Consumer Response to Product Form in Technology‐Based Industries

Product design is a key driver of competitive advantage and new product success. Relative to its importance, product design remains an underresearched area. The authors address this issue by examining the moderating effects of consumer innovativeness and design acumen on consumer response to product form—i.e., the product's visual appearance. Using subjects from the United Kingdom, these effects were tested with a technology‐based product that is expected to be introduced to market in the near future. A technological innovation was chosen because such products are often characterized by an accelerating pace of innovation and shortening life cycles. In such contexts, the product's visual appearance is often critical to success because it drives inferences about the technical capabilities and functional novelty. Our findings indicate that for more innovative consumers, an innovative product form can further enhance perceived value, product liking, and purchase intention. Furthermore, for consumers who possess more design acumen, an innovative product form can increase perceived value and product liking. An innovative product form was not found to enhance purchase intention for consumers with higher levels of design acumen. A primary implication of the study is to consider target market characteristics such as consumer innovativeness and design acumen when selecting a product form strategy. Additional implications include involving consumer innovators in the development and evaluation of product forms and involving consumers with greater design acumen early in the product's introduction so that they may influence other buyers.     

Modeling the factors affecting rural consumers’ purchase of organic and free-range produce: A case study of consumers’ from the Island of Arran in Scotland,UK

This paper investigates the roles of personal, product related and economic factors in predicting rural consumers’ attitudes and purchase intentions towards organic and free-range produce. A conceptual model is derived and tested via structural equation modeling on a sample of 222 rural consumers. The results show that attitude is explained by consumers’ food safety concern, ethical lifestyle and price perceptions. Attitude partially mediates the effects of ethical lifestyle and price on intention to purchase organic produce as well as the effect of ethical lifestyle on intention to purchase free-range produce. Attitude assumes a more central role in fully mediating the effect of food safety concern on intention to purchase organic produce, as well as the effect of price on intention to purchase free-range produce. Overall the conceptual model of consumer decision making performs well in both organic and free-range contexts yielding similar results.     

The Role of Product Originality,Usefulness and Motivated Consumer Innovativeness in New Product Adoption Intentions

Prior research has posited that product attributes are primary drivers of success that a firm must consider to develop a competitive advantage. Two product attributes, originality and usefulness, have been identified in the literature as significant dimensions of new product success. Customer demands differ, and more purchase intentions toward a new product depend on how consumers connect the product attributes to their own individual characteristics. Studying motivated consumer innovativeness as a personality trait may improve our understanding of the motivations for adopting innovations; however, questions remain regarding whether the effects of originality and usefulness on consumers' intentions to adopt are different when levels of these attributes are matching or dissimilar and what the relationship is between these effects and motivated consumer innovativeness. This study seeks to empirically investigate these effects and their relations by collecting data from 560 potential consumers in China. This paper uses hierarchical regression analysis to test hypotheses in four product domains as representative of higher or lower levels of usefulness and originality. The research shows that new product originality affects consumers' intentions to adopt new products only if it matches the level of new product usefulness. The results also reveal that motivated consumer innovativeness has a positive moderating role on the relationship between new product originality and consumers' new product adoption intentions when both attributes are at a lower level. The theoretical and practical implications for new product development and marketing communications are discussed.     

Consumer Innovativeness and the Use of New versus Extended Brand Names for New Products*

Despite the importance of branding to new product success, little research has been conducted on how individual adoption orientation might affect brand name preferences. This paper draws on the diffusion literature to investigate how consumer innovativeness affects consumer response to alternative branding strategies (i.e., new vs. extended brands, for new products). The results of an empirical study found that consumer innovativeness has a greater effect on new product evaluations for new brand names relative to extended brand names. Also, results indicate that highly innovative consumers evaluate new products with new brand names more favorably than brand extensions. Furthermore, consumer confidence in the new product was found to mediate the effects of consumer innovativeness and its interaction with brand name type on new product evaluation. Implications include not only giving greater managerial consideration to using new brands but also supporting the chosen branding strategy with appropriate promotional efforts for respective adopter groups.     

