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Companies Brag About Being Innovative
Companies Brag About Being Innovative
CHOOL OF MANAGMNT AT N O R T H W T R N U N I V R I T Y
I N N O VAT I O N ▾ Aug 1, 2016
ased on the research of Kell Goldsmith, Jeffre . Larson and . J. Allen
Michael Meier
T
he next time Apple releases a muchballyhooed 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.
“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
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—and that’s why they stand out so much when they do happen.”
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 digitalcamera
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.
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.
But consumers do not usually write essays about product malfunction before shopping.
What are some realworld conditions where customers might be wary of a product’s ability
to function correctly?
One scenario is something marketers call “lowfit 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 HäagenDazs cottage cheese. Why are we
wary? After all, HäagenDazs is a highquality brand, and they already make dairy
products. Well, we worry that their icecream 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.”
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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 lowfit 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.”
Another realworld 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 cellphone 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.
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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
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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, higherlevel, bigpicture kinds of ideas, concerns about
malfunction risk are less likely to come to mind than when you consider the concrete,
nittygritty 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
innovationfocused brand made many design changes over its 25year history, while the
consistencyfocused 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 sidebyside 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.
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“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.”
M O R A R T I C L I N I N N O VAT I O N
Kell Goldsmith
Assistant Professor of Marketing
DPARTMNT: Marketing
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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