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The role of defaults in preventing innovation rejection
Abstract
Innovation rejection remains a serious problem for companies introducing new products, as customers may overvalue products they already own and underestimate the innovation's advantage. Choice data from two experiments demonstrate that innovation rejection is determined by (dis)satisfaction with the status quo and that defaults are powerful instruments to overcome the status quo effect in innovation decision making. Innovation rejection decreases significantly if the innovation is implemented as a default, an option customers select unless they actively opt out. Furthermore, it is observed that implementing the innovation as the default significantly increases the perceived value and decreases the perceived risk of the innovation. Taking into account customer expertise, the authors detect that defaults are more effective in reducing innovation rejection for novices. The study derives managerial implications for new product launch management that aims at preventing innovation rejection.
... However, only a few studies have been focusing on designing the decision processes behind resistance behavior such that adoption is more likely (Kuester et al., 2015;Hess, 2009;Constantiou, 2009). This thesis addresses several areas concerning innovation resistance and individual differences in judgment and decision making. ...
... In addition, this work aims to shed light into to the effect of demographical variables on the occurrence of cognitive biases, especially in innovation decisions. Early works on marketing strategies to overcome barriers in innovation decisions provide promising results which serve as foundation for research on (digital) nudging as method to promote innovation adoption Kuester et al., 2015;Hess, 2009). Since these studies only partly consider the personality as causer of innovation resistance, this work explores the existence of personality-induced resistance as causer of negative innovation adoption behavior. ...
... Nudging elements have also been applied in the innovation decision context in an experimental study by Kuester et al. (2015). The publication emerged from the findings of the dissertation of Hess (2009) (2004) Hess ( Heidenreich and Kraemer (2016) This work not covered partially covered covered from an experimental study provide evidence that mental simulation reduces cognitive passive resistance while it has no effect on situational passive resistance (i.e. ...
Each year a countless number of new products and services is launched to the market. Whether an innovation becomes a market success is deter- mined by numerous factors, one of them being the decision making behav- ior of consumers when it comes to adopting the innovation (Buder et al., 2016). Human decision making often deviates from normative standards of the rational homo oeconomicus. So far, an extensive body of research has in- vestigated heuristics and biases in judgment and decision making that help us to deal with the tremendous amount of information in daily life (Shah and Oppenheimer, 2008; Kahneman, 2003). However, by using heuristic thinking processes individuals are likely to fall victim to unconscious bi- ases in their decision making resulting in inferior choices (Kahneman et al., 1991). Innovation decisions are one of such cases where individuals are prone to biased decision making. Consumers irrationally overrate the prod- ucts and services they already use three times over those that are new to them and also resist innovations which are evidently superior to incum- bent products or services (Gourville, 2006; Woodside, 1996). Understand- ing and overcoming such biases in innovation decisions is therefor of high relevance for companies to stay sustainably innovative and successful. The scope of this thesis was to obtain an understanding of cognitive processes and decision making mechanisms behind consumer innovation resistance behavior and to explore how the design of innovation choice settings can reduce the effect of negative cognitive biases in innovation decision making (cognitive innovation resistance). In the course of the thesis, the concept of cognitive innovation resistance as form of irrational and negatively biased judgment of innovations has been introduced and its effect on innovation decision making investigated in three experimental studies in the product and service context. With a particular focus on the application case of e-car rental services, the work at hand tested the effect of three digital nudging mechanisms on cognitive biases in innovation decisions. Specifically, it was explored how designing the choice environment by setting the innovation on default, providing feedback on choice consequences and priming the de- cision maker for the innovation reduces the effect of cognitive innovation resistance such that pro-innovation choice is more probable.
... Making the new action option the default choice may reduce the negative perception of potential regret, since the option is perceived as the recommendation (Baron & Ritov, 1994;Nicolle et al., 2011). Also, Kuester, Hess, and Herrmann (2015) and Hess (2009) provided empirical evidence for the effectiveness of defaults to prevent innovation rejection. We investigate digital defaults' effects on innovation adoption and on cognitive resistance. ...
... We then integrated the feedback into the experiment's design. We sought to avoid testing the hypotheses in the context of electronic consumer products, as done by Heidenreich, Kraemer, and Handrich (2016), , Kuester et al. (2015), Heidenreich and Handrich (2015), Heidenreich and Spieth (2013), and Hess (2009), since we seek to add value by providing insights into established theories' applicability to different innovative products or services. As suggested by Claudy, Garcia, and O'Driscoll (2014), we focused on the application case of service innovations on the one hand and on electric vehicles (e-cars) as sustainable innovation on the other hand, since innovation research has provided little insight to these areas. ...