The role of consumer purchase and post-purchase decision-making in sustainable seafood consumption. A Spanish case study using carbon footprinting

Sustainable consumption in the food sector is a desirable goal which is often difficult to achieve depending as it does on the interaction of a broad set of factors, such as market prices or consumer preferences. In the current study, a distinction has been made between pre-purchase consumer decision-making, on the one hand, and purchase and post-purchase consumer decision-making, on the other. Purchase and post-purchase decisions are those that affect their actions directly. These include vehicle selection to purchase the products, shelf-time in the household or the cooking method employed. The main goal of this study was to evaluate the environmental profile in terms of carbon footprint (CF), of a range of scenarios with varying direct environmental decisions performed by consumers. More specifically, the CF of an iconic frozen seafood product in Spain (one package of frozen fish sticks of Patagonian grenadier) was modeled for a total of 24 scenarios of fish sticks consumption. Results showed a high variance in environmental impacts depending on the scenario chosen, proving the high variability in CF that the consumption of frozen seafood can show depending on consumer choices or needs. Additionally, results showed the relative importance of the consumption stage within the entire supply chain in terms of GHG emissions. Hence, important reductions may be achieved in the diet of an individual merely by improving the behavioral traits when purchasing and consuming food products. Consequently, consumers, if given the correct environmental guidelines through awareness campaigns, can play an active and relevant role in the reduction of the environmental profile of seafood products through behavioral modifications when purchasing and consuming them.     

Being Innovative While Being Green: An Experimental Inquiry into How Consumers Respond to Eco‐Innovative Product Designs

Eco‐innovations are an effective way for companies to strategically align themselves with customers’ growing environmental concerns. Despite their crucial role, scant research has focused on eco‐innovative product designs. Drawing from the sustainability and innovation literature, this article proposes that in the design of an eco‐innovation, its degree of innovativeness, level of eco‐friendliness, and detachability significantly affect consumers' adoption intentions. This article develops various conceptual models tested through three independent online experiments with U.S. consumers. The findings support the hypotheses and provide useful insights into the underlying mechanisms of how and why consumers respond to eco‐innovative product designs across various high‐tech product categories. Specifically, the results show (1) a positive effect of innovativeness degrees of eco‐innovative attributes on consumers' perceptions of product eco‐friendliness and on their adoption intentions as well as a significant moderating role of consumers' need for cognition (Study 1); (2) a positive influence of eco‐friendliness levels of eco‐innovative attributes on consumer adoption intentions in the case of high‐complexity products but not for low‐complexity products, emphasizing the need to adopt different approaches when developing eco‐innovations to ensure favorable consumer reactions (Study 2); and (3) a significant impact of the detachability of eco‐innovative attributes on consumers' perceptions of trade‐offs between environmental benefits and product functionality and on their intentions to adopt eco‐innovations (Study 3). These findings add to existing theoretical knowledge, provide actionable managerial implications, and identify fruitful avenues for future research.     

The impact of firm introductory strategies on consumers' perceptions of future product introductions and purchase decisions

