With higher revenues, lower costs and better market valuations, it pays to be an innovative firm. What’s more, the favorable impact of innovativeness is even stronger for really new innovations in comparison to incremental innovations, according to a 2012 study in the Journal of Marketing. So it pays even more to focus on really new innovations. Motion-sensing technology, for example, was a really new innovation for video game consoles in comparison to push-button controls of previous products because it incorporated a major advance in technology. Similarly, wireless phone charging and driverless technology are recent examples of really new innovations, leading to novel benefits that aren’t available with existing products.
But just as it pays to be an innovative firm focused on really new innovations, it is also a path fraught with risk and substantial hurdles to consumer adoption. What if consumers don’t understand the benefits of the innovation? What if they think that the new technology could undermine current product performance? What if the same innovation had a better chance of success if it was simply configured differently? What if a change in product configuration made it easier for consumers to understand product benefits and reduce their perceived risk? As a marketing executive, you’d want to know how a change in product configuration could do that, wouldn’t you?
How Changes to Product Configuration Boosts Success
In the June 2015 study, “Core Versus Peripheral Innovations: The Effect of Innovation Locus on Consumer Adoption of New Products,” Zhenfeng Ma, Tripat Gill and Ying Jiang from Wilfrid Laurier University and University of Ontario Institute of Technology set out to answer these questions in a series of four experimental studies with video game consoles, automobiles, smartphones and washing machines as areas of product focus.
In each experiment, the researchers presented a scenario to a sample of adult consumers in which participants were asked to imagine a product that featured a new technology. Participants were randomly assigned to one of four scenario variations based on changing two things: 1) whether the new technology was described either as built-in to an existing product or as an accessory to an existing product; and, 2) whether the new technology was really new (such as mind control for a video game console) or incremental (such as more accurate motion sensing for a video game console) in comparison to existing products.
The researchers found that consumers’ adoption intentions, measured as being “interested in purchasing” and “likely to purchase,” were higher for a really new innovation when the new technology was peripheral (i.e., not built in) versus core to the product. However, a difference in configuration didn’t matter for incremental innovations.
In addition, the researchers explored whether or not it mattered that the new technology was presented as simply optional, but still built in, or optional and detachable. The results were clear: Adoption intentions for a really new innovation were only higher when the new technology was both optional and detachable. And it doesn’t just matter—it matters a lot. In the same automobile study, study participants who read the description in which the autopilot technology was optional and detachable were nearly 3.5 times more likely to book a test drive than those who read that the same technology was optional, but still built in. And since more trials lead to more purchases, a simple change in product configuration could be the difference between success and failure.
Why Product Configuration Matters
A question naturally arises as to why the decision to integrate a new technology into a product one way versus another makes a difference. The technology is the same. The use is the same. The benefits are the same. It doesn’t seem that it should matter, but clearly it does.
In a couple of the experiments, the researchers were able to show that the impact of presenting a new technology as peripheral has a positive impact on adoption intentions because it makes it easier for consumers to understand benefits, it lowers perceived performance risk, and it increases perceived usage flexibility, and here’s why: When a really new technology is peripheral to a product, this makes it easier for consumers to represent it in memory. We can simply add a technology and benefit tag to an existing memory structure rather than rearrange how attributes and benefits are represented. This also keeps the risk associated with the new technology from spilling over to the product as a whole. And it means that the new technology is more likely to be viewed as an addition to functionality rather than an alternative, which increases perceived usage flexibility.
It should be the marketer’s goal to guide innovation in a way that enhances adoption likelihood. If new technology can be added as a detachable accessory, this research makes it clear that this should be done. Of course, this research also argues for marketing getting involved in new product activities well before planning for product launch. Since marketing often doesn’t control product design, such earlier involvement will require new capabilities in building support across functional areas and persuading others that a particular design path is best for the organization as a whole.
Lance A. Bettencourt is a co-founder and managing partner of LIFT PhD, a service that matches corporate decision-makers with the expertise of business school professors. Bettencourt is a distinguished marketing fellow at the Neeley School of Business at Texas Christian University, and author of Service Innovation: How to Go from Customer Needs to Breakthrough Services.