... In the default treatment, the likelihood of adoption could be increased by a factor of 3.7, while in the feedback treatment, the factor was even higher (4.6). Thus, our research extended Kuester et al.'s (2015) work by testing the default tool in a different innovation choice setting. It also contributed to the research of Heidenreich and Kraemer (2015) and into passive resistance to innovation by providing insights into the cognitive nature of resistance to innovation and how to address it with various nudging tools. ...
Consumers often resist adopting innovations, even in cases where they acknowledge that these would be beneficial for them. Cognitive biases in consumers’ decision-making may trigger resistance to innovation. We explore cognitive biases’ effects in innovation adoption decisions. Further, we investigate how digital nudging can be used to mitigate this in order to increase the adoption likelihood for an innovation. We build a set of hypotheses and test them in a quasi-field experiment with 821 participants. We first show that the occurrence of cognitive biases correlates with an up to 44% lower likelihood of adopting an innovation. Second, we find that digital nudging can partially overcome resistance to innovation and can increase the innovation adoption likelihood. Our findings contribute to theory by explaining how resistance to innovation is built from a cognitive perspective and how nudging can be used to increase innovation adoption.
... Nudging elements have also been applied in the innovation decision context in an experimental study in [69]. Innovation rejection was decreased when the innovation was set as default. ...
... So-called "innovation novices" in particular relied on default settings. One limitation of the study, however, is the incremental type of innovation used (USB cell for recharging mobile devices), which led the authors to call for a replication of their results in more complex innovation contexts [69]. In addition, only status quo satisfaction was considered as determinant for innovation resistance. ...
... Existing studies on innovation resistance are often limited to the fact that they test consumer resistance with simple and small innovations such as a USB cells [69] or mobile phones with an innovative battery technology [28]. Complex innovations usually require higher consumer commitment in terms of financial involvement or changes in habits and routines. ...
When innovative products and services are launched to the market, many consumers initially resist adopting them, even if the innovation is likely to enhance their life quality. Explanations for this behavior can also be found in specific personality traits and in general pitfalls of human decision-making. We believe that decision support systems (DSS) can help alleviate such innovation resistance. We propose a DSS design that addresses innovation resistance to complex innovations on an individual’s cognitive level. An experimental study will be conducted to test the influence of different DSS modifications on the perception and selection of complex innovations. We aim to identify levers for reducing innovation resistance and to derive DSS design implications.
... As already noted by Meuter et al. (2005), companies are increasingly aware that the most prominent obstacle is to get consumers to try the innovation by overcoming adoption barriers (e.g., Heidenreich et al., 2022;Talke and Hultnik, 2010). Hence, knowledge on potential barriers in the adoption process that trigger each type of rejection is needed to design appropriate countermeasures for temporary and continuous rejection behaviours (Heidenreich et al., 2022;Kuester et al., 2015b;Bauer et al., 2021;Roper and Bourke, 2022). Based on this knowledge, strategies can be developed to reduce corresponding barriers of both temporary and continuous rejections, thereby minimising the risk of innovation failures and misallocating resources. ...
Little research effort has been dedicated to investigate the nature and determinants of and the differences between temporary and continuous consumer rejections of innovations. To shed light on both types of consumer rejection behaviours and their underlying psychological processes, this paper applies a mixed-method approach. First, we conducted a qualitative study to investigate whether known determinants comprehensively cover reasons for both types of consumer rejections. Based on the qualitative study’s evidence, we introduce a new type of innovation resistance (transactional innovation resistance) to complement the well-known concepts of active and passive innovation resistance as drivers of rejection behaviour. Second, we validated the derived framework using a large-scale quantitative study to empirically determine each determinant’s relative importance for temporary and continuous consumer rejection of innovations. Our results demonstrate that consumers who continuously reject an innovation are primarily driven by a combinatory effect of passive and active innovation resistance. In contrast, consumers who only temporarily reject are largely motivated by a combinatory effect of transactional and active innovation resistance.
... So far, research in business and management has only started to investigate nudging (Rauscher & Zielke, 2019). Such studies have focused on the use of nudging for steering customers' innovation adoption decisions (e.g., Baron & Ritov, 1994;Goldstein et al., 2008;Kuester et al., 2015;Stryja & Satzger, 2019). To the best of our knowledge, research investigating nudging in the corporate context, particularly innovation management, has only touched the nudging concept slightly (see for an example Garud et al., 2011) and is rather an emerging topic at scientific conferences (Rigtering & Weitzel, 2017;Ruehle, 2019). ...
Engaging employees to contribute to corporate innovation is vital for the future success of companies. In particular, incumbent companies face severe barriers in involving employees from various organizational locations. Long-term employments, highly specified organizational units, and hierarchical management structures are designed to preserve the status quo rather than promoting transformational changes. Thus, such companies often struggle with engaging their employees constantly and breaking down three kinds of innovation barriers: limited meaning, allowance, and/or capability.
