Why innovations also boost the brands’ remaining products and services

3 August 2015 14:56

(updated: 18 December 2016 15:01)

Why innovations also boost the brands’ remaining products and services

Many firms preannounce new innovations long before they are actually available on the market. The iPhone, the Lego movie, and the Tesla electric car are only a few examples of successful products and services preannounced long before they were commercially available to consumers.

In CSI, we have previously investigated the positive effects of such preannouncements on consumer responses. Less is known, however, about how promised innovations and future services shape consumer perceptions of the brands’ remaining products and services. Do consumers develop more positive attitudes toward Lego Ninjago when they see trailers for the forthcoming Lego movie? What happens to consumers’ evaluation of DNB’s other online services when DNB’ launches Vipps peer-to-peer payment?

In a recent study published in Journal of Product Innovation Management, the leading innovation journal, CSI researchers examine how NPPs affect consumers’ construal of and preferences for the new innovation and, in turn, how these evaluations influence their preferences for the brands’ other products and services. Specifically, the article demonstrates that consumers’ construal level of NPPs spills over to their construal of other products in the brand family, causing a positive, biased evaluation of these products. Three experimental studies reveal that the mere information about an NPP can shift evaluation of currently available brand products in a positive direction through construal-level spillover and increased perceptions of similarity. The studies contrast NPPs to new product announcements (NPAs) and consistently find more positive results for the former. Moreover, the studies find that product newness has a moderating effect on the results, such that the positive spillover effects are more pronounced for radical innovations than for incremental innovations. The studies also demonstrate that the positive evaluative spillover is specific to the products in the brand family and does not positively affect consumers’ perceptions or choice of competitor products. Consumers actually rate the competing brand’s remaining products lower when the focal brand engages in NPPs. The study has important implications for service firms regarding how to use preannouncement of innovations to influence consumers’ construal and evaluations of all brand products and services.

The full (forthcoming) article can be found here

The Effect of New Product Preannouncements on the Evaluation of Other Brand Products, Journal of Product Innovation Management. By Helge Thorbjørnsen (Norwegian School of Economics), Micael Dahlén (Stockholm School of Economics) and Yih Hwai Lee (National University of Singapore)