Chapter 2 theorised the CPBI conceptualisation and developed the CPBI measurement by answering two research questions. (1) How do consumers perceive innovativeness at the brand level? And (2) how do we measure consumer perceived brand innovativeness? Built on the findings from exploratory and scaling studies, Chapter 3 is aimed at theorising and developing the CPBI processing model with the focus on two further research questions: (3) do firms’ effort to launch product innovations lead to CPBI? and if so, how exposure to the innovation affects consumer evaluations of the brand’s innovativeness? and (4) what are the consequences of CPBI? To address questions (3) and (4), the following sections first provide a review of the key findings in the literature on consumer perceived innovativeness within its nomological network of relationships. The discussion elaborates the shortcomings of the current consumer perceived brand innovativeness literature. Next, the CPBI processing model proposed in this thesis is developed. Laboratory study (reported in the next chapter) is used to build upon insight gained in the six exploratory and scaling studies, including a conceptualisation and operationalisation of CPBI, by empirically examining the proposed CPBI processing model.
3.2 Background Literature
The brand innovativeness literature is very scarce. As reviewed in Chapter 2 there are a few studies that empirically examined consumer perceived innovativeness at the brand level. In an inter-disciplinary study, Mizik and Jacobson (2008) updated the Young & Rubicam Brand Asset Valuator model (Y&R BAV; www.yrbav.com) by adding brand energy to the initial four brand dimensions of differentiation, relevance, esteem and knowledge. Using secondary data from the consumer perspective, they tested the predictive validity of the updated Y&R BAV in explaining stock returns (return on assets: ROA and sales). They found that brand energy, which includes two dimensions of brand innovativeness and dynamism, provide incremental information to accounting measures in explaining stock returns. Although the study was one of the first to empirically examine the outcomes of consumer perceived brand innovativeness, it is limited in a sense that the analysis was narrowed to corporate brands (consumer perceived firm innovativeness: CPFI). As reviewed in Chapter 2, CPFI and CPBI are two distinct constructs and the consumer perceived innovativeness findings at the firm level may not always be generalisable to the brand level.
38
Chapter 3 The CPBI Processing Model
In the context of international marketing, the influence of culture on the impact of four key brand management elements (i.e., brand innovativeness, brand customer orientation, brand self- relevance, and social responsibility) on customer commitment to a brand was examined in another study (Eisingerich & Rubera, 2010). Using responses from U.K. and Chinese consumers, the authors found that brand innovativeness had a greater effect on brand commitment in cultures that are individualist, short-term oriented and low on power distance (i.e., the United Kingdom). However, as detailed in Chapter 2 (see Section 2.2.3 Consumer Perceived Brand Innovativeness for a detailed discussion), the research confounded the notion of consumer perceived product innovativeness (CPPI) with consumer perceived brand innovativeness (CPBI), not recognising that the concept of brand is different and broader than the concept of product. This limitation also applies to the study by Boisvert and Ashill (2011), in which the authors found that brand innovativeness of a service extension (or more precisely; consumer perceived product innovativeness) positively impacted attitude toward service extension.
More recently, in an examination of advertising persuasiveness, Barone and Jewell (2014) found that the influence of the competitive advertising context (how typically or atypically advertising tactics are employed by brands in a product category) on an advertisement’s persuasiveness (measured by attitude towards the advertisement) was moderated by consumer perceived brand innovativeness, because innovative brands enjoyed higher advertisement flexibility. The study does not exactly define the construct consumer perceived brand innovativeness and in their experimental approach, CPBI was manipulated as high versus low innovative brands using different brand names of laptops (e.g., Sony and Getaway). Finally, consumer perceived brand innovativeness has been found to positively affect consumer satisfaction (Pappu & Quester, 2013). However, by the time of the present thesis submission, the Pappu and Quester’s paper was under review for a journal publication. Thus, it was not possible for the author to provide more detailed criticism of this article. Together, although the current emerging literature provides a few evidences for the consequences of consumer perceived brand innovativeness (e.g., stock return, brand commitment, attitude toward service extension), the findings are limited by confounding CPBI and CPPI (Boisvert & Ashill, 2011; Eisingerich & Rubera, 2010) or CPBI and CPFI (Mizik & Jacobson, 2008).
