Innovation Marketing Aug 1, 2016

Com­pa­nies Brag about Being Inno­v­a­tive. Should They?

Cer­tain cir­cum­stances make cus­tomers wary of inno­v­a­tive brands.

Michael Meier

Based on the research of

Kelly Goldsmith

Jeffrey S. Larson

B. J. Allen

The next time Apple releas­es a much-bal­ly­hooed new prod­uct, don’t look for Kel­ly Gold­smith wait­ing in line to buy it.

Not that Gold­smith, an assis­tant pro­fes­sor of mar­ket­ing at the Kel­logg School, has any­thing against the com­pa­ny. It is just that her research has made her sen­si­tive to the poten­tial down­side of innovation.

Every­one likes a fan­cy new phone with new fea­tures,” she says. Yet, as much as there are upsides to inno­va­tion, there are always downsides.”

In new research, Gold­smith and coau­thors Jef­frey S. Lar­son of Brigham Young Uni­ver­si­ty and B.J. Allen of the Uni­ver­si­ty of Texas at San Anto­nio exam­ine the ways in which a rep­u­ta­tion for inno­va­tion can actu­al­ly hurt a company.

Specif­i­cal­ly, trum­pet­ing an inno­v­a­tive brand can back­fire when some­thing about the prod­uct trig­gers a customer’s con­cern, or because the cus­tomer is in a fret­ful state of mind.

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We weren’t pre­dict­ing that a rep­u­ta­tion for inno­va­tion is always going to have neg­a­tive con­se­quences,” Gold­smith stress­es. If that were the case, no com­pa­ny would tout its inno­v­a­tive­ness, and pub­li­ca­tions like Forbes and Fast Com­pa­ny would not cre­ate lists of the most inno­v­a­tive brands.

It’s only going to have neg­a­tive con­se­quences when con­sumers are prompt­ed to wor­ry,” she says. Most peo­ple, most of the time, expect their prod­ucts to work. We’re lucky enough to live in a day and age where prod­uct mal­func­tions cer­tain­ly aren’t that com­mon — and that’s why they stand out so much when they do happen.”

When Wor­ry Kicks In Over Inno­v­a­tive Brands

The researchers start­ed by prim­ing par­tic­i­pants to wor­ry about a prod­uct mal­func­tion to see if that did, indeed, sour them to inno­v­a­tive brands.

In one study, 266 par­tic­i­pants recruit­ed online were ran­dom­ly assigned to write about either a few times a prod­uct mal­func­tioned or about a few things they did in the past week.

Each par­tic­i­pant then read print adver­tise­ments for a hypo­thet­i­cal dig­i­tal-cam­era com­pa­ny. Some of the par­tic­i­pants saw ads fea­tur­ing the tagline Inno­va­tion is our focus,” oth­ers saw the tagline Great pho­tos are our focus,” and a third group of par­tic­i­pants saw ads with­out a tagline. All par­tic­i­pants were then told that the com­pa­ny had intro­duced a new cam­era that uploads pic­tures wire­less­ly. After view­ing an ad for it, they were asked to rate the camera’s quality.

For cer­tain prod­ucts, like cell phones or hybrid cars, it doesn’t mat­ter what brand makes it or what the specifics are, peo­ple are wor­ried about them malfunctioning.”

Those who had been primed to think about mal­func­tion­ing prod­ucts — but not par­tic­i­pants who had sim­ply writ­ten about their week — were much more wary of the inno­v­a­tive brand than of the oth­er brands, rank­ing its cam­era as low­er quality.

In oth­er words, hav­ing a rep­u­ta­tion for inno­va­tion was detri­men­tal only when peo­ple were already think­ing about prod­ucts that had failed them.

When One of Those Things Is Not Like the Others

But con­sumers do not usu­al­ly write essays about prod­uct mal­func­tion before shop­ping. What are some real-world con­di­tions where cus­tomers might be wary of a product’s abil­i­ty to func­tion correctly?

One sce­nario is some­thing mar­keters call low-fit brand exten­sion,” which is when com­pa­nies move into new and seem­ing­ly unnat­ur­al markets.

These are prod­ucts that seem like a stretch for the brand,” Gold­smith explains, com­ing up with a few fic­ti­tious exam­ples, such as Häa­gen-Dazs cot­tage cheese. Why are we wary? After all, Häa­gen-Dazs is a high-qual­i­ty brand, and they already make dairy prod­ucts. Well, we wor­ry that their ice-cream skills aren’t trans­fer­able to cot­tage cheese. The same holds for, say, Heineken pop­corn or BMW skate­boards. So we pre­dict­ed that when con­sumers eval­u­ate prod­ucts like these, their mal­func­tion risks are already heightened.”

To test this pre­dic­tion, the researchers recruit­ed 172 under­grad­u­ate stu­dents and ran­dom­ly assigned them to one of three groups. All par­tic­i­pants read a his­to­ry of a fic­tion­al brand of Euro­pean shoes that empha­sized the shoes’ high qual­i­ty. For some par­tic­i­pants, the his­to­ry also empha­sized the brand’s rep­u­ta­tion for innovation.

Par­tic­i­pants next rat­ed pairs of the brand’s shoes — both the dress shoes they were known for and a new line of sneak­ers that was a low fit for the brand — for qual­i­ty and pur­chase likelihood.

The results: par­tic­i­pants who had been prompt­ed to think about the brand’s rep­u­ta­tion for inno­va­tion were less like­ly to pur­chase the run­ning shoes, but no less like­ly to pur­chase the dress shoes.