In this paper, we present innovation nudging as a novel approach, aiming to overcome the limitations of traditional corporate innovation management approaches. Such approaches largely pretend how employees should behave. Since such approaches are not part of employees’ common behavior, prior research has well explored the limits of such approaches. In contrast, nudging addresses subtly persons’ cognition by presenting rewarding behavior options in a way that individuals can easily deal with.
Based on a 3-year observation of the introduction of innovation nudging at a leading German manufacturer of pumps, our results answer how different nudging types can be systematically used to create innovation engagement and to propel transformations in incumbent companies. Practical implications as well as avenues for future research are discussed.
... A significant diffusion barrier is customers' rejection of the innovation, which may occur even when the new product outperforms its existing competitors (Gourville, 2006). Firms can overcome this barrier by launching the new product as the default option, with an opt-out alternative that customers can actively select (Kuester et al., 2015). Given these findings, we hypothesize that: ...
Theory underlines the role of new product development for company survival and success. However, the success rates of new products launches are always at underwhelming levels. Practical wisdom shows that new product performance is the outcome of both controllable, internal factors and external, uncontrollable factors. The authors contrast the role of product category lifecycle as an external factor and of marketing capabilities as an internal factor, to find the balance between these two determinants. To the best of our knowledge, this is the first study to compare the impact of both types of factors on launch proficiency and further product growth. We apply PLS-SEM on a sample of 213 Mexican firms to test a theoretical model grounded on resource-advantage theory and strategic choice theory. Results show that both determinants are significant, but marketing capabilities exert a much stronger influence on new product performance. The relationship between marketing capabilities and unique product performance is mediated by marketing program planning. In contrast, the relationship between product category lifecycle and new product performance is mediated by launch proficiency. In this context, marketing program planning efficiency represents the mid-term and long-term quality of strategic marketing. At the same time, the overall launch proficiency reflects the short-term ability of the company to launch new products. From the perspective of strategic choice theory, the results of our study reinforce the importance of a successful launch for the short-term and mid-term new product performance. Besides, our empirical research finds that product category lifecycle strengthens the positive relationship between marketing program planning and unique product performance. This makes marketing program planning more critical for new product performance as the product category matures. From a managerial standpoint, our findings dismiss the uncontrollable market forces as the main reason for new product failures. We show that new product failures are most often caused by the marketing manager's inability to devise an appropriate marketing plan. The paper also contributes to the literature of resource-advantage theory by providing compelling evidence regarding the foremost importance of marketing capabilities for new product success. Our findings also emphasize the essential role of launch proficiency in further product success, as it is difficult to recover from an early product failure. In practical terms, managers are advised not to postpone new product launches under the «bad timing» argument.
... Research Potential 3 -"Early Stages": The majority of articles that, to some extent, utilize innovation adoption theory examine individuals' intentions (Lee, Park, Chung, & Blakeney, 2012;Parry, Kawakami, & Kishiya, 2012;Schreier, Fuchs, & Dahl, 2012;Talke & Snelders, 2013) and behaviors (Kuester, Hess, & Herrmann, 2015;Labrecque, Wood, Neal, & Harrington, 2016;Müller-Stewens, Schlager, Häubl, & Herrmann, 2017;Stock & Schulz, 2015). Following Rogers' (2003) initial processual proposal, intentional and behavioral outcomes are, regardless of the general nature (positive or negative), associated with the mid-(e.g., decision stage) and later-stages (implementation and confirmation stage) of the innovation decision process. ...
... Besides these limitations of our study the results contribute to theory by extending the understanding of the working mechanisms of the relatively new concept of digital nudging by applying it to the case of online innovation trial decision-making. Results indicate the power of defaults also in such decision scenarios and thus contribute to innovation resistance theory in particular by complementing the work of Kuester et al. (2015) in a digital choice setting and with a sustainable and more complex innovation. By combining the disciplines of innovation resistance theory and choice architecture, further insight on the effect of choice design as alleviating instrument for personality traits like dispositional resistance to change is provided. ...
The concept of sustainability has been acknowledged as one of the central and most important issues of our time. However, technological innovations which provide a more sustainable way of living, for instance elec- tric cars, are not always welcomed with open arms by consumers but often resisted at the beginning. As such, human resistance behavior can be explained as an interplay of different personality traits that favour the status quo. In this study, a decision support system design is introduced which bases on the concept of digital nudging that addresses innovation resistance on an individual’s cognitive level by de-biasing innovation trial decision-making. An experimental pre-study is conducted to test the influence of different DSS modifications on the selection of electric cars in an online rental car booking scenario. First results show that DSS which set sustainable innovations as default option have a significantly positive effect on their trial probability while priming consumers towards electric car trial has no significant effect.