In this research, we develop and test a model of the consumer's decision to immediately purchase a technologically advanced product or to delay such a purchase until a future generation of the product is released. We propose that for technologically advancing products, consumers consider both performance lag (how far behind am I now) and expected performance gain (how far ahead will I be if I wait to buy a future expected release) in their purchase decisions. Furthermore, we hypothesize that a firm's past product introductory strategy can significantly influence consumer perceptions of performance lag, performance gain, and the rate at which a product is advancing technologically. We also propose that these perceptions of lag, gain and rate of technological change influence purchase action and ultimately determine whether or not a consumer will delay or immediately purchase a firm's current technological offering. We investigate the above relationships by introducing a model of consumer purchase behavior that incorporates the effects of a firm's frequency and pattern of next generation product introduction, and test the impact of different introductory strategies on performance lag, gain, rate of change perceptions, and purchase action. In our first study we test our model in a monopolistic setting and show that, holding all else fixed, infrequent product upgrades and/or increasing intergenerational release times result in consumers perceiving larger performance lags and gains. We also show that, holding all else fixed, consumers with larger performance lags and/or gains are less likely to delay their purchases of the currently best available product. In our second study we test our model in a competitive setting and show that, holding all else fixed, a firm's past pattern of new product introduction can influence consumers' perceptions of the firm's product's rate of technological change. We also find that consumers are more likely to purchase products which they perceive to have higher rates of technological change. The key insight from this research is that firms have a strategic tool at their disposal that has been overlooked—the pattern of introduction of next generation products. Our findings suggest that a change in the frequency and/or pattern of introduction, in and of themselves, can influence consumers' perceptions of future product introductions, and ultimately influence their purchase actions. Specifically, we demonstrate that by better understanding consumers' purchase timing decisions, firms may be able to induce purchase on the basis of introductory frequency and pattern alone. Additionally, we demonstrate that by strategically managing consumer expectations of future product introductions, firms may be able to decrease the purchase likelihoods of competing products. Implications of our research and its application to the pattern and timing of preannouncements for new products are also explored.     

Using Product Bundling to Facilitate the Adoption Process of Radical Innovations*

Generally, radical innovations are not easily adopted in the market. Potential adopters experience difficulties to comprehend and evaluate radical innovations due to their newness in terms of technology and benefits offered. Consequently, adoption intentions may remain low. This paper proposes bundling as an instrument to address these problems. More specifically, this paper examines how consumer comprehension, evaluation, and adoption intention of radical innovations may be enhanced by bundling such products with existing products. In addition, it is argued that the proposed effects are contingent upon the level of fit perceived to exist between the radical innovation and the product that accompanies it in the bundle. Furthermore, consumers' prior knowledge may affect the influence of bundling on the innovation adoption process as the interpretation of the meaning of new products may be strongly related to prior knowledge. This study therefore investigates whether consumer prior knowledge has such a moderating effect. Hypotheses are tested by means of an experimental study with three different radical innovations and distinguishing among offering the radical innovation separately, offering the radical innovation in a bundle with moderate perceived fit between the products, and offering the radical innovation in a bundle with high perceived fit between the products. Results show that product bundling enhances the new product's evaluation and adoption intention, although it does not increase comprehension of the radical innovation. Moreover, the results show that comprehension, evaluation and adoption intention of the innovation significantly decrease when consumers perceive a moderate fit between the products in a bundle. Taken together, these findings contribute to the bundling literature by showing not only that product bundling may indeed be an effective instrument to introduce a radical innovation but also that product bundling may be counterproductive when ignoring the critical role of perceived product fit as core characteristic of a product bundle. In addition, the notion that product bundling helps to enhance the evaluation and purchase intention of new and relatively complex products suggests a suitable strategy for new product managers to enhance benefits and reduce learning costs for radical innovations. Moreover, the effects of bundling on consumer appraisals of radical innovations are also shown to depend on the level of knowledge respondents possess regarding the product category of the radical innovation. More specifically, if bundled with a familiar product, novices tend to evaluate the innovative product more positively, but for experts no such effect can be detected. As such, these results provide additional specific implications for managers when introducing radical innovations in the market. Offering a radical innovation in a product bundle could be a fruitful strategy for companies that target customers with little or no prior knowledge in the product domain.     

The Effect of Concept Formulation on Concept Test Scores

While concept testing is a mainstay of the new product development process, there is little empirical evidence on the variation in consumer responses due to alternative concept formulations, particularly for those tests undertaken early in the product development process. The present study addressed this gap in the literature by using a split sample mail survey to compare stripped, embellished, and visual concept formulations for five heterogeneous product concepts. It was found that respondents' answers to attitude and purchase intention questions showed only minor variation with different formulations of the concept test statement. It also was found that the ranking of the concepts showed no substantial changes across the different formulations. Therefore, the type of concept statement formulation may not be that important, at least for early ranking tasks performed before experiential prototypes are available. Early concept tests therefore may be carried out using stripped concept statements. This may reduce costs, allowing organizations to undertake early concept testing more frequently across a wider range of products.     

