Can All Brands Innovate in the Same Way? A Typology of Brand Position and Innovation Effort*

Product innovation is vital to ongoing brand equity and has been responsible for revitalizing many brands, including Apple, Dunlop Volley, Mini, and Gucci. While several scholars have noted the relationship between a brand's position and the form of innovation available to a firm, surprisingly no study has sought to bridge this gap. This study aims to address this issue by, first, building a typology of the innovation practices underpinning differently positioned brands and, second, exploring the strategic and tactical implications of different brand‐related innovation efforts. In so doing, this study addresses a critical question: How do differently positioned brands organize their innovation efforts? A multiple case‐study approach was used in this paper. Cases were sampled from a number of industries and across a range of different countries with a focus on business‐to‐consumer brands. Thirty‐five interviews were conducted across 12 cases. The brands studied differed in their approach to innovation (incremental vs. radical) and in their relationship to the marketplace (market‐driven and driving markets). These two dimensions result in four alternative ways of organizing the innovation effort to effectively reinforce the brand: (1) incremental and market driven (follower brands); (2) radical and market driven (category leader brands); (3) incremental and driving market (craft‐design‐driven brands); and (4) radical and driving markets (product leader brands). For follower brands, new product success is contingent upon the quality of the firm's marketing information systems and speed to market. Category leaders seek to dominate and appeal to the mass market with bold product initiatives. Craft‐designer‐driven brands aim to maintain an aura of authenticity, downplaying the commercial realities of their innovation efforts, while product leader brands seek to reaffirm their status as industry pioneers. This research contributes to the branding and new product development literature in several ways. It illustrates that differently positioned brands require the deployment of different firm capabilities and resources and a unique organizational philosophy to achieve new product success. The findings also enrich the brand extension literature through an examination of alternate bases, beyond that of product category, by which brand fit can be established. Finally, this research demonstrates how brand positioning can pose limitations on an industry leader's ability to respond to disruptive technologies. This study identifies that failed new products or brand extensions are driven by a mismatch between desired strategy and the capabilities necessary for achieving success (suggesting brand extensions are not as low risk as previously thought). As such, managers should carefully attend to brand perceptions when developing innovation strategies, particularly in relation to brand extensions.     

Brand‐Specific Design Effects: Form and Function

Product design is inherently a key component of brand strategy. Accordingly, significant resources are invested to improve product and brand performance; however, foundations for understanding the role product design plays in influencing actual consumer opinions from the marketplace have not been fully explored in the literature. This paper develops a conceptual framework illustrating how two critical design factors—form and function—impact consumer opinion and delineate brand‐specific effects. Nonmonotonic effects are identified, as well as the interaction effects of the individual factors among the dimensions. A longitudinal model based on objective measures of form and function is tested with a data set developed from models available in the U.S. automotive market from 1999–2007; it includes 16 firms, 32 brands, and 137 products. The results indicate the relationships between factors of form and function are multifarious and complex, but clearly play a significant role in forming consumer opinions, although they do exhibit diminishing returns. The findings further indicate brand‐specific effects exist, and consumer opinions vary by brand. The findings provide foundations for understanding the interplay between product development and brand management. Overall, this research supports the notion that brand strategies can be supported through the management of design dimensions.     

Global Integration of Brands and New Product Development at General Motors

The rapidly globalizing marketplace reflects environmental characteristics requiring the development of unique capabilities that enable the firm to create competitive advantages. Correspondingly, this study addresses challenges faced by managers in a large company with a broad global footprint as it integrates the product development process and the portfolio of brands across geographic markets. In a global organization, the unique dynamic capabilities that need to be developed include a global orientation, global market knowledge competencies, and global coordination. The present study considers these capabilities with respect to process, position, and evolutionary history of the firm and its brands. Qualitative research methodology is employed to explore the phenomenon of moving products and brands from multidomestic to global. The findings indicate the structure of a global brand portfolio evolves through complex interactions among new product development, marketing, and brand management. Overall, the organization's current positions and past history form the basis of the ways routines, practices, and means of learning are combined and coordinated to implement product decisions that support brand objectives.     