Automated products that take over tasks that consumers used to carry out themselves are becoming increasingly sophisticated, but consumers continue to resist such innovations. Drawing on the status quo bias as a theoretical framework, this article investigates the role of nostalgia in consumer reactions to product automation in a series of six experiments with almost 1,500 participants. The first four experiments converge on a consistent finding: a high (vs. low) degree of automation reduces consumers’ nostalgic feelings about past consumption episodes, which in turn decreases nostalgia‐prone consumers’ product evaluations. Against this backdrop, we conduct two additional experiments to determine how firms’ communication tactics can overcome the negative role of nostalgia proneness in consumer reactions to automated products. We conclude that managers involved in the marketing of automated products should assess the level of nostalgia in their target groups, and align both their intended positioning for the automated product and the decision to automate critical tasks within the product design that may evoke nostalgic feelings in consumers. Furthermore, when consumers are nostalgia‐prone, managers should craft their launch communication tactics such that the focus is diverted from the automated task itself.
Across industries, companies operate open innovation platforms that encourage users to share ideas and become product designers. Likewise, companies explicitly promote products based on user ideas as “user-designed” (e.g., McDonald’s MyBurger, LEGO Ideas). This paper introduces and empirically investigates two managerially relevant factors that can influence the effect of user-designed products on consumers’ reactions. Specifically, Studies 1a and 1b reveal an inverted U-shaped relationship between the share of user-designed products in a company’s product portfolio and consumers’ purchase intentions, which is mediated by consumers’ perceptions of the company’s innovation ability. Study 2 examines the role of the market entry strategy for user-designed products. While the inverted U-shaped effect holds for followers, the relationship between the share of user-designed products and consumers’ purchase intentions becomes U-shaped for first movers. These results suggest that user-designed products can have unexpected consequences that managers need to be aware of and consider in their actions.
In recent years, scholars have devoted increasing attention to the use of methods in new product development. For the first time, we examine particularly the relationship between method application, cross-functional collaboration in new product development and new product success. The analysis of more than 400 new product development projects from 201 different companies shows that applying methods in new product development leads directly to the superior financial performance of the developed product (by reducing product costs, for example) and also leads indirectly to superior cross-functional collaboration during the development project. Both effects are analysed, showing how firms can actively improve on what in some cases are very high failure rates in the development of new products.
When car rental companies sign you up for insurance unless you actively decline it, or software vendors recommend you click "next" for a quick install, they're choosing default options for you - covertly or overtly guiding your choices. Well-designed defaults benefit both company and consumer, simplifying decision making, enhancing customer satisfaction, reducing risk, and driving profitable purchases. Ill-conceived defaults can leave money on the table, fuel consumer backlashes, put customers at risk and trigger lawsuits - costing companies dearly. Despite those high stakes, management pays little attention to default policies. Setting defaults requires companies to balance a complex array of interests, including customers' wishes and the company's desire to maximize profits while minimizing risk. At a basic level, defaults can serve as manufacturer recommendations, and more often than not we're happy with what we get. Most companies also strive to set defaults in ways that align with customers' preferences. In its online auto configurator, for example, Audi preselects silver metallic as the default color because it's the most popular. Of course, defaults can be nefarious as well. They have caused many of us to purchase unwanted extended warranties or to inadvertently subscribe to mailing lists, for example. The authors provide a taxonomy of default types and guidance on when - and when not-to use each type. They range from "benign defaults," representing a company's best guess about which single product configuration would be most acceptable to most customers, to "adaptive defaults" that change depending on individual customers' stated preferences.
This study presents a structural equation test of the interrelationships among ad-induced emotional and cognitive responses, attitude toward the ad (Aad), brand attitudes (Ab), and purchase intentions (PI). Consistent with past research, feelings affect Ab directly and indirectly via Aad Differences between positively and negatively framed print appeals are also examined. Findings indicate that feelings' effects on Ab offer a significant contribution regardless of the ad execution, but brand-related thoughts are more important in brand attitude formation when the message is negatively framed.
The authors report a study of the effects of price, brand, and store information on buyers' perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers' perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects' willingness to buy. The major findings are discussed and directions for future research are suggested.
The authors examine the effects of using a subtractive versus an additive option-framing method on consumers' option choice decisions in three studies. The former option-framing method presents consumers with a fully loaded product and asks them to delete options they do not want. The latter presents them with a base model and asks them to add the options they do want. Combined, the studies support the managerial attractiveness of the subtractive versus the additive option-framing method. Consumers tend to choose more options with a higher total option price when they use subtractive versus additive option framing. This effect holds across different option price levels (Study 1) and product categories of varying price (Study 2). Moreover, this effect is magnified when subjects are asked to anticipate regret from their option choice decisions (Study 2). However, option framing has a different effect on the purchase likelihood of the product category itself, depending on the subject's initial interest in buying within the category. Although subtractive option framing offers strong advantages to managers when product commitment is high, it appears to demotivate category purchase when product commitment is low (Study 3). In addition, the three studies reveal several other findings about the attractiveness of subtractive versus additive option framing from the standpoint of consumers and managers. These findings, in turn, offer interesting public policy and future research implications.