“Honey,Have You Seen Our Hamster?” Consumer Evaluations of Autonomous Domestic Products

Several autonomous products have been launched in the marketplace in the past few years. These autonomous products do not need any human intervention but operate on their own. An example of such an autonomous product is the self-initiating, independent vacuum cleaner that determines when a floor or room needs to be vacuumed, and does the job by itself, returning to the charging station when it needs to recharge its battery. It is unclear, however, to what extent consumers appreciate this autonomy. Autonomous products take over tasks from the user, which leaves the user the opportunity to take part in other activities. However, consumers may also consider these products complex and the use and purchase of such products risky. In addition, people often show a desire for control and may be reluctant to hand over some control to autonomous products. The advantages of autonomous products may thus be partly compensated by several disadvantages.
The present study aims to explain overall consumer appreciation for autonomous products by integrating the above-mentioned factors in a conceptual model. This conceptual framework was tested in an experiment (N=77). The results reveal that consumers perceive highly autonomous products as more risky and complex than less autonomous products. Perceived risk negatively influenced overall consumer appreciation whereas complexity did not affect consumers' appreciation. Relative advantage, however, compensates the negative effect of perceived risk on overall consumer appreciation. Also, contrary to our expectations, we found that people with a high desire for control perceive less risk. We conclude with managerial implications for developers and marketers of autonomous domestic products.     

A Manager's Perspective on Virtual Customer Integration for New Product Development

Despite the high potential of virtual customer integration (VCI) methods for new product development (NPD) mentioned in the literature, practical use is still limited. This paper aims to provide a deeper understanding of managers’ perspectives on VCI and their intentions to use these methods for NPD. The theory of planned behavior (TPB) served as basis for developing a research model, which considers managers’ cognition, attitude, subjective norms, and perceived behavioral control as important factors affecting their intention to apply VCI. Because more recent literature has expressed doubts about the explanatory potential of the rather simple TPB model, a more complex alternative model was proposed for comparison. The alternative model included the market orientation of the company, the hierarchical position of the innovation manager as well as the manager's level of innovativeness as additional explanatory variables. An empirical online study was conducted in the field of consumer goods and services. Based on a sample of 216 German‐speaking innovation managers, the results show that the model derived from the TPB explains 68% of the variance in the managers’ intention to apply VCI compared with 69% of variance explained by the model containing additional explanatory variables. An extension of the model does not significantly improve its explanatory power. Managers show high interest in virtually integrating customers in NPD processes. Managers consider identification of future customer needs, a broader decision basis, increased efficiency in gathering and use of customer information, and increased customer retention as major advantages of VCI. Disadvantages considered by managers in making their overall judgment are the lack of secrecy and only incremental innovations. The perceived potential contribution of VCI to NPD, the assessment of its general acceptance within the company, and the perceived ability of innovation managers to successfully implement VCI mainly influence the adoption decision. Managers’ attitudes toward VCI have no significant influence on their intention to use VCI. The results suggest that strong promotion of VCI through senior management would enforce the positive effect of subjective norms on applying VCI. Measures such as including VCI on innovation managers’ personal scorecard, trainings offered, and cross‐functional meetings could help speed up VCI in NPD processes by increasing innovation managers’ perceived behavioral control toward VCI.     

Individual antecedents to consumer intention to switch to food waste bioplastic products: A configuration analysis

Food waste management remains a significant economic and sustainability problem and is being actively addressed by scholars, governments, and organizations around the world. Bioplastics, which are biodegradable plastics derived from food waste, are a recent innovation that might contribute to managing this waste in a more sustainable manner. Unfortunately, many of today's consumers are not necessarily ready to consider such alternatives. Consumer switching to sustainable products is a tenuous topic, as consumers often value other product attributes (i.e., cost, quality, and associated prestige) more than their sustainability attributes (i.e., fewer natural resources expended, lower carbon footprints, and end-of-life recoverability). A greater understanding of consumers' intention to switch to bioplastic products provides opportunities for firms to develop state-of-the-art, profitable, and sustainable food systems. Considering the complex set of inter-relationships surrounding consumer involvement in sustainable innovations and associated supply chain strategy, this research leverages complexity theory and a qualitative comparative analysis research approach to uncover eight different, yet equifinal, configurations of antecedents that motivate consumer intention to switch from new plastic products to equivalent products made from bioplastics.     