The Impact of Fit Measures on the Consumer Evaluation of New Co‐Branded Products*

A popular strategy currently employed for new product introductions is co‐branding. Such a strategy allows a brand to innovate with the support of a partner brand. The present study investigates how consumers perceive a new product with two brands. Previous research focused on the logic of a brand combination by investigating the impact of the fit between both existing product categories (i.e., product‐product fit) and the fit between both brand images (i.e., brand‐brand fit) on the evaluation of a new co‐branded product. However, no study has yet focused on the relationships between both brands and their existing product categories, and the specific new product that has been developed. The present paper aims to improve the understanding of the potential benefits of co‐branding by taking the role of the new product into account. The empirical study discussed in this paper replicates and extends the model of Simonin and Ruth (1998) by adding two new measures to their model. These measures are related to the fit of both existing product categories with the new product (i.e., new‐product‐product fit) and the fit of both brand images with the new product (i.e., new‐product‐brand fit). The results from this empirical study with 210 consumers in The Netherlands show that product‐product fit, brand‐brand fit, and new‐product‐brand fit have a significant positive impact on the evaluation of a new co‐branded product. New‐product‐product fit was not significantly related to consumer evaluations. In addition, the results show that consumers prefer a new co‐branded product that can be clearly associated with one of the brands in the partnership so that it can be categorized unambiguously. This paper discusses these findings and provides implications for research and managerial practice in the important and growing field of brand‐driven innovation.     

Embodied Cognition and New Product Design: Changing Product Form to Influence Brand Categorization*

This article explains how embodied cognition and perceptual symbol systems enable product designers to influence consumers by communicating key perceptual features through subtle changes in product design elements. In this way, managers can change perceptual design elements to support line extension strategies. More specifically, design changes can be used as a tool to help evolve consumer perceptions of a product's uses and brand category membership. The role of perceptual symbols in product design is illustrated by a well‐known off‐road motorbike brand that planned to extend into the street motorbike segment. In order to facilitate consumer acceptance of a street motorbike from this off‐road brand, the firm gradually introduced models containing an increasing number of elements of street motorbikes over a period of several years. The authors use this example to show how typical design elements of the target product category can be effectively integrated with design elements of the current product category by simply modifying key characteristics of product‐shape attributes. This process is further tested in an experiment, where motorbike models differing slightly in key product features (e.g., product shape) were rated on their resemblance to street or off‐road motorbikes. The results show a strong effect of these design changes on brand‐category membership. Managerial implications of this approach and future research directions are discussed.     

Organizational Learning and New Product Introductions

Organizational learning widely is believed to be important to competitive performance of companies. The purpose of this article is to examine how organizations learn from their experiences in new product introductions. Theory suggests that organizations will display a “competency trap” that reduces their ability to learn from organizational experience. Often initial success can cause a firm to rely on a single or a few experiences to develop routines, discounting later experiences. Therefore it is expected that organizations will have trouble learning from experience. The theory was tested by examining all new product introductions in the U.S. shampoo industry from 1974–1987. The dynamic nature of the business—the average brand survives about two years—made this an attractive research venue. Using the econometric technique of survival time modeling, a model was fitted of survival of brands as a function of organizational experience and organizational experience squared. The model also included controls for financial resources available to the firm and the level of first year's advertising. The model confirmed the general hypothesis that firms' brands are less successful the more experience they have. This study interprets this as evidence of a competency trap in new product introductions. The results broadly are supportive of the hypothesis that organizations find it harder to learn from experience as experience grows. Untangling the source of this problem is a goal of further research. For practice, the article suggests caution to brand managers in experienced companies. There is no guarantee that firms grow in their ability to build brands; results here suggest the opposite. Formal reviews of the new product, its process, and its performance by senior managers for lessons learned is desirable. Management of individuals and organizations may facilitate learning from experience. For managing individuals, often product success brings about a reassignment of successful personnel; care should be taken to insure that individuals' learning is captured by the new product organization before reassignment. On the organizational level, formal brand management may be a highly effective method for managing an ongoing stable of long‐lived brands but may be a poor choice in a dynamic market like shampoo. Companies may explore new organizational structures and departments to conceive and to develop new products since the skills required for managing ongoing brands may be different from creating new ones.     