This paper examines adoption of really-new products (RNPs) from a consumer perspective. The unique characteristics of RNPs which differentiate them from other innovative products are examined in relation to the role which these characteristics play in creating barriers to adoption of RNPs. These characteristics in turn affect different stages of the adoption process. Surrogate buyers, acting as agents used by adopters to provide guidance, direction, and/or advice related to marketplace activities, can significantly impact consumer adoption and commercial success of RNPs by minimizing or overcoming barriers related to the stages of the adoption process and characteristics of RNPs.
This research explored the role of anticipated negative feelings in the observed disparity between buying and selling prices for the same endowed object. We assumed that anticipated negative reactions to losses deter people from trading an endowed object and therefore psychological variables that attenuate the emotional response to negative events should further reduce the price disparity between buyers and sellers. In 3 studies, we tested whether factors that either decrease concern about negative feelings (e.g., positive mood, framing of the transaction as involving no action) or increase the anticipated negative reaction to failure to act (e.g., priming errors of omission) further eliminate the disparity between buying and selling prices. These studies provide a novel conceptualization of the endowment bias and, more generally, illustrate the role of anticipated negative feelings in decision making.
In this article, the authors propose that in a multichannel environment, evaluative conflicts (dissynergies) between service channels exist. Building on status quo bias theory, they develop a model that relates offline channel satisfaction to perceptions about a new self-service channel. Data were collected from 639 customers currently using offline investment banking. Results show that offline channel satisfaction reduces the perceived usefulness and enhances the perceived risk of the online channel. These inhibiting effects represent a status quo bias. Trust in the bank shows both adoption-enhancing effects and an adoption-inhibiting effect. Finally, the negative relationship between offline channel satisfaction and perceived usefulness is significantly stronger for men, older people, and less experienced Internet users. This study has both theoretical and managerial relevance as it helps to understand consumer behavior in multichannel environments and provides implications for the design of multichannel service strategies.
Product knowledge has been recognized as an important factor in the research on consumer decision making. It has also been acknowledged that there are different types of knowledge. In this article, we examine the impact of three types of knowledge—subjective knowledge, objective knowledge, and usage experience—on selected aspects of consumer decision making. Effects are examined within the context of an electronic shopping scenario in which subjects selected a VCR brand based on brand and attribute information that could be accessed through a personal computer. Results indicate that, consistent with real-world experience, the three types of knowledge are correlated with each other. However, their effects on attribute importances, information search, and perceived decision outcomes vary by level and type of knowledge. We discuss these effects and their implications for future research.
Perceived equity is a key psychological reaction to the value that a service company provides. Yet equity research has focused on a customer’s satisfaction with relatively well-defined service episodes or transactions. The authors argue and show that equity plays a very different role in affecting customer loyalty as one moves from transaction-specific to cumulative evaluations. Whereas equity is an important driver of transaction-specific satisfaction, equity is more of a postsatisfaction evaluation when modeling cumulative satisfaction. The research also demonstrates the superiority of cumulative evaluations toward explaining service loyalty and providing a balanced view of loyalty drivers. The results have important implications for how equity, satisfaction, and loyalty are modeled and managed in a service context.
Despite the claim that satisfaction ratings are linked to repurchase behavior, few attempts can be found that relate satisfaction ratings to actual repurchase behavior. This article fills this void by presenting a conceptual model for relating satisfaction ratings and repurchase behavior. The model is based on the premise that ratings observed in a typical customer satisfaction survey are error-prone measures of the customer's true satisfaction, and they may vary systematically on the basis of consumer characteristics. The authors apply the model to a large-scale study of 100,040 automotive customers. Results show that consumers with different characteristics have different thresholds such that, at the same level of rated satisfaction, repurchase rates are systematically different among different customer groups. The authors also find that the nature and extent of response bias in satisfaction ratings varies by customer characteristics. In one group, the response bias is so high that rated satisfaction is completely uncorrelated to repurchase behavior (r = 0). Furthermore, the authors find that, though nonlinear, the functional form relating rated satisfaction to repurchase intent is different from the one relating it to repurchase behavior. Although the functional form exhibits decreasing returns in the case of repurchase intent, it exhibits monotonically increasing returns in the case of repurchase behavior.
Consumers often must choose between a course of action that preserves the status quo and a course of action that is a departure from the status quo. This research demonstrates that preference for the status quo is a function of goal orientation and, in particular, that it tends to be more pronounced for prevention-focused than for promotion-focused consumers. The preference for the status quo was examined on two dimensions: preference for the status quo alternative and preference for inaction over action. In this context, it is shown that the impact of goal orientation on the preference for the status quo can occur independently of loss aversion - a finding consistent with the notion that goal orientation might impact choice by virtue of motivational factors such as self-regulation of anticipated regret.