The Influence of Temporal Distance on Consumer Preferences for Technology‐Based Innovations*

Rapid technological developments in the computer and the telecommunications industries have spurred the introduction of technology‐based products. An important feature of these products is that they can be characterized based on improvements in the functionality and the interface. When consumers evaluate a technology‐based product, they face a trade‐off: How should they choose between a product that offers a superior functionality and another product that offers a superior interface? The present research focuses on how temporal distance (i.e., time) from the purchase or use occasion of a technology‐based innovation influences consumers' evaluations of the new product. Specifically, the present study examines how temporal distance affects the trade‐offs consumers make between improvements in the interface and improvements in the functionality of a new product. This research demonstrates that the weight consumers place on the functionality and the interface of a new product is a function of the temporal distance. Specifically, the functionality of the product is valued more in distant future events. In contrast, the interface of the product is more important in the near future. This research has direct implications for various aspects of the new product development process such as customer‐product research methods used, communication strategies, and product preannouncements.     

Incorporating Network Externalities into the Technology Acceptance Model*

Research on network externalities has identified a number of product categories in which the market performance of an innovation (e.g., unit sales and revenues) is an increasing function of that innovation's installed base and the availability of complementary products. Innovation scholars have attributed these findings to the positive impact of network externality variables on consumer perceptions of innovation attributes. This paper provides the first empirical examination of these perceptual linkages by extending the Technology Acceptance Model to include consumer perceptions of network externality variables. The authors hypothesize that, when direct and indirect network externalities exist, consumer purchase intentions and consumer perceptions of an innovation's usefulness and ease of use will positively reflect perceptions of installed base size and the availability of complementary products. To test this reasoning, the authors developed new measures of consumer perceptions of network externality variables. These measures were incorporated into a survey that explored the attitudes in Japan of potential adopters toward digital music (DM) players at an early stage in the product life cycle. Findings reveal a direct positive relationship between ease of use and the perceived availability of digital music. The authors also find positive and significant relationships between both purchase intention and perceived usefulness and (1) the perceived size of the DM player installed base and (2) the perceived availability of digital music. An application of the Baron‐Kenny test for mediating variables reveals that (1) ease of use partially mediates the relationship between the perceived availability of digital music and perceived usefulness and (2) perceived usefulness partially mediates the relationship between the perceived availability of digital music and purchase intention. The research has important implications for future research on new product adoption and for the management of innovations that involve network externalities. The conceptual model provides a framework for testing alternative explanations of observed variations in the impact of network externalities within and across product categories. The empirical analysis provides guidance for managers who wish to manage the impact of network externalities on adoption. In addition to stimulating the size of the installed base and the variety of complementary products, executives must also manage consumer awareness of network externality variables and consumer understanding of the relationship between those variables and innovation attributes. Finally, traditional adoption models link consumer adoption decisions to perceptions of innovation attributes. The findings provided here imply that predictive accuracy of these models can be improved by including consumer perceptions of network externality variables.     

Determinants of Innovative Durables Adoption

This research uses innovation characteristics to assess product potential at two points in time. The two phases of the study consist of: (1) proposing and estimating purchase intention models and (2) reconciling predicted success with actual product performance. The investigation focuses on the impact of perceived product attributes, environmental variables, and consumer traits on the purchase intention of actual innovations within several technologically intensive product categories. Differences in model specification and parameter values are noted across product types. Results indicate consistency in the impact of product attributes across categories on an innovation's acceptability, but suggest differences in model specification with respect to environmental variables and consumer traits. The existence of a generic-to-specialized innovation continuum is a possible cause of the heterogeneity in results across products. An ex post analysis of the innovations indicates that, while success can be predicted quite accurately using perceived product attribute ratings, consumer and environmental variables should not be ignored for particular categories. The study has implications for the early screening of innovative durables, specifically with respect to forecasting model potential, determining product design and positioning, and developing promotional messages.     

