operational definition of what constitutes an innovation. The authors highlight the need for a more rigorous conceptual framework for classifying innovations based on consumers’ perceptions. They propose that there would appear to be differences in information processing for products that differ in their degree of newness. Specifically, these differences will depend on how novel or innovative the product is according to consumers’ perceptions. High versus low novelty innovations are thus likely to be characterized by distinct decision processes and the development of a conceptual classification will enable researchers to examine the value of alternative marketing strategies in influencing the rate of diffusion. The argument proposed by Gatignon and Robertson is consistent with one of the major criticisms of innovation resarch which concerns the assumption that it is possible to develop a single universalistic theory of innovation, for all types of innovations (Dewar and Dutton 1986). Given fundamental differences that exist across innovation types, the search for a universalistic theory is likely to prove unproductive (Downs and Mohr 1976).

LITERATURE REVIEW

Previous research differentiates among innovations that differ in their degree of newness based on: (a) the newness as perceived by the producers in the industry and (b) the newness as perceived by the consumers.

Meyer and Roberts (1986), for example, suggest that measurable comparisons of present to past products may be performed along two basic dimensions. The first dimension is the newness of the technology within the new product relative to technologies already developed by the firm. Technology refers here to a unique set of skills or techniques that can be incorporated to one ore more products. The second dimension is the newness of the market application for which the new product is developed.

In another study, Gobeli and Brown (1987) identify four types of innovations that differ in their degree of newness based on both consumers’ and producers’ perceptions of newness. The first type of innovation, labeled incremental product innovation, incorporates little new technology and provides few new benefits to the consumer. Product line extensions generally fall in this category. The second type of innovation, labeled technical innovation, is new to the industry in terms of technology embodied into the new product, but is not perceived as providing many new benefits to the consumers. In the automobile industry, for example, the Cord of the 1930s incorporated a new front-wheel drive technology that was not perceived as a new benefit from consumers. In such innovations, although product improvement is present, the consumer does not perceive any real new benefits. Innovations that require changes in the manufacturing process also fall in this category (see also Wheelwright and Clark, 1992). The third type of innovation, labeled application innovation, does not utilize significantly new technologies, however, it is likely to require changes in consumer usage behavior and it is new to the relevant buyer. The Sony Walkman is an example of an application innovation. It introduced existing technologies to existing markets and created totally new listening opportunities. The fourth type of innovation, labeled radical innovation, incorporates radical technologies and requires significant changes in existing consumption patterns. Radical innovations include television, the personal computer, and the airplane when they were first introduced.

Kleinschmidt and Cooper (1991) differentiate among three types of innovations based on their degree of newness. The first type of innovation refers to new-to-the-world products, or in other words, products that are new to the firm and new to the consumer. The second type of innovation is new to the firm but not new to the target consumer. The third type of innovation refers to products that incorporate minor improvements or repositioning of existing products.

Firth and Narayanan (1996) delineate three dimensions to differentiate among new products that differ in their degree of newness. The first dimension is the newness of the technology embodied in the new product. This dimension addresses the degree to which the core technologies embodied in a new product are consistent with those used by the firm. The second dimension, the newness of the market application addresses the degree to which the market application is new to the firm. The third dimension refers to the degree to which the product is considered new in the marketplace itself.

Veryzer (1998a) suggests two dimensions to delineate the various levels or degrees of innovations. The first dimension is technological capability and refers to the degreeto which the innovation involves new technologies. The second dimension is product capability and refers to the benefits of the product as perceived by the consumer. Based on these two dimensions, he identifies four types of innovations. The first type of innovation, labeled continuous innovation, encompasses products that utilize existing technology and provide the same benefits as existing products. The second type of innovation, labeled commercially discontinuous, is perceived by consumers as being really new regardless of whether or not it incorporates a new technology (e.g., the SONY Walkman). The third type of innovation, labeled technologically discontinuous, incorporates highly advanced new technologies, it is however perceived as being essentially the same as previously existing products (e.g., the switch from vacuum tube televisions to televisions utilizing solid state technology had little impact on consumers in terms of product benefits or use). The fourth type of innovation, labeled technologically and commercially discontinuous, involves significant new technologies and is recognized as offering significantly enhanced benefits to the consumers (e.g., PCs when first introduced).

The review of the relevant literature reveals five dimensions that have been used by researchers to differentiate among innovations that differ in their degree of newness. These dimensions reflect the perceptions of the members of the organization involved in the development of a new product and consumers’ perceptions of the new product. Specifically, the degree of newness as perceived by the organizational members reflects:

i)  changes in the technology involved in the new product (i.e., the technology is new to the organization),

ii)  changes in the technology involved in the manufacturing process (i.e., the technology involved in the development of the product is new to the organization), and/or

iii)c  hanges in the market applications for which the new product is targeted (i.e., the target market is new to the organization).

