Symposium for the Innovation Track
British Academy of Management 2007 Annual Conference

Innovation and Marketing in the Global Economy: Linking Firms and Consumers in the Innovation Process

Symposium chairs:

Qing Wang, Warwick Business School, University of Warwick
Jaideep Prabhu, Tanaka Business School, Imperial College

Discussants:

Simon Collinson (Warwick University), Robin Wensley (Warwick University)

Date and Time: Wednesday, 12 September 2007

Venue: Scarman House, LT2, Warwick University

PRESENTATION TITLES AND AUTHORS:

“What Drives Word-of-Mouths? The Role of Product Originality and Usefulness”
Sarit Moldovan (Hebrew University of Jerusalem), Jacob Goldenberg (Hebrew University of Jerusalem), Amitava Chattopadhyay* (INSEAD)

“Consumer Learning Processes for Really New Products”
Veronica Wong* (Aston University), Stephanie Feiereisen (Aston University), Amanda Broderick (Aston University)

“As Time Goes By: Warm Intentions and Cold Feet for Really New vs. Incrementally New Products?”
David Alexander (Duke University), John G. Lynch, jr. (Duke University) and Qing Wang* (Warwick University)

“Radical Innovation in Firms Across Nations”
Gerard J. Tellis (University of Southern California), Jaideep C. Prabhu* (Imperial College) and Rajesh K. Chandy (University of Minnesota)

*These authors have agreed to present, should the session be accepted.

SYMPOSIUM OUTLINE

Technological innovations are an important source of growth for firms and economies worldwide. They create new markets and improve the quality of products while reducing prices. They can also propel small outsiders into industry leaders and bring down large incumbents. Firms at the leading edge of innovation tend to dominate world markets and promote the international competitiveness of their home economy. For these reasons, firms and governments throughout the world now emphasize the critical importance of innovation. This is not only true of rich, OECD governments and firms but also firms and governments in countries like China, India, Taiwan, Korea, and Singapore.

Despite the rewards to successful innovation, the failure rate of innovations and the cost of their failure are also high. For example, in the late 1980s, GO Corporation led a revolution in mobile personal computing by championing a pen-based personal computer. GO geared up to meet the demands of a seemingly enthusiastic market, and attracted $75 million from investors. Yet, after six years, GO found itself with a great product that nobody found useful, and was soon out of business.

GO’s experience typifies the issues firms face in developing and marketing new products worldwide. It raises the question “How does a firm that was successful at developing revolutionary products fail to predict and meet consumers’ needs so spectacularly?” We believe GO, like many firms, followed traditional strategies for technological innovation which disconnect firms from consumers. More specifically, we believe these strategies: 1) disconnect firms’ capabilities for developing new products from their capabilities for marketing new products and 2) disconnect firms’ capabilities for radical innovation from their capabilities for incremental innovation. Our objective in this session is to examine the links between firms and consumers in the process of developing and commercialising radical and incremental innovations.

The four papers in this symposium look at different aspects of the links between firms and consumers in the innovation process worldwide. The paper by Moldovan, Goldenberg and Chattopadhyay explores how two important dimensions of innovation, i.e. Originality and Usefulness, affect word-of-mouth (WOM), and hence the adoption of a new product. By linking marketer-controlled variables (i.e. originality and usefulness) to consumers’ intentions to initiate WOM, these studies lay a foundation for marketing strategies that may influence market growth, speed of diffusion of product success. Alexander, Lynch and Wang examine, from the consumer perspective, how differences in consumers’ thinking about really-new (RNPs) vs. incrementally-new products (INPs) alters the formation of long-term new-product purchase intentions and the likelihood that they follow through on these intentions. Wong, Feiereisen and Broderick’s paper investigates consumer learning processes for really-new products and the causal relationship between the processes and outcomes of consumer learning. Tellis, Prabhu and Chandy’s paper studies the drivers of innovation in firms across nations. Specifically, it puts country level drivers such as religion, country culture, intellectual property protection, patents, and R&D spending against firm level factors such as future market orientation, willingness to cannibalise current assets, incentives for innovation and the use of internal markets. Their research also establishes an empirical link between radical innovation and firms’ financial performance across nations.

We expect that this symposium will attract a wide BAM audience, from innovation management researchers to the growing audience looking at user adoption of technological products and services in an international context. The symposium topic is also relevant for researchers interested in firm strategies in a global economy in general. Finally, these papers combine diverse perspectives and thus have the potential to stimulate much discussion.  As such we expect this symposium to be very well attended. For this reason, we will allocate 15 minutes for each presentation, and allow 10 minutes following each presentation for the discussants to discuss the relevant paper. Finally, the co-chairs will open up the discussion to the audience for questions related to the four papers and finish with a general discussion of topics linking into the Marketing, Innovation and Chinese Economy (MICE) network.