We pre­dict­ed that when con­sumers eval­u­ate low-fit brand exten­sions, their mal­func­tion risks are already height­ened,” Gold­smith says. Where­as when they eval­u­ate flag­ship prod­ucts they know the brand is good at mak­ing, we shouldn’t see these neg­a­tive effects, and that’s exact­ly what we find in the data.”

Inno­va­tion Can Affect Qual­i­ty Perception

Anoth­er real-world sce­nario: some types of prod­ucts are sim­ply con­sid­ered chron­i­cal­ly unreliable.

For cer­tain prod­ucts, like cell phones or hybrid cars, it doesn’t mat­ter what brand makes it or what the specifics are, peo­ple are wor­ried about them mal­func­tion­ing,” Gold­smith says.

So how does a rep­u­ta­tion for inno­va­tion affect how con­sumers per­ceive the qual­i­ty of, say, a cell phone? Does sim­ply mar­ket­ing a prod­uct that is per­ceived as finicky cause con­sumers to be wary of inno­v­a­tive brands?

To find out, the authors had online par­tic­i­pants read one of four brief his­to­ries of the same fic­tion­al cell-phone man­u­fac­tur­er: one that focused on the manufacturer’s qual­i­ty, one on its inno­va­tion, one on both, and one on nei­ther. The par­tic­i­pants then rat­ed the qual­i­ty and like­li­hood of mal­func­tion for four dif­fer­ent cell phones from the manufacturer.

Those who asso­ci­at­ed the brand only with qual­i­ty gave it high marks, while those who asso­ci­at­ed the brand with both qual­i­ty and inno­va­tion gave the phones low qual­i­ty rat­ings. This pat­tern was con­sis­tent with the researchers’ pre­dic­tion that, for unre­li­able prod­ucts, a rep­u­ta­tion for inno­va­tion could be harmful.

But — to the authors’ sur­prise — the par­tic­i­pants who asso­ci­at­ed the brand with inno­va­tion only did not rate the phones as low­er qual­i­ty. In oth­er words, hav­ing a rep­u­ta­tion for inno­va­tion hurt the brand only if par­tic­i­pants had been primed to also asso­ciate the brand with quality.

We didn’t pre­dict that, going into this exper­i­ment,” Gold­smith says. One poten­tial expla­na­tion, she says, is that there are pos­i­tive asso­ci­a­tions with inno­va­tion if you have noth­ing else going for you. If you don’t have much of a brand iden­ti­ty, devel­op­ing an iden­ti­ty for inno­va­tion is bet­ter than nothing.”

Cog­ni­tive Orientation

So if a rep­u­ta­tion for inno­va­tion can cause prob­lems for brands, why do so many tout it?

This ties back to the notion that inno­va­tion is good in the abstract,” Gold­smith says. In the­o­ry, who isn’t inter­est­ed in hav­ing the lat­est, great­est new prod­uct? But when faced with an actu­al pur­chas­ing deci­sion, dif­fer­ent pri­or­i­ties may emerge.

To get at this idea, anoth­er exper­i­ment looked at how peo­ple eval­u­ate inno­v­a­tive brands when they are in an abstract ver­sus con­crete mindset.

When you think about abstract, high­er-lev­el, big-pic­ture kinds of ideas, con­cerns about mal­func­tion risk are less like­ly to come to mind than when you con­sid­er the con­crete, nit­ty-grit­ty aspects of a prod­uct,” Gold­smith explains. For exam­ple, abstract thoughts about tooth­paste might focus on the product’s abil­i­ty to con­tribute to den­tal hygiene, where­as con­crete thoughts might focus on the product’s texture.

Pre­vi­ous lit­er­a­ture has shown that when con­sumers eval­u­ate a prod­uct on its own mer­its, they tend to think more abstract­ly. But when they make pur­chas­ing choic­es between prod­ucts, they tend to think concretely.

So in this exper­i­ment, par­tic­i­pants read about two dif­fer­ent blender man­u­fac­tur­ers. The inno­va­tion-focused brand made many design changes over its 25-year his­to­ry, while the con­sis­ten­cy-focused brand rarely changed its design.

Some of the par­tic­i­pants then eval­u­at­ed a vari­ety of blenders from each man­u­fac­tur­er, look­ing at them one by one. The rest were shown the blenders in pairs and asked to com­pare them side by side and indi­cate which they would buy.

Those par­tic­i­pants who eval­u­at­ed the blenders in iso­la­tion, and were thus in an abstract mind­set, were more like­ly to pre­fer the blenders from the inno­v­a­tive brand. Those who did the side-by-side com­par­i­son, and were there­fore in a con­crete mind­set, pre­ferred the con­sis­tent one.

Tak­en togeth­er, the find­ings indi­cate that com­pa­nies should not be over­ly eager to jump on the inno­va­tion band­wag­on, Gold­smith says.

It seemed odd that no mat­ter what you read in the pop­u­lar press, peo­ple always say inno­va­tion is good and impor­tant,” she says. This seems like a very nar­row view of innovation.”

Featured Faculty

Kelly Goldsmith

Member of the Department of Marketing faculty until 2017

About the Writer

Anne Ford is a writer in Evanston, Illinois.

About the Research

Goldsmith, Kelly, Jeffrey S. Larson, and B. J. Allen. Under Review. “When a Reputation for Innovativeness Confers Negative Consequences for Brands.”

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