Could having a reputation as an innovative brand actually have a downside?
That’s the question Kelly Goldsmith, an assistant professor of marketing at the Kellogg School, was looking to answer with a recent research study.
Goldsmith and her coauthors predicted that a reputation for innovation can actually hurt a company when something about the product triggers a customer’s concern or if the customer is already in a fretful state of mind.
“We weren’t predicting that a reputation for innovation is always going to have negative consequences,” Goldsmith stressed. “It’s only going to have negative consequences when consumers are prompted to worry,” she noted. “Most people, most of the time, expect their products to work.”
The researchers conducted a series of experiments to test their hypothesis, priming participants to worry about a product malfunction and to question quality to see whether it soured them to innovative brands.
Among their findings:
- Frame of mind makes a difference. Study participants who had been primed to think about times a product had malfunctioned were much more wary of brands that seemed to focus advertising on innovation rather than quality.
- Customers may avoid a product that is part of a “low-fit brand extension,” which is when companies move into new and seemingly unnatural markets—like if Häagen-Dazs decided to make cottage cheese or BMW began manufacturing skateboards. Participants who had been prompted to think about a brand’s reputation for innovation were less likely to purchase a low-fit product but no less likely to purchase the company’s flagship product, the study found. “When consumers evaluate low-fit brand extensions, their malfunction risks are already heightened,” Goldsmith said.
- Consumers may be harder on brands that focus on both quality and innovation. Study participants who had been prompted to associate a brand only with quality gave it high marks, while those prompted to associate it with both quality and innovation gave its products low quality ratings. Surprisingly, researchers said, participants who associated the brand only with innovation did not rate the products as lower quality. In other words, having a reputation for innovation hurt the brand only if participants had been primed to also associate it with quality.
- People evaluate innovative brands differently when they are in an abstract versus concrete mindset. The study participants evaluated a variety of products—some looking at them one by one, while others conducted side-by-side comparisons. Those participants who evaluated the products in isolation were more likely to prefer the innovative brand, while those who did the side-by-side comparison preferred the more consistent brand. “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 explained.
See the full Kellogg Insight article here: “Companies Brag about Being Innovative. Should They?“