The Contributions of Firm Innovativeness to Customer Value in Purchasing Behavior

The purpose of this research is to examine the influence of firm innovativeness and product innovativeness on the components of customer value mediated by instrumental and symbolic brand benefits. Over the last 10 years, the mobile phone industry in Korea has grown rapidly, with the introduction of several innovative phone features. The research context therefore is mobile phones with Internet access and their users in Korea. A major research finding is that the firm innovativeness affects product innovativeness, and hence, the instrumental brand benefits. A firm's innovativeness also has a significant effect on the symbolic brand benefits and the partnership value. Our key academic contribution is to expand the previous fragmentary studies of customer value, by classifying customer value into four components: expectation, partnership, transaction, and relationship customer values, rather than just focusing on benefits and sacrifices. Implications for managers include the verification that firm innovativeness is a source of ability for mobile phone firms to create value for customers. Instrumental and symbolic brand benefits through innovation should be the focus area for marketers and new product development (NPD) managers in mobile phone firms to communicate with consumers to increase expectation values in the prepurchase step.     

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.     

Designing Visual Recognition for the Brand*

The present paper examines how companies strategically employ design to create visual recognition of their brands' core values. To address this question, an explorative in‐depth case study was carried out concerning the strategic design efforts of two companies: Nokia (mobile phones) and Volvo (passenger cars). It was found that these two companies fostered design philosophies that lay out which approach to design and which design features are expressive of the core brand values. The communication of value through design was modeled as a process of semantic transformation. This process specifies how meaning is created by design in a three‐way relation among design features, brand values, and the interpretation by a potential customer. By analyzing the design effort of Nokia and Volvo with the help of this model, it is shown that control over the process of semantic transformation enabled managers in both companies to make strategic decisions over the type, strength, and generality of the relation between design features and brand values. Another result is that the embodiment of brand values in a design can be strategically organized around lead products. Such products serve as reference points for what the brand stands for and can be used as such during subsequent new product development (NPD) projects for other products in the brand portfolio. The design philosophy of Nokia was found to depart from that of Volvo. Nokia had a bigger product portfolio and served more market segments. It therefore had to apply its design features more flexibly over its product portfolio, and in many of its designs the relation between design features and brand values was more implicit. Six key drivers for the differences between the two companies were derived from the data. Two external drivers were identified that relate to the product category, and four internal drivers were found to stem from the companies' past and present brand management strategies. These drivers show that the design of visual recognition for the brand depends on the particular circumstances of the company and that it is tightly connected to strategic decision making on branding. These results are relevant for brand, product, and design managers, because they provide two good examples of companies that have organized their design efforts in such a way that they communicate the core values of their brands. Other companies can learn from these examples by considering why these two companies acted as they did and how their communication goals of product design were aligned to those of brand management.     

品牌文化认同对区域品牌产品购买意向影响研究

从消费者视角探讨产生区域品牌效应的品牌文化认同前因,并将文化认同细分为认知性文化认同、情感性文化认同与评价性文化认同,试图分别考察3种认同对购买意向的不同影响,以及3种认同是否存在相互影响的关系。实验选取4个区域品牌作为研究对象,进行预测试修正问卷后,通过对随机拦截的方式获得392份有效问卷,利用AMOS软件分析3种品牌文化认同产生的区域品牌效应及相互之间的影响。研究结果表明,品牌文化认同与消费者购买意向显著正相关,评价性文化认同的影响效果最强、认知性文化认同影响最弱;且认知性文化认同需要通过情感性文化认同和评价性文化认同来影响消费者购买意向,其与购买行为相关不显著。     

To invest, or not to invest, in brands? Drivers of brand relevance in B2B markets

When allocating resources to brand investments, managers should consider the relevance of brands to the purchase decision process. Past research on consumer markets shows that brand relevance generally is driven by three functions: image benefits as well as information cost and risk reductions. This study is the first to investigate these underlying mechanisms of brand relevance in a business-to-business setting. Our main contribution is that, in contrast with consumer markets, brand relevance in industrial markets depends primarily on risk and information cost-reducing effects. Therefore, business-to-business firms should invest in their brands using tactics that support the reduction of risk and information search costs for customer decision making. This article also demonstrates that brand relevance differs across product categories, such that depending on the specific category, investing in brands may or may not be a promising strategy.     