Differences in opt-in and opt-out responses are an important element of the current public debate concerning on-line privacy and more generally for permission marketing. We explored the issue empirically. Using two on-line experiments we show that the default has a major role in determining revealed preferences for further contact with a Web site. We then explore the origins of these differences showing that both framing and defaults have separate and additive effects in affecting the construction of preferences.
Technological innovation is seen as the key to survival and success for many firms. Whether intended for internal use or for
customers, adoption decisions must consider the response of the final user to such technological alternatives. This paper
argues for greater attention to the factors which cause individual resistance to technological innovations. The results of
two studies are reported which examined the effects of self-efficacy (Bandura 1977) and performance satisfaction on consumers’
response to technological changes. Results indicate that a person’s perceived ability to use a product successfully affects
their evaluative and behavioral response to the product. In addition, the level of satisfaction experienced with an existing
behavior increases resistance to and reduces likelihood of adopting an alternative.
The authors report results from four experiments that describe the influence of incidental affect on preference for the status
quo. The first and second experiments, each using different affect induction methods, demonstrated that positive affect increased
and negative affect reduced the choice of the status quo alternative. The third experiment replicated the effect of incidental
affect on a separate dimension of status quo bias, the preference of omission. The last experiment investigated whether preference
for the status quo was affected by four specific emotions that differed along valence and certainty appraisal dimensions.
Compared with affective states associated with uncertainty, affective states associated with certainty led to a greater magnitude
of status quo bias. The certainty appraisals mediated the effect of specific emotions on preference for the status quo, regardless
of the emotion valence. The findings extend our knowledge by showing that incidental affect can influence consumer choice
through emotion-related appraisals.
Consumer knowledge is important both to theoretical models of consumer behavior and to marketing practice. There are three distinct but related ways in which consumer knowledge is conceptualized and measured: objective knowledge, subjective knowledge, and experience. This paper describes the development and validation of a short, reliable, and valid self-report measure of subjective knowledge that is applicable to a variety of data collection methods and subject areas. It can be used to test consumer theories and in practical applications. Multiple studies using data from 1,178 subjects show that the scale is unidimensional, internally consistent, valid, free from methodological confounds, and easy to use.
As more researchers use online panels for studies, the need for standardized rates to evaluate these studies becomes paramount. There are currently many different ways and conflicting terminology used to compute various metrics for online panels. This paper discusses the sparse literature on how to compute response, refusal, and other rates and proposes a set of formulas and a standardized terminology that can be used to calculate and interpret these metrics for online panel studies. A description of and distinction between probability-based and volunteer opt-in panels is made since not all metrics apply to both types. A review of the existing discussion and recommendations, mostly from international organizations, is presented for background and context. In order to propose response and other metrics, the different stages involved in building an online panel are delineated. Metrics associated with these stages contribute to cumulative response rate formulas that can be used to evaluate studies using online probability-based panels. (Only completion rates can be calculated with opt-in panels.) We conclude with a discussion of the meaning of the different metrics proposed and what we think should be reported for which type of panel.
The decision-making literature has consistently reported that decisions to maintain the status quo tend to be regretted less than decisions to change it. We examine the consequences of repeat purchasing (maintaining the status quo) versus switching in the context of information regarding the reason for the decision (e.g., prior consumption episode, brand history), and we argue that there are situations in which repeat purchasing may cause as much or even more regret than switching. We contend that this effect depends on whether or not there is a justifiable basis for the decision. In a series of four studies, we show that if there is sufficient motivation to warrant a switch, consumers will feel less regret in the face of a subsequent negative outcome realized via a switch than in one realized via a repeat purchase. Our results imply that feelings of regret are mitigated when the consumer reflects and concludes that the decision was appropriate under the circumstances. Copyright 2002 by the University of Chicago.
The article develops a model of regret and tests it via four studies. Study 1 develops a multi-item measure of regret and distinguishes it from satisfaction. It also shows that, while satisfaction directly influences both repurchase and complaint intentions, regret directly influences only repurchase intentions, and its effect on complaint intentions is fully mediated via satisfaction. Study 2 examines the antecedents and moderators of regret. It shows that regret is experienced even in the absence of information on a better-foregone outcome. Furthermore, the moderating effect of three situation-specific characteristics (outcome valence, status quo preservation, and reversibility of the outcome) is examined. Studies 3 and 4 examine the cognitive process underlying the experiencing of regret in the absence of information on a better-foregone outcome. Generation of counterfactuals is identified as the cognitive mechanism that engenders regret. Results show that counterfactuals are most likely to be generated when the chosen outcome is negative and not the status quo. Copyright 2000 by the University of Chicago.