Commercializing Technological Innovation: Learning from Failures in High‐Tech Markets*

Commercialization is known to be a critical stage of the technological innovation process, mainly because of the high risks and costs that it entails. Despite this, many scholars consider it to be often the least well managed phase of the entire innovation process, and there is ample empirical evidence corroborating this belief. In high‐tech markets, the difficulties encountered by firms in commercializing technological innovation are exacerbated by the volatility, interconnectedness, and proliferation of new technologies that characterize such markets. This is clearly evinced by the abundance of new high‐tech products that fail on the market chiefly due to poor commercialization. Yet there is no clear understanding, in management theory and practice, of how commercialization decisions influence the market failure of new high‐tech products. Drawing on research in innovation management, diffusion of innovation, and marketing, this article shows how commercialization decisions can influence consumer acceptance of a new high‐tech product in two major ways: (i) by affecting the extent to which the players in the innovation's adoption network support the new product; (ii) by affecting the post‐purchase attitude early adopters develop toward the innovation, and hence the type of word‐of‐mouth (positive or negative) they disseminate among later adopters. Lack of support from the adoption network is found to be an especially critical cause of failure for systemic innovations, while a negative post‐purchase attitude of early adopters is a more significant determinant of market failure for radical innovations. There follows a historical analysis of eight innovations launched on consumer high‐tech markets (Apple Newton, IBM PC‐Junior, Tom Tom GO, Sony Walkman, 3DO Interactive Multiplayer, Sony MiniDisc, Palm Pilot, and Nintendo NES), which illustrates how commercialization decisions (i.e., timing, targeting and positioning, inter‐firm relationships, product configuration, distribution, advertising, and pricing) can determine lack of support from the innovation's adoption network and a negative post‐purchase attitude of early adopters. The results of this work provide useful insights for improving the commercialization decisions of product and marketing managers operating in high‐technology markets, helping them avoid errors that are precursors of market failure. It is also hoped the article will inform further research aimed at identifying, theoretically and empirically, other possible causes of poor customer acceptance in high‐tech markets.     

The Effects of Brand Strategy and Technological Uncertainty on Pioneering Advantage in the Multigenerational Product Market

This research investigates how brand strategy and technological uncertainty influence the order‐of‐entry effects for a previous generation pioneer in the successive generation. The findings of our longitudinal experiment reemphasize the importance of continuous pioneering, demonstrating that consumers exhibit a strong preference for a previous generation pioneer's product when it continues to pioneer the successive generation. More importantly, the findings indicate that continuous pioneering with a new brand leads to greater brand preferences when technological uncertainty is high. This is because in that condition, consumers perceive greater innovativeness with a new brand than with the extant one. On the other hand, an extant brand increases consumer brand preferences for a previous generation pioneer's product in the successive generation when technological uncertainty is low. The theoretical and practical implications of the results for understanding and managing pioneering advantage and brand strategy in the multigenerational product markets are discussed.     

What Makes a Family Firm Innovative? CEO Risk‐Taking Propensity and the Organizational Context of Family Firms