Innovating the innovation process: an organisational experiment in global pharma pursuing radical innovation

The challenge of managing the fuzzy front end of the innovation process is particularly acute for large, multi‐brand, research and development (R&D)‐intensive firms. Poor performance at generating radical innovations has resulted in many large organisations seeking to innovate how they organise for innovation. This paper presents an inductive, longitudinal study of an organisational experiment that sought to get ‘game‐changing, radical ideas’ into the new product development funnel of a top three pharma. The immediate outcomes of a team‐based internal innovation tournament included 33 new product ideas, 14 of which were radical. The medium term outcome of the experiment was a reorganisation of how the firm now pursues radical innovation activities. We link these outcomes to team leadership, contrasting innovation processes, including decisions about how to incorporate the ‘voice of the consumer’. The inductive, longitudinal study suggests causal interconnections between innovation team leadership, innovation team processes, and innovation outcomes.     

Modelling Price Dispersion as an Outcome of Competition in the Irish Grocery Market

The paper empirically models price dispersion between related brands within product categories of the Irish Independent Grocery market. Retail brand prices are averaged over the independent shops stocking the brand. Since individual brands are retailed through different groups of shops, brands are priced over heterogeneous consumer segments. Brand price dispersion is estimated to increase with competition when conditioned on brand distribution structures, while controlling for other observed and unobserved deterministic factors. The data suggest that brand pricing across consumer groups induce varying degrees of localised price competition rather than pricing across segments to extract consumer willingness to pay.     

In the Eye of the Beholder? The Effect of Product Appearance on Shareholder Value

In times of convergence with regard to product functionality and performance, the appearance of a product constitutes an important source of competitive advantage. Astonishingly, only a few studies have empirically examined the relationship between design‐related aspects and firm value. Moreover, existing studies predominantly use accounting‐based and/or subjective performance measures. Against this background, the present work assesses the contribution of the three most important product design dimensions (i.e., aesthetic, ergonomic, and symbolic value) to the creation of firm value in the context of the automotive and consumer electronics industry. To do so, we examine stock market reactions to the unveiling of a new product's appearance to the public using event study methodology. In particular, we combine perceptual data at the consumer level with stock market data to examine how target consumers' perceptions of the aforementioned design dimensions are related to abnormal returns following the unveiling of a new product. Results reveal that ergonomic value is positively related to abnormal returns, while aesthetic value only exerts a significant positive effect on abnormal returns if the product also exhibits a certain degree of functional product advantage. Finally, symbolic value exerts a negative influence on stock market reactions. These findings have important implications for the allocation of design‐related investments to aesthetic, ergonomic, and symbolic design features.     

中华老字号品牌资产增值——一个创新与怀旧契合的案例分析

当前多数老字号品牌发展停滞,品牌资产不断流失,维护与提升老字号品牌资产变得迫切而且必要。文章结合老字号品牌复兴的创新和怀旧理论,分析了王老吉品牌资产增值的策略选择和启示。通过个案研究发现,王老吉在传承品牌精髓和其他独特品牌元素的基础上,运用营销创新获得品牌经营的成功,这对其他老字号品牌复兴具有借鉴意义。     

Creating Brand Names That Work

When it comes to brands, what's in a name is everything—a product is not a brand until you name it. What you call your product makes a difference. In addition to making the product yours and no one else's, a good brand name can create a competitive edge by being memorable, by communicating the special qualities of the product, and by setting the stage for a line of future products. Lorna Opatow brings practical experience to this article in which she identifies the problems and the promises in choosing brand names, and then provides guidelines for creating, developing, and evaluating them prior to testing for market acceptance.     

Assessing Consequences of Component Sharing across Brands in the Vertical Product Line in the Automotive Market

