Brand innovation can also stem from pricing and brand associations
In her doctoral thesis, Wuraola Falana examines consumers’ perceptions of brands when brands launch unconventional innovations wherein the newness is not in the functional or design features of the product or service.
The dilemma in growing a brand is how to attract new customers without the brand losing the favorability of their current customers.
“To solve this dilemma, I examined the idea of non-customer innovation as a type of unconventional innovation, through for example introducing tiered pricing to attract non-customers of a product category such as on-demand video streaming service and innovating wine preservation system to preserve soda or carbonated drinks,” says Falana.
Her research finds that current customers of the product category perceive the brand thoughtful for introducing non-customer innovation, even though the non-customer innovations are not useful for current customers of the product category.
Another unconventional innovation examined by Falana in her research is Janus-fit brand extension. For instance, a brand extension with approximately five associations of the brand that fit consumers’ perception of the brand and approximately five associations of the brand that do not fit consumers’ perception of the brand is a Janus-fit brand extension.
The product category, price, functional benefits, brand logo visibility, and target users of such brand extension could fit consumers’ perception of the brand while key function, points of purchase/purchase channel, key component, use situation, and geographical origin for such brand extension would not fit consumers’ perception of the brand.
Compared to other types of brand extensions, consumers are optimally surprised by Janus-fit brand extensions and therefore, positively impact consumers’ perception of brand innovativeness image.
“This is because consumers perceive newness in the brand extension because of the associations that do not fit the brand but at the same time could reconcile the brand extension with what they associate with the brand in their minds because of the associations that fit the brand
“Too little or excessive surprise feeling elicited by new products by brands is detrimental to the innovativeness image of the brand”, Falana explains.
Falana’s research also considered subscription-based pricing as unconventional innovation
“I found that consumers do not have favorable attitude towards brands that offer only automatic renewal subscription even at high price discount, because they feel they lack power over their purchases. To make price discount effective for automatic renewal subscriptions, brands should offer consumers to choose how they want their subscriptions to be renewed, either automatically or with consumers’ consent, Falana states.
According to Wuraola Falana, a focus on innovation usefulness is in most cases important for the success of any innovation but not sufficient for brands that want to be competitive in the marketplace as consumers evaluate innovations from other perspectives apart from its usefulness.
“Consumers want innovations by brands to optimally surprise them, make them think of brands as thoughtful, and make them feel powerful in their relationship with brands”, she summaries
You can read the whole thesis here: : Brand spillover effects of unconventional innovations
Wuraola Falana will defend her thesis on 6 September, at 14.00 in Hanken School of Economics, Arkadiankatu 22, Helsinki.
Opponent: Assistant professor Jenni Sipilä, LUT Business School, Finland.
Custos: Professor Jaakko Aspara, Svenska handelshögskolan, Finland.
The doctoral defence will be held as hybrid. Participants can attend on site or via videoconference.
Access the video conference via the link: https://go.hanken.fi/defence-falana
More information:
Wuraola Falana
E-post: wuraola.falana@hanken.fi