The degree of newness as perceived by the consumers reflects:

i)  changes in product benefits that the new product offers to the consumer, and/or

ii)  changes in existing consumption patterns.

TYPOLOGY OF TECHNOLOGICAL INNOVATIONS BASED ON CONSUMERS’ PERCEPTIONS

Based on the review of the literature, we suggest that from the consumer’s perspective, innovations can be viewed as lying along two dimensions:

a)  the functionality of the innovation (i.e., what the product does)

b)  the consumer’s input (i.e., what he/she needs to do to obtain the expected functionality).

These two dimensions determine how novel the product is to the consumer. It should be noted, here, that the newness of the consumer’s input will be a function of the newness of the technology incorporated in the new product, since the technology embodied in a product determines how consumers will obtain the expected funtionality (see Veryzer 1998a, 1998b).

Figure 1 presents a typology of innovations based on consumers’ perceptions of newness.

Incremental innovations refer to late-entering brands, for example the first Sony PC or minor modifications of existing product lines. Functionality-driven innovations do not require a novel user input, they provide, however, a new functionality to the consumer. Cable TV and HDTV are examples of functionality-driven innovations. Technology-driven innovations necessitate a novel user input to provide an existing functionality that consumers are already familiar with. This functionality can alternatively be offered to consumers by existing product categories. A voice-activated phone is an example of a technology-driven innovation. A novel consumer input (i.e., voice-dialing) is required to obtain an existing functionality (i.e., phone call). Really new products necessitate a novel user input and provide a new functionality to the consumer. The first PC, the Internet, and smart cards encoded with personal information are all examples of really new products.

RESEARCH PROPOSITIONS

When consumers are confronted with a new product, they attempt to fit this new product into one of several known product categories (Ozanne, Brucks, and Grewal 1992; Ratneshwar and Shocker 1988). In the case of a technology-based really new product, however, both the user input and the innovation functionality are novel to the consumer and individuals do not have existing knowledge structures that can be invoked to make judgments about the innovation. Such innovations make established frames of reference obsolete and may require the induction of entirely new knowledge structures (cf. Gregan-Paxton and Roedder John 1997; Olshavsky and Spreng 1996). It is proposed that:

P1:  Really new products are more likely to create new product categories.

FIGURE 1

TYPOLOGY OF TECHNOLOGY-BASED INNOVATIONS

As a result of the novelty characterizing both the user input and the functionality of the product, really new products can be highly differentiated from existing product offerings. Such products are likely to offer a major relative advantage to the consumer (Gatignon and Xuereb 1997; Ziamou 1998). This leads to the following proposition:

P2:  Consumers will perceive a higher relative advantage for really new products.

Rogers (1983) summarized the results of a series of studies that demonstrated a positive relationship between the degree of relative advantage of an innovation and the rate of its adoption. In other words, the higher the relative advantage of an innovation, the higher its likelihood of adoption. This positive relationship between the degree of relative advantage of an innovation and individuals’ intention to adopt was also demonstrated by the findings of previous research on innovation characteristics (e.g., Eastlick 1996; Holak 1988; Ostlund 1974; Labay and Kinnear 1981).

Furthermore, research suggests that consumers’ existing knowledge and familiarity with existing products interferes with their ability to conceive new products and is likely to slow the adoption process (Fusco 1994). In the case of really new products established knowledge structures become obsolete and they are less likely to hinder the adoption process. It is proposed that:

P3:  Consumers will exhibit a higher intention to adopt a really new product.

Additional support to this proposition is provided by the example of the first pocket calculators and personal computers. When first introduced, they were eagerly purchased despite their high cost and limited capabilities (see Kyrish 1990).

CONCLUDING COMMENTS

Gatignon and Robertson (1991) highlighted the need for a more rigorous conceptual framework for classifying innovations based on consumers’ perceptions. This paper attempts to fill this gap. Consistent with previous research (e.g., Rogers 1983), our underlying assumption is that the degree of newness of an innovation is determined by individuals’ perception of newness. The contribution of this paper is two-fold: First, it offers a conceptual framework for classifying technological innovations and identifying technology-based really new products. Second, it presents research propositions to explain how consumers respond to technology-based really new products.

Our theoretical framework suggests directions for further research. One direction for future research could explore the specific underlying individual characteristics that are likely to influence consumers’ responses to technology-based innovations that differ in their degree of newness. Future research may investigate, for example, how risk aversion or innovativeness affect consumers’ responses. Future research could also investigate the communication strategies that are appropriate for each innovation type. For example, what is the effect of providing information on the consumer’s input? What is the effect of communicating information on the functionality of the product? Consumers’ responses to such communication strategies are likely to be influenced by the degree of newness of the technology-based innovation.

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