SHORT ABSTRACTS

“What Drives Word-of-Mouths? The Role of Product Originality and Usefulness”
Sarit Moldovan (Hebrew University of Jerusalem), Jacob Goldenberg (Hebrew University of Jerusalem), Amitava Chattopadhyay* (INSEAD)

In three studies the authors explore how two dimensions of innovation, namely originality and usefulness, affect word-of-mouth, and hence the adoption of a new product. Interestingly, they found that the combination of high originality and low usefulness leads to high amount of negative WOM, which may hasten product failure. Overall, the results of the three studies suggest that although originality is important to generate the buzz about the product, which may accelerate the diffusion of the product in the market, other factors particularly usefulness are equally important. By linking marketer-controlled variables (i.e. originality and usefulness) to consumers’ intentions to initiate WOM, these studies lay a foundation for marketing strategies that may influence market growth, speed of diffusion of product success.

“As Time Goes By: Warm Intentions and Cold Feet for Really New vs. Incrementally New Products?”
David Alexander (Duke University), John G. Lynch, jr. (Duke University) and Qing Wang* (Warwick University)

Combining prior theory about really-new products with temporal construal theory, we examine how differences in how consumers think about really-new products (RNPs) and incrementally-new products (INPs) affect consumers’ formation of long-term product-purchase intentions and affect the likelihood that consumers follow through on those intentions. In four field studies, we find that consumers form fewer long-term purchase intentions for RNPs than for INPs. They follow through on those intentions less often for RNPs than INPs and this difference in follow-through grows stronger over time after the measurement of purchase intentions. Consumers declaring intention to purchase INPs are more likely to form implementation intentions than those intending to purchase RNPs. In the week before acquiring RNPs, consumers’ mental representations of the first week of use are abstract, and their expectations of the actual extent of use are miscalibrated compared to those about to acquire INPs. We discuss the implications of these findings for the launch of really-new products and for market research on really-new products. 

“Consumer Learning Processes for Really New Products”
Veronica Wong* (Aston University), Stephanie Feiereisen (Aston University), Amanda Broderick (Aston University)

The development of RNPs is crucial for many companies. However, only 60% of RNPs survive the launch stage. The primary purpose of this study is to contribute to a better understanding of consumer information processing and learning outcomes for RNPs. We conduct a study using experiments to test hypotheses relating to the impact of alternative stimuli on learning and attitude towards RNPs. The results demonstrate differences in learning and attitudinal outcomes that may be attributed to differences in learning processes. In addition, the use of the eye-tracking device helps us shed light on the qualitative nature of information processing for RNPs. The key managerial implication of this research is to help accelerate the pace of adoption of RNPs by designing more effective communications that assist consumers’ learning processes that yield positive responses to these innovations.

“Radical Innovation in Firms Across Nations”
Gerard J. Tellis (University of Southern California), Jaideep C. Prabhu* (Imperial College) and Rajesh K. Chandy (University of Minnesota)

Radical innovation is an important driver of the growth, success, and wealth of firms and nations. Because of its importance, authors in a variety of disciplines and time periods have addressed this topic. They have proposed many hypotheses about the drivers of innovation in firms across nations, including factors such as religion, distance from the equator, number of scientists and engineers, country culture, intellectual property protection, patents, R&D, and firm culture. The authors test these hypotheses across 759 firms drawn from 17 different countries. Results contradict many prior assertions about the drivers of innovation. Results also suggest that radical innovation is a critical driver of financial performance in firms across nations.

BRIEF C.V.s OF THE PARTICIPANTS

Symposium chairs (and presenters):

Qing Wang, Associate Professor of Marketing, Warwick Business School, University of Warwick, UK.

Dr Qing Wang has a B.Sc. Engineering degree from Xian University of Technology and a PhD from University of Warwick. She was Visiting Professor at Fuqua School of Business, Duke University (2004-05), Visiting Professor at Tsinghua Economics and Management School, Tsinghua University (2002-07) and Visiting Fellow at SPRU, Sussex University (2001-02). Dr Qing Wang’s research interests are in consumer adoption of really new products; interface between R&D and marketing; co-evolution of firm's innovative capabilities and user capabilities. She has published in journals including Journal of Marketing Research, Research Policy, Structural Change and Economic Dynamics and Journal of Marketing Management. She is a fellow of the Royal Society of Medicine in the UK and an academic member of the Marketing Science Institute in the U.S. She has research links with CBS Television Network, IMI Vision, Oxford Analytica, Lenovo and Lanpo Communications in the US, UK, and China.

Jaideep Prabhu, Professor of Marketing, Tanaka Business School, Imperial College, UK.

Jaideep Prabhu has a BTech degree from the Indian Institute of Technology, New Delhi, and a PhD from the University of Southern California. Prior to joining the Tanaka Business School, he was University Senior Lecturer in Marketing, the Judge Institute of Management, University of Cambridge (1999-2004), Assistant Professor and Fellow at the Centre for Economic Research, Tilburg University, the Netherlands (1996-1999), and Visiting Assistant Professor at the Anderson School of Management, UCLA (1995-1996). Professor Prabhu's main research interests are in marketing strategy in high-technology contexts. He is on the editorial board of the Journal of Marketing, Journal of the Academy of Marketing Science and Journal of Management Studies and has published in the Journal of Marketing Research, Journal of Marketing, International Journal of Research in Marketing, Marketing Letters and Journal of Behavioral Decision Making among others. He has consulted for the UK Government's Department of Trade and Industry and numerous high-technology companies in the US, UK, Netherlands, Germany, Switzerland, Portugal and Colombia.

