Marketing Science, 34(1), 98-115.
In the last decade, design innovation has gained increasing prominence in the marketplace, with a growing number of firms innovating not only through technology but also through novel product forms (i.e., design). However, while the effect of technological innovation on product sales is a heavily studied topic, a defining theory of how design innovation influences product sales is still missing. This paper provides demand- and supply-side theories to formulate a set of coherent hypotheses about the effect of design innovativeness – namely, the degree of novelty in a product’s design - on sales’ evolution over time. The hypotheses are tested in two different samples: In the first, car models introduced in the US from 1978 to 2006 (for a total of 2,757 model-year data) are analyzed. In the second, motorcycle models introduced in the US from 1980 to 2008 (for a total of 2,847 model-year observations) are analyzed. We find that design innovativeness diminishes initial sales’ status but increases sales’ growth rates. Further, design innovativeness and technological innovativeness have a negative interaction effect on sales’ initial status, but a positive effect on sales’ growth rates. Finally, brand strength and brand advertising expenditures worsen the negative effect of design innovativeness on initial sales’ status, but boost its positive effect on sales’ growth rates.
Technology Versus Design Innovation's Effects on Sales and Tobin's Q: The Moderating Role of Branding Strategy (2013)
Rubera Gaia and Droge Cornelia
Journal of Product Innovation Management, 30(3): 448-464
This research investigates the impacts on firm performance of (1) technology versus design innovation and (2) their potentially synergistic interaction. Synergies could arise from complementarities, in particular the utilization of technology innovation as a platform for design innovations. Both sales and Tobin’s q are examined as dependent performance variables, with sales tapping consumer responses and Tobin’s q reflecting investor responses. Moderation by branding strategy (i.e., Corporate Branding versus Mixed Branding versus House of Brands) is analyzed because innovation may impact performance differently depending on branding strategy. Advertising effects, the number of new product introductions, their interaction, R&D expenditures, operating margins, and firm size are also modeled as covariates. The results show that all main and interaction effects are significant in at least one of the branding groups, and that moderation of model paths by branding strategy was pervasive.
Technological and Design Innovation Effects in Regional New Product Rollouts: A European Illustration (2012)
Rubera Gaia, Griffith David A., and Yalcinkaya, Goksel
Journal of Product Innovation Management, 29(6): 1047-1060
Firms are increasingly recognizing the importance of understanding regional dynamics and their effects on competitiveness.
One such area that is gaining increased importance due to intra-regional trade is the factors contributing to the successful rollouts of new products within a region. New product rollouts are complicated by nature but are further compounded by intricacies in the type of innovation (i.e., technological or design) being introduced into a region. Unfortunately, limited research has investigated this area. This study works to address this limitation by examining the per country performance effects of regional new product rollouts of technological and design innovations. The study examines the introduction of 14 technological innovations and 12 design innovations across 17 unique firms operating in eight European countries from 2000 to 2007. Specifically, this study attempts to show (1) an important role of the type of innovation on a firm’s regional new product rollout strategy; (2) a relationship between national culture and th effectiveness of regional rollout strategies; and (3) an influence of economic openness on the type of innovation for regional new product rollout strategies. The results indicate that a longer regional new product rollout strategy is a more effective strategy for technological innovations, while a shorter regional new product rollout strategy is a more effective strategy for design innovations. The study also presents significant interaction effects in relation to the cultural dimensions of uncertainty avoidance and power distance as well as a significant effect of economic openness.
A Cross-Cultural Investigation of New Product Strategies for Technological and Design Innovations (2014)
David A. Griffith and Gaia Rubera
Journal of International Marketing
Although design and technological innovations are conceptually distinct and require significantly different resource investments by the firm, little is known about how differing strategies employed in relation to these new products influence changes in market share across national cultures. In this study, the authors provide insights into how technological and design product innovations and product portfolio breadth strategies influence changes in market share within 26 technological and 12 design innovations across 17 firms operating in eight European countries. The results indicate that the positive effect of design innovation on changes in market share strengthens as individualism and indulgence increases, whereas the positive relationship between technological innovations and market share is weakened as uncertainty avoidance and indulgence increase. In addition, the positive relationship between design product portfolio breadth strategies and changes in market share is strengthened as individualism and indulgence increase but is weakened as uncertainty avoidance increases, whereas the positive relationship between technological product portfolio breadth and changes in market share is strengthened as individualism increases.
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