In addition to these shortcomings regarding the outcomes of consumer perceived brand innovativeness (CPBI), CPBI was hardly the main focus of the research in the above studies. Specifically, the literature does not address what are possible drivers of CPBI and how these drivers may be influential in enhancing CPBI. For instance, while product innovations have been highlighted as a possible driver of CPBI (Aaker, 2007), yet no empirical study has examined if and how firms’ effort to launch product innovations lead to CPBI? While from a brand’s perspective
one of the main goals of new product developments is to signal a brand innovativeness image to its consumers (Aaker, 2007), such lack of consideration of the CPPI in the study of CPBI is particularly at odds with the huge cost of new product development programs for each innovation (Srinivasan et al., 2002).
Consumer perceived product innovativeness literature is almost silent on the relationships between CPPI and CPBI. The research has mainly focused on: (1) conceptualisation and measurement of the construct (for a detailed review see Section 2.2.1 Consumer perceived product innovativeness); (2) the effect of CPPI on purchase intention (e.g., Alexander, Lynch JR., & Wang, 2008; Rubera et al., 2011), new product advantage and profitability (Calantone et al., 2004; McNally et al., 2010), new product performance (Lee & O’Connor, 2003), firm performance (e.g., Avlonitis & Salavou, 2007; Cillo, de Luca & Troilo, 2010); and (3) possible drivers of CPPI such as technological newness, perceived newness, relative advantage (Lowe & Alpert, 2013), team level factors of social cohesion and superordinate identity (Sethi et al., 2001), entrepreneurial orientation of a firm (Avlonitis & Salavou, 2007), technical synergy within a firm (Calantone et al., 2004) and market information approaches of a firm (Cillo et al., 2010). Thus, the current CPPI literature does not provide insight on the relationship between CPPI and CPBI.
Although research on CPPI does not address the aforementioned gap, the extensive history of brand extensions provides some initial evidence for the relationship between a new product as an extension and the parent brand. For example, it has been found that different brand characteristics such as brand attitude (Aaker & Keller, 1990), brand image (Boisvert, 2012), brand familiarity (Martinez & Pina, 2010), perceived brand quality (Smith & Park, 1992; Völckner & Sattler, 2006), brand credibility (Kirmani, Sood, & Bridges, 1999), brand experience (Swaminathan, Fox, & Reddy, 2001) and brand-extension fit (Milberg, Sinn, & Goodstein, 2010) affect consumer perception about the extension. Also, consumer perception about the extended new product has been found to impact consumer perceptions of the parent brand’s attitude (e.g., Aguirre-Rodriguez, Bóveda-Lambie, & Montoy, 2013; Keller & Aaker, 1992) and overall brand image (e.g., Bravo, Iversen & Pina, 2011; Loken & John, 1993; Martinez & Pina, 2003; Sullivan, 1990).
While rich, brand extension literature has one fundamental limitation: Surprisingly, the research to date has not looked at consumer perceived innovativeness neither at the product nor at the brand level. Consumers’ evaluations of the new extended product are mainly limited to the attitude toward the extension (Aaker & Keller, 1990; Bravo et al., 2011; Grime, Diamantopoulos, & Smith, 2002; Martinez & Pina, 2010; Milberg et al., 2010) and perceived quality of the new extended product (Keller & Aaker, 1992; Völckner & Sattler, 2006), leaving the CPPI evaluation of the extended product unexplored. Thus, it is very difficult to conclude that the so called new extended product in these studies was even perceived as a new offering. Similarly, few, if any, of
40
Chapter 3 The CPBI Processing Model
prior studies in this stream of research considered CPBI as a possible consumer evaluation for the parent brand.
Overall, the current literature built on multiple research streams, including CPBI, CPPI and brand extensions, is generally silent on if and how exposure to a product innovation may affect consumers’ perception about brand innovativeness (CPBI), and provides little insight on what the consequences of this CPBI are. Addressing these research gaps, in the next section, a conceptual model of CPBI will be presented.