Decomposing Product Innovativeness and its Effects upon New Product Success

Does product innovativeness affect new product success? While the popular media has often extolled the virtues of innovative products, the results of empirical research are mixed, with evidence the impact of product innovativeness is contingent (Henard and Szymanski, 2001) and even curvilinear (Kleinschmidt and Cooper, 1991). The current research propose the ambiguity in findings may be due to an overly holistic conceptualization of product innovativeness, that has erroneously included the concepts of product advantage and customer familiarity. This article illustrates how the same measures have often been used to assess product advantage and product innovativeness, and product innovativeness and customer familiarity. These paired overlaps in measurement use are clarified in this research that decomposes dimensions of product innovativeness along conceptual lines into distinct product innovativeness, product advantage, and customer familiarity constructs. To further support this decomposition, structural equation modeling is used to empirically test the distinctions. The measurement model supports the conceptual separation, and the path model reveals contingent effects of product innovativeness. While product innovativeness enhances product advantage, a high level of innovativeness reduces customer familiarity. This indicates product innovativeness can be detrimental to new product success if customers are not sufficiently familiar with the nature of the new product, and if innovativeness fails to improve product advantage. This exercise in metric development also reveals that after controlling for product advantage and customer familiarity, product innovativeness has no direct effect upon new product profitability. This finding has strong implications for firms that mistakenly pursue innovation for its own sake. Consideration of both distribution and technical synergy as driving antecedents, demonstrates how firms can still enhance new product success, even if an inappropriate level of innovativeness is present. This leads to a simple but powerful two-step approach to bringing highly innovative products to market. Firstly, firms should only emphasize product innovativeness when it relates to the market relevant concepts of product advantage and customer familiarity. Secondly, existing technical and distribution abilities can be used to enhance product quality and customer understanding. Distribution channels in particular should be exploited to counter customer uncertainty toward newly introduced products.