This article examines the role of decision ambiguity in judgments that consumers make about an incumbent (the brand a consumer currently uses) versus an attack brand (a new, superior competitor). It is hypothesized that decision ambiguity creates an advantage for the incumbent. A conceptualization of decision ambiguity is offered. In three experiments, factors that can cause decision ambiguity are manipulated and their effects on preference for the incumbent are investigated. The results underscore the role of decision ambiguity in incumbent brand advantage. In two other experiments, boundary conditions are examined. Copyright 1995 by the University of Chicago.
The article discusses how should policy-makers choose defaults regarding organ donors. First, consider that every policy must have a no-action default, and defaults impose physical, cognitive, and, in the case of donation, emotional costs on those who must change their status. Second, note that defaults can lead to two kinds of misclassification, willing donors who are not identified or people who become donors against their wishes. Changes in defaults could increase donations in the United States of additional thousands of donors a year. Because each donor can be used for about three transplants, the consequences are substantial in lives saved.
Should people be considered organ donors after their death unless they request not to be, or should they not be considered donors unless they request to be? Because people tend to stay with the default in a variety of domains, policymakers' choice of default has large and often important effects. In the United States, where the organ-donation policy default is "not a donor," about 5,000 people die every year because there are too few donors. Four experiments examined two domains-being an organ donor and saving for retirement-where default effects occur and have important implications. The results indicate that default effects occur in part because policymakers' attitudes can be revealed through their choice of default, and people perceive the default as indicating the recommended course of action. Policymakers need to be aware of the implicit messages conveyed by their choice of default.
Technological innovation is seen as the key to survival and success for many firms. Whether intended for internal use or for customers, adoption decisions must consider the response of the final user to such technological alternatives. This paper argues for greater attention to the factors which cause individual resistance to technological innovations. The results of two studies are reported which examined the effects of self-efficacy (Bandura 1977) and performance sat isfaction on consumers' response to technological changes. Results indicate that a person's perceived ability to use a product successfully affects their evaluative and behavioral response to the product. In addition, the level of satisfaction experienced with an existing behavior increases resistance to and reduces likelihood of adopting an alternative.
A simplified cognitive model is proposed to assess the dynamic aspect of consumer satisfaction/dissatisfaction in consecutive purchase behavior. Satisfaction is found to have a significant role in mediating intentions and actual behavior for five product classes that were analyzed in the context of a three-stage longitudinal field study. The asymmetric effect found demonstrates that repurchase of a given brand is affected by lagged intention whereas switching behavior is more sensitive to dissatisfaction with brand consumption. An attempt to predict repurchase behavior on the basis of the investigated cognitive variables yielded weak results. However, repurchase predictions were improved when the model was extended to a multipurchase setting in which prior experience with the brand was taken into account.
An important challenge for firms commercializing technology-based new products is to reduce consumers' perceptions of performance uncertainty. We build on prior research in consumer decision making and acceptance of high-technology products and focus on the role of information in influencing perceptions of performance uncertainty of new product interfaces. In contrast to prior literature, we show here that more information is not always better in reducing performance uncertainty. We argue that the effects of more (vs. less) information on the performance uncertainty of a new interface and consumer adoption intentions of the new product are moderated by the degree of newness of the particular functionality (i.e., set of potential benefits) that is delivered by the new product. We report two experiments that investigate this problem and show that more information helps to reduce performance uncertainty only when the product provides a preexisting functionality. However, high levels of information about the new interface actually intensify performance uncertainty when the product delivers a new functionality. We conclude with a discussion of the theoretical and managerial implications of the findings.
The authors investigate whether it is necessary to include disconfirmation as an intervening variable affecting satisfaction as is commonly argued, or whether the effect of disconfirmation is adequately captured by expectation and perceived performance. Further, they model the process for two types of products, a durable and a nondurable good, using experimental procedures in which three levels of expectations and three levels of performance are manipulated for each product in a factorial design. Each subject's perceived expectations, performance evaluations, disconfirmation, and satisfaction are subsequently measured by using multiple measures for each construct. The results suggest the effects are different for the two products. For the nondurable good, the relationships are as typically hypothesized. The results for the durable good are different in important respects. First, neither the disconfirmation experience nor subjects' initial expectations affected subjects' satisfaction with it. Rather, their satisfaction was determined solely by the performance of the durable good. Expectations did combine with performance to affect disconfirmation, though the magnitude of the disconfirmation experience did not translate into an impact on satisfaction. Finally, the direct performance-satisfaction link accounts for most of the variation in satisfaction.
