Making Innovation Last: Volume 2

Sustainable Strategies for Long Term Growth

Hubert GATIGNON, David Gotteland, Christophe Haon

• Publisher: Palgrave Macmillan
• Year: 2015
• Print ISBN:
  9781349565436
  9781137572639
• eBook ISBN:
  9781137572646
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Making Innovation Last considers the long term success of a firm. Authored by a trio of top international scholars who present pioneering new work on what it takes to create long term growth, the book examines the internal conditions that are likely to encourage sustainable innovation, as well as what a culture of innovation should look like.

Part IV

Launching Innovations in the Market

11

Predicting New Product Acceptance

Understanding the adoption process leading to acceptance and use of a new product or service is fundamental to assessing its potential, not only as the brand gets introduced but also in the long term. The distinction between the short term and the long term is especially critical for radical innovations that create a completely new product category, as it takes time before these innovations get accepted by the majority of the market. It also has many implications for the dynamic marketing mix strategies, whether pricing or communication strategies. We consider the determinants of the acceptance of new products in this chapter and we discuss how this acceptance gets realized over time in the next chapter. Therefore, in this chapter, we discuss the methods for estimating the market potential. In the next chapter, we focus on the prediction of the speed and shape of diffusion.

The acceptance of new products was discussed earlier in terms of the innovation characteristics, especially as identified by Rogers (1983). However, we then focused on what characterizes innovations rather than on their outcome in terms of acceptance, adoption, or usage. In the first part of this section, we discuss more completely the factors to consider when evaluating the acceptance of innovations. Then, we discuss methodological approaches to estimating market acceptance.

11.1

Determinants of innovation acceptance

The large literature reviewed and the framework proposed by Gatignon and Robertson (1985) for consumer innovation acceptance are still very much relevant today. We include extensions by Gatignon and Robertson (1991) and we update this review by a number of more recent studies, especially many publications that concern the adoption of Internet innovations. We also base our discussion of the acceptance of innovations by organizations on Damanpour’s (1991) meta-analysis of the organizational behavior literature and on Robertson and Gatignon’s (1986) conceptualization from a competitive standpoint. The basic theory is presented in Figure 11.1. In this section, the focus is on the box labeled “Adoption process” and its antecedents shown on the left-hand side of that box. We discuss the diffusion process (shown in the box on the right side of the figure) in a later section, as well as the role of personal influence, which is a major reason for the diffusion process.

In this section, we present what distinguishes the decision to acquire an innovation rather than any other product or brand. However, we first explain the factors that influence that process and therefore the outcome in terms of the acceptance of the innovation. These factors concern not only the role of product characteristics as discussed in Chapters 2 and 3 but also how individual consumer differences explain different levels of innovation acceptance. Although we mentioned consumer innovativeness in Chapter 3, we consider all customer characteristics that have been linked to innovation acceptance. Two other categories of factors were also identified by Gatignon and Robertson (1985), which we will discuss: the impact of the marketing strategy of the firm commercializing the innovation and the role of competitive activity. The model presented in Figure 11.1 applies to consumer markets where the adopter is the individual. It is necessary to make a distinction for business-to-business markets where the buyer is not a single individual and the users may be multiple individuals. This situation is analyzed by Robertson and Gatignon (1986) and Figure 11.2 represents this theory.

Figure 11.1 A model of the consumer adoption process

Source: Adapted from Gatignon and Robertson (1985).

Figure 11.2 A model of the industrial adoption process

Source: Adapted from Robertson and Gatignon (1986).

A number of categories of factors are common to consumer and industrial innovations. These concern innovation characteristics and the resource allocation by the firm marketing the innovation. We discuss these together. However, some key differences occur in the business market as the decision unit is not a single individual and the objectives are typically different. We therefore discuss separately the decision acquisition process for individuals and for businesses. The role of the competitive environment of the acquiring firm is also a category of factors that have no equivalent in consumer markets.

11.1.1

How innovation characteristics influence adoption

Regardless of whether the link is direct or indirect, as seen in Chapter 3, innovation characteristics as they are perceived by consumers impact their decision whether or not to adopt the innovation. We also refer to these perceived innovation characteristics as attributes. We have already mentioned in Chapter 3 a number of studies that consider acceptance of consumer innovations as a criterion variable (e.g., Ostlund 1974, Labay and Kinnear 1981, Holak and Lehmann 1990). Generally, perceived relative advantage, compatibility, trialability, and observability are positively related to adoption, while complexity and perceived risk affect adoption negatively (Gatignon and Robertson 1985). Different types of innovations, such as administrative versus technical (e.g., Kimberly and Evanisko 1981), have also been considered in the literature and will be discussed as moderator variables.

Relative advantage is a rather obvious determinant of acceptance, as the motive to adopt is usually some perceived benefit, even if only realized post-purchase through a cognitive dissonance type of mechanism to reconcile attitude and behavior. It is therefore no surprise that it appears as one of the characteristics that is consistently significant across multiple studies, as found in Tornatsky and Klein’s (1982) meta-analysis.

Much of the evidence of the role of these innovation characteristics concerns intentions to purchase or use. Recent development in the Internet technology has provided opportunities to verify the phenomenon on actual usage. The Technology Adoption Model (TAM) has been tested successfully in a broad range of applications, including the following:

1. Word processors (Davis, Bagozzi and Warshaw 1989)
2. Spreadsheets (Mathieson 1991)
3. E-mail (Szajna 1996)
4. Voice mail (Straub, Lilayem and Karahanna-Evaristo 1995)
5. Telemedicine technology (Hu et al. 1999)
6. World Wide Web as an application (Lederer et al. 2000)
7. Internet shopping (Koufaris 2002, Pavlou 2003)
8. Internet banking (Pikkarainen et al. 2004)
9. Online learning system (Saadé and Bahli 2005)
10. Mobile commerce (Wu and Wang 2005)

Within this TAM, perceived usefulness plays the strongest role and is consistently positively related to usage intentions, as summarized in King and He’s (2006) meta-analysis of 88 published studies, and to actual usage.

Perceived ease of use and features leading to ease of use (which is itself a form of relative advantage) are positively related to attitudes or intentions toward the innovation but may depend on the type of users. King and He (2006) show that the relationship between ease of use and behavioral intention is overall very small at best but that this is due to heterogeneity in terms of types of users; in particular, they distinguish between, on the one hand, professionals and students and, on the other hand, general users. Perceived ease of use does not help professionals and students, but general users respond favorably to easier-to-use systems. This may be explained by another f...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright
• Dedication
• Contents
• List of Tables
• List of Figures
• Foreword
• Preface
• Part III: Organizational Processes for Innovations
• Part IV: Launching Innovations in the Market
• Index