Design Innovativeness and Product Sales' Evolution

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, i.e., 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 United States from 1978 to 2006 for a total of 2,757 model-year data are analyzed. In the second, motorcycle models introduced in the United States from 1980 to 2008 for a total of 2,847 model-year observations are analyzed. I find that design innovativeness diminishes initial sales' status but increases sales' growth rates. Furthermore, design 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.

[1]  Dominique M. Hanssens,et al.  New Products, Sales Promotions, and Firm Value: The Case of the Automobile Industry , 2004 .

[2]  J. Porac,et al.  Sociocognitive Dynamics in a Product Market , 1999 .

[3]  Rupinder P. Jindal,et al.  Managing Sales Force Product Perceptions and Control Systemsinthe Success of New Product Introductions , 2010 .

[4]  Mary W. Sullivan.  Measuring Image Spillovers in Umbrella-Branded Products , 1990 .

[5]  Judith D. Singer,et al.  Using SAS PROC MIXED to Fit Multilevel Models, Hierarchical Models, and Individual Growth Models , 1998 .

[6]  S. Charters,et al.  Aesthetic Products and Aesthetic Consumption: A Review , 2006 .

[7]  O. Ahtola,et al.  Effects of Cost-Related Feedback on Consumer Knowledge and Consumption Behavior: A Field Experimental Approach , 1986 .

[8]  Craig K. Enders,et al.  Centering predictor variables in cross-sectional multilevel models: a new look at an old issue. , 2007, Psychological methods.

[9]  Craig J. Russell,et al.  Using Hierarchical Linear Modeling to Examine Dynamic Performance Criteria Over Time , 1997 .

[10]  Deborah Roedder John,et al.  Consumer Learning by Analogy: A Model of Internal Knowledge Transfer , 1997 .

[11]  I. Simonson,et al.  The Effect of New Product Features on Brand Choice , 1996 .

[12]  Devavrat Purohit,et al.  Exploring the Relationship Between the Markets for New and Used Durable Goods: The Case of Automobiles , 1992 .

[13]  Christopher M. Miller,et al.  Toward Formalizing Fashion Theory , 1993 .

[14]  Ashish Sood,et al.  Technological Evolution and Radical Innovation , 2005 .

[15]  Jaap E. Wieringa,et al.  What about design newness? Investigating the relevance of a neglected dimension of product innovativeness , 2009 .

[16]  V. Mahajan,et al.  Innovation Diffusion in the Presence of Supply Restrictions , 1991 .

[17]  D. Griffith,et al.  Technological and Design Innovation Effects in Regional New Product Rollouts : A European Illustration , 2012 .

[18]  R. Chandy,et al.  The Incumbent's Curse? Incumbency, Size, and Radical Product Innovation , 2000 .

[19]  de Ag Ton Kok,et al.  What determines product ramp-up performance? : a review of characteristics based on a case study at Nokia Mobile Phones , 2007 .

[20]  George B. Sproles.  Analyzing Fashion Life Cycles—Principles and Perspectives , 1981 .

[21]  Douglas E. Hughes.  This ad’s for you: the indirect effect of advertising perceptions on salesperson effort and performance , 2013 .

[22]  Lisa C . Troy,et al.  Innovativeness and new product success: insights from the cumulative evidence , 2007 .

[23]  Grant Mccracken.  Culture and Consumption: A Theoretical Account of the Structure and Movement of the Cultural Meaning of Consumer Goods , 1986 .

[24]  D. Midgley.  Patterns of Interpersonal Information Seeking for the Purchase of a Symbolic Product , 1983 .

[25]  Davide Ravasi,et al.  Creating Symbolic Value: A Cultural Perspective on Production and Exchange , 2004 .

[26]  Micki Eisenman,et al.  Understanding aesthetic innovation in the context of technological evolution. , 2013 .

[27]  Paola Cillo,et al.  Convergent designs in fine fashion: An evolutionary model for stylistic innovation , 2006 .

[28]  F. Bass.  A new product growth model for consumer durables , 1976 .

[29]  Cornelia Dröge,et al.  Technology versus Design Innovation's Effects on Sales and Tobin's Q: The Moderating Role of Branding Strategy , 2013 .

[30]  G. Tellis,et al.  Pioneer Advantage: Marketing Logic or Marketing Legend? , 1993 .

[31]  Herbert Blumer,et al.  Fashion: From Class Differentiation to Collective Selection , 1969 .

[32]  Frank M. Bass,et al.  A New Product Growth for Model Consumer Durables , 2004, Manag. Sci..

[33]  Hema Yoganarasimhan,et al.  Cloak or Flaunt? The Fashion Dilemma , 2012, Mark. Sci..

[34]  G. Tellis,et al.  Will It Ever Fly? Modeling the Takeoff of Really New Consumer Durables , 1997 .

[35]  Elizabeth C. Hirschman,et al.  The Creation of Product Symbolism , 1986 .

[36]  Peter H. Bloch.  Seeking the Ideal Form: Product Design and Consumer Response: , 1995 .

[37]  Gary L. Lilien,et al.  The Total Product Design Concept and an Application to the Auto Market , 2012 .

[38]  V. Mahajan,et al.  Form versus Function: How the Intensities of Specific Emotions Evoked in Functional versus Hedonic Trade-Offs Mediate Product Preferences , 2007 .

[39]  Joseph W. Alba,et al.  Seeing Is Believing (Too Much): The Influence of Product Form on Perceptions of Functional Performance , 2011 .

[40]  Yogesh V. Joshi,et al.  New Product Diffusion with Influentials and Imitators , 2007 .

[41]  Antoaneta P. Petkova,et al.  When Is a New Thing a Good Thing? Technological Change, Product Form Design, and Perceptions of Value for Product Innovations , 2007, Organ. Sci..

[42]  Dirk Snelders,et al.  Designing Visual Recognition for the Brand , 2010 .

[43]  PurohitDevavrat.  Exploring the Relationship Between the Markets for New and Used Durable Goods , 1992 .

[44]  Robert W. Veryzer.  A nonconscious processing explanation of consumer response to product design , 1999 .

[45]  Robert Kreuzbauer,et al.  Embodied Cognition and New Product Design: Changing Product Form to Influence Brand Categorization , 2005 .

[46]  Planned Obsolescence as an Incentive Device for Unobservable Quality , 2009 .

[47]  Remi Trudel,et al.  Looks Interesting, but what does it Do? Evaluation of Incongruent Product form Depends on Positioning , 2011 .

[48]  Andreas Herrmann,et al.  Gut Liking for the Ordinary: Incorporating Design Fluency Improves Automobile Sales Forecasts , 2011, Mark. Sci..

[49]  Christopher R. Knittel,et al.  Keeping it Fresh: Strategic Product Redesigns and Welfare , 2013 .

[50]  Ahmet H. Kirca,et al.  Firm Innovativeness and Its Performance Outcomes: A Meta-Analytic Review and Theoretical Integration , 2012 .