Presenters:

Amitava Chattopadhyay, The L'Oreal Chaired Professor in Marketing-Innovation and Creativity at INSEAD, Singapore.

Professor Amitava Chattopadhyay holds a PhD from the University of Florida, a PGDM from the Indian Institute of Management, Ahmedabad, and a BSc (Honours) degree from Jadavpur University, India. Prior to joining INSEAD, he has been a faculty member at The University of British Columbia, Canada and McGill University, Canada. His research has focused primarily on branding and marketing communications. He has also written about creativity and its role in the success of the new product development process. Professor Chattopadhyay's work has appeared in several journals including the Journal of Marketing Research, Journal of Consumer Research, Journal of Marketing, Marketing Science and Management Science. He is on the editorial review boards of the Journal of Consumer Research, International Journal of Research in Marketing, Journal of Consumer Psychology, and Journal of International Business Studies, among others. Professor Chattopadhyay is on the board of directors/advisory boards of several organizations and a consultant to several multinational firms.

Veronica Wong, Professor of Marketing at Aston Business School, Aston University

Professor Veronica Wong (BSc Pharmacology, MBA [Bradford]; PhD [Manchester]) is Head of the Marketing Group, Aston Business School. She is an elected member of the Academy of Social Sciences, a Member of the ESRC Virtual Research College (2002-06), and ex officio member of the Chartered Institute of Marketing Academic Senate (2000-03). She was Chair of the Doctoral Colloquium (2002-03) and Vice-President, Conferences (2003-06), of the European Marketing Academy Executive (EMAC). She is also a Fellow of the Royal Society for the encouragement of Arts, Manufactures & Commerce (RSA).  Professor Wong's research interests are in marketing strategy, product management and global new product development and launch, with particular emphasis on high-technology sectors. She is a consulting editor for the International Journal of Management Reviews and an editorial board member of the Journal of Marketing Management and the International Journal of New Product Development and Innovation Management. She has published in Journal of Product Innovation Management, Journal of International Business Studies, Journal of Marketing Management, British Journal of Management, Industrial Marketing Management, among others. Professor Veronica Wong has consulted to companies and government bodies including: Singapore Airlines, BT, Kodak, Bausch and Lomb, Lucas Aerospace, Rover Group, Nestle, Cadbury's, Fidelity, Jaguar, Johnson & Johnson (Hong Kong), CYDSA (Mexico), Guinness/Diageo, Virgin Finance, 3M and the DTI

Discussants:

Simon Collinson, Professor of International Business, Warwick Business School, University of Warwick, UK.

Prof. Simon Collinson is currently the Lead Ghoshal Fellow in the ESRC/EPSRC-funded Advanced Institute of Management (AIM). He was previously Associate Dean (MBA) at WBS, visiting researcher at the National Institute of Science and Technology Policy (NISTEP) in Tokyo, Australia Graduate School of Management in Sydney and visiting professor at the Kelley School of Business in Indiana, and Assistant Director of the Japanese-European Technology Studies (JETS) Institute at Edinburgh University Management School. Prof. Collinson has been awarded research funding from ESRC, the DTI Industrial Competitiveness Unit, the Royal Society and DGXII of the CEC. His research interests include: comparative organisation studies; the limits to the internationalisation process; the global organisation of R&D; international joint ventures, knowledge and technology management; international entrepreneurship; business infrastructures and management practices in Japan and China. He has published in Technology Analysis and Strategic Management, R&D Management, European Management Journal, International Journal of Technology Management, Organizational Dynamics, Management International Review and International Journal of Innovation Management. Dr Collinson has had consulting and executive teaching experience with firms such as British Aerospace, Corus, Diageo HSBC, ICI, Nippon Steel, Philips, Prudential, Sony.

Robin Wensley, Professor of Policy & Marketing, Warwick Business School, University of Warwick, UK.

Professor Robin Wensley worked previously with RHM Foods and Tube Investments, and the London Business School. He was Chair of Warwick Business School between 1989 and 1994, Chair of Warwick Faculty of Social Studies between 1996 and1998 and Deputy Dean of Warwick Business School between 2000 and 2004. Professor Wensley was Visiting Professor at UCLA (twice) and University of Florida. He was Member of the ESRC Grants Board between 1992 and 1996 and ERSC Council between 2001 and 2004. He was Co-editor of Journal of Management Studies between1999 and 2003 and published in Journal of Marketing, International Journal of Research in Marketing, Journal of Business Research, and British Journal of Management among others. Professor Wensley is Chair of the Council of the Tavistock Institute of Human Relations 2000-03, and currently Director of the Advanced Institute of Management Research (AIM).