Component sharing may look great in the boardroom but not in the showroom. Indeed, savings on research and development and production costs could be offset by a plunge in customer brand attractiveness. The central objective of this paper is to investigate consumer and market responses toward component sharing between brands. More specifically, by combining experimental with econometric studies, this paper investigates the impact of component sharing on customer evaluation of luxury, volume, and economy brands offered in a car manufacturer's vertical product line. An experimental study in which component sharing between automotive brands was made explicit aimed to understand the impact of brand combinations and type of sourcing on the evaluations of the two brands sharing components. This experimental study shows that the evaluation of luxury brands sharing with a volume brand suffers more than when a volume brand shares components with an economy brand. This experimental study was executed for two different brand combinations including one luxury, one volume, and one economy brand: (1) Audi, Volkswagen, and Skoda; and (2) Lexus, Toyota, and Suzuki. The evaluation of an economy brand benefits more from sharing with a volume brand than a volume brand suffers from sharing with an economy brand. The magnitude of these effects depends on several factors, such as component type, the source of the component sharing, and the salience of component sharing to the consumers. One important limitation of the experiment is that component sharing is made rather salient, and no behavioral effects of component sharing are studied. Therefore, a second was executed in which market share data on brands of the Volkwagen company (i.e., Audi, Volkswagen, Seat, and Skoda) were collected, while also data on the component‐sharing practices between these brands were gathered. A market share model was estimated in which market shares of the four studied brands were explained by component‐sharing practices and some control variables (i.e., price, model changes) in an exploratory fashion. The explorative examination of market share effects confirms that luxury brands may suffer, while economy brands may benefit from component sharing. In sum, this research suggests that component sharing between brands has negative effects for the higher‐end, and positive effects for the lower‐end brand. However, it also shows that sourcing matters. This study is considered as the first study investigating the phenomenon of component sharing, and it points to multiple future research issues, such as studying this phenomenon in other markets.     

Unlocking the link between relationship duration and product De-listing in retail channels: The role of market orientation and brand diffusion

The literature on retailers' range rationalization is limited and focuses primarily on the consequences thereof from a consumer perspective. Drawing on the extant research on buyer-supplier relationships, brand management, and market orientation (MO) in business-to-business (B2B) markets, our research explores the antecedents of product de-listing in retail channels. It unlocks the link between relationship duration and product de-listing by examining the role of MO and brand diffusion. Using a combination of primary data with both objective and perceptual measures and proprietary objective data from a sample of suppliers to a large British supermarket, we find that the supplier's brand diffusion is an essential means of utilizing relationship duration between suppliers and retailers to reduce product de-listing in retail stores. Additionally, we find that MO plays opposite moderating roles in the links between relationship duration, brand diffusion, and product de-listing. It strengthens the negative influence of relationship duration on product de-listing, while it weakens the positive influence of relationship duration on brand diffusion. Our study contributes to research on marketing channels and B2B marketing by highlighting the limitations of relational view theory and unveiling the role of brand diffusion and MO in explaining the outcomes of buyer-supplier relationships in retail channels.     

Exploring the Appeal of Product Design: A Grounded,Value‐Based Model of Key Design Elements and Relationships*

Product design is increasingly being recognized as an important source of sustainable competitive advantage. Until recently, the domain of design has been loosely categorized as “form and function” issues. However, as this paper will explore, product design deals with a much richer range of issues, many of which have not been considered in the marketing literature. To explore the domain and elements of design, the paper begins with two major goals: (1) to elicit the key dimensions of design and to develop an enriched language for the understanding and study of design; and (2) to integrate the design dimensions within a broader model that ties initial design goals to eventual psychological and behavioral responses from consumers. To achieve these ends, grounded theory development is used by conducting an extensive literature review, in‐depth interviews, and an interactive object elicitation technique. Drawing from this rich source of qualitative information as well as diverse literature fields, a framework is proposed for the creation of design value in consumer products. This framework not only explores the domain of design but also highlights the important elements of design that go well beyond the clichéd form and function issues. The resulting model reflects specific marketplace and organizational constraints that may help or impede the conversion of designer goals to so‐called design levers. These levers are used to convey three types of values to consumers: rational, kinesthetic, and emotional. The framework then explains how and when these different values may be perceived by the consumer. Within this framework, testable research propositions and specific directions for future design‐based research are also offered. Beyond its potential to spur marketing and new product development (NPD) management thought, the framework offered here represents a significant contribution to the field of design, which has historically been represented as a highly fragmented body of knowledge. Formalizing this framework should help overcome perhaps the largest obstacle to date to marketing‐related and NPD‐related research in this area—the lack of a detailed and consistent nomological view of the scope of design dimensions including testable linkages. Design has become an important tool that can be used by managers to develop dominant brands with lasting advantages. This research lends the NPD manager and the marketing manager better insights in into how this increasingly popular focus can be used to influence consumer behavior and firm success. “Design may be our top unexploited competitive edge.” Tom Peters, 2004 (cover review of Norman, 2004 ) “We don't have a good language to talk about [design]. In most people's vocabularies, design means veneer.… But to me, nothing could be further from the meaning of design. Design is the fundamental soul of a man‐made creation.” Steve Jobs, Apple Computers