Investigating the new product portfolio innovativeness of family firms connects two important topics that have recently received considerable attention in innovation and family firm research. First, new product portfolio innovativeness has been identified as a critical determinant of firm performance. Second, research on family firms has focused on the questions of if and why family firms are more or less innovative than other organizational forms. Research investigating the innovativeness of family firms has often applied a risk‐oriented perspective by identifying socioemotional wealth (SEW) as the main reference that determines firm behavior. Thus, prior research has mainly focused on the organizational context to predict innovation‐related family firm behavior and neglected the impact of preferences and the behavior of the chief executive officer (CEO), which have both been shown to affect firm outcomes. Hence, this study aims to extend the previous research by introducing the CEO's disposition to organizational context variables to explain the new product portfolio innovativeness of small and medium‐sized family firms. Specifically, this study explores how the organizational context (i.e., ownership by top management team [TMT] family members and generation in charge of the family firm) of family firms interacts with CEO risk‐taking propensity to affect new product portfolio innovativeness. Using a sample of 114 German CEOs of small and medium‐sized family firms operating in manufacturing industries, the results show that CEO risk‐taking propensity has a positive effect on new product portfolio innovativeness. Moreover, the analyses show that the organizational context of family firms impacts the relationship between CEO risk‐taking propensity and new product portfolio innovativeness. Specifically, the relationship between CEO risk‐taking propensity and new product portfolio innovativeness is weaker if levels of ownership by TMT family members are high (high SEW). Additionally, the effect of CEO risk‐taking propensity on new product portfolio innovativeness is stronger in family firms at earlier generational stages (high SEW). This result suggests that if SEW is a strong reference, family firm‐specific characteristics can affect individual dispositions and, in turn, the behaviors of executives. Therefore, this study helps extend the knowledge on the determinants of new product portfolio innovativeness of family firms by considering an individual CEO preference and the organizational context variables of family firms simultaneously.     

Anti‐Competitive Interconnection: the effects of the elasticity of consumers' expectations and the shape of the network effects function

I find that interconnection might cause the market to be less competitive, and might lead to an increase in the price firms charge for their product. Absent interconnection, firms compete for a consumer for two reasons. The first reason is to obtain revenue from selling the product to a consumer (as in the case without network effects). The second reason is that by expanding the network by one more consumer, the product becomes more attractive to all other consumers. Interconnection eliminates the second reason—when firms interconnect, they are no longer concerned with consumers' following the crowd. I show that consumers and society might be worse off from interconnection. I focus on two factors that make the (post‐interconnection) price increase larger: consumer expectations that are highly sensitive to prices and consumers putting a high value on small increases in network size at the equilibrium market shares. Both of these factors make firms highly competitive, but only if the firms' products' networks are not interconnected.     

Product Choice and the Importance of Aesthetic Design Given the Emotion‐laden Trade‐off between Sustainability and Functional Performance

This paper investigates the trade‐off decision that consumers face when choosing between a product that is perceived to be more sustainable (i.e., more socially and environmentally responsible) and another product that instead is perceived to offer superior functional performance. Prior research has demonstrated that consumers often believe that there is a trade‐off between sustainability and performance, and in some cases, this trade‐off may be real and not just perceived. The objectives of the current research are to understand the mediators and moderators of this trade‐off choice and to illustrate one specific way in which to use this understanding to promote the consumption of relatively more sustainable products despite a perceived performance trade‐off. Two separate studies were conducted. The first employed a student‐based sample, whereas the second employed a nationally representative online sample. In both studies, participants were presented with a choice between two consumer products. One product was depicted as having superior sustainability characteristics (and average functional performance), and the other product was depicted as having superior functional performance (and average sustainability characteristics). Participants were asked to imagine that they were leaning toward choosing one product over the other, and then rated the degree to which they were feeling a set of possible emotions. Following these ratings, participants chose one of the products. The results suggest that consumers presented with such a trade‐off will tend to choose the product with superior functional performance over the product with superior sustainability characteristics, due to feelings of distress, until a minimum threshold of functional performance is achieved. The current research also shows that choice given this trade‐off depends upon the degree to which consumers value sustainability that, in turn, is mediated by consumers’ feelings of confidence and guilt. Further, based on an understanding of the emotions mediating choice in this context, the authors demonstrate how the effective use of product aesthetic design can improve the relative choice likelihood of sustainable products. Specifically, the authors demonstrate that superior aesthetic design has a disproportionately positive effect on the choice likelihood of sustainability‐advantaged (versus performance‐advantaged) products due to the effect that superior aesthetic design has on overcoming the potential lack of confidence in sustainable products. These findings highlight the specific value of aesthetic product design in the context of marketing sustainable products and suggest that it is especially important for firms interested in marketing sustainable products to also develop market‐leading product aesthetic design capabilities.