Whereas most academic and industry studies of consumer preferences and decision making involve forced choice (i.e., participants are told to choose one of the presented product or service alternatives), buyers usually also have the option not to select any alternative. An implicit assumption in the experimental practice of forcing choice is that the no-choice option draws proportionately from the various available alternatives, such that the qualitative conclusions are unaffected. However, the authors propose that the no-choice option competes most directly with alternatives that buyers tend to select when they are uncertain about their preferences. Building on this general proposition, the authors show that the introduction of the no-choice option strengthens the attraction effect, weakens the compromise effect, and decreases the relative share of an option that is "average" on all dimensions. They also examine the mechanisms underlying the impact of having the option not to choose and the conditions under which the no-choice option is likely to affect relative option shares. The results are consistent with the notion that the no-choice option provides an alternative way of resolving difficult choices that is not available when subjects are forced to choose. The authors discuss the theoretical and practical implications of this research.
A default option is the choice alternative a consumer receives if he/she does not explicitly specify otherwise. In this article we argue that defaults can invoke a consumer's "marketplace metacognition," his/her social intelligence about marketplace behavior. This metacognitive account of defaults leads to different predictions than accounts based on cognitive limitations or endowment: in particular, it predicts the possibility of negative or "backfire" default effects. In two experiments, we demonstrate that the size and direction of the default effect depend on whether this social intelligence is invoked and how it changes the interpretation of the default.
An important challenge for firms commercializing technology-based new products is to reduce consumers' perceptions of performance uncertainty. We build on prior research in consumer decision making and acceptance of high-technology products and focus on the role of information in influencing perceptions of performance uncertainty of new product interfaces. In contrast to prior literature, we show here that more information is not always better in reducing performance uncertainty. We argue that the effects of more (vs. less) information on the performance uncertainty of a new interface and consumer adoption intentions of the new product are moderated by the degree of newness of the particular functionality (i.e., set of potential benefits) that is delivered by the new product. We report two experiments that investigate this problem and show that more information helps to reduce performance uncertainty only when the product provides a preexisting functionality. However, high levels of information about the new interface actually intensify performance uncertainty when the product delivers a new functionality. We conclude with a discussion of the theoretical and managerial implications of the findings.
Discusses several propositions on the causes and realized strategies that are likely to be found in different industrial marketing-purchasing situations involving rejecting versus accepting superior technological innovations - innovations independently verified to provide superior operating characteristics and lower total costs compared to currently used products and manufacturing processes. Develops a theory of customer rejection of superior manufacturing technologies and product-service innovations as a vehicle for summarizing a set of related propositions explaining such behavior. Reviews suggestions for empirical research to test the theory.
The authors extend consumer satisfaction literature by theoretically and empirically (1) examining the effect of perceived performance using a model first proposed by Churchill and Surprenant, (2) investigating how alternative conceptualizations of comparison standards and disconfirmation capture the satisfaction formation process, and (3) exploring possible multiple comparison processes in satisfaction formation. Results of a laboratory experiment suggest that perceived performance exerts direct significant influence on satisfaction in addition to those influences from expected performance and subjective disconfirmation. Expectation and subjective disconfirmation seem to be the best conceptualizations in capturing satisfaction formation. The results suggest multiple comparison processes in satisfaction formation.
A simplified cognitive model is proposed to assess the dynamic aspect of consumer satisfaction/dissatisfaction in consecutive purchase behavior. Satisfaction is found to have a significant role in mediating intentions and actual behavior for five product classes that were analyzed in the context of a three-stage longitudinal field study. The asymmetric effect found demonstrates that repurchase of a given brand is affected by lagged intention whereas switching behavior is more sensitive to dissatisfaction with brand consumption. An attempt to predict repurchase behavior on the basis of the investigated cognitive variables yielded weak results. However, repurchase predictions were improved when the model was extended to a multipurchase setting in which prior experience with the brand was taken into account.
Examines the construct of perceived risk, as used in consumer and
marketing research. In the light of the shortcomings of past research,
develops and tests three hypotheses. Findings show that the risk
dimensions proposed in the literature (i.e. financial, psychological,
social, performance, physical and time-related risk) capture a very high
fraction of perceived overall risk, and that a parsimonious structure of
the risk concept exists as the other risk dimensions are mediated
through individual psychological risk. Implications are highlighted.
In the last decade, there has been an increasing interest in the link between new product launch strategy and market performance. So far, new product launch research has focused on this performance relationship without giving much attention to background factors that can facilitate or inhibit successful launch strategies. However, investigating such antecedents that set the framework in which different strategic launch decisions enable or prevent the market performance of new products is useful for enhancing the current state of knowledge. Drawing on the concept of a firm's orientation, the present study discusses the influence of the corporate mind-set on new product launch strategy and market performance. It is hypothesized that the capability to successfully launch new products is based on the interplay between a firm's mind-set (i.e., an analytical, risk-taking, and aggressive posture) and its strategic launch decisions on setting launch objectives, selecting target markets, and positioning the new product. A research model with mediating effects is proposed, where the corporate mind-set determines the launch strategy decisions, which in turn impact market performance. The model is tested with data on 113 industrial new products launched in business-to-business markets in Germany using a multiple informant approach. The results support the mediated model as the dimensions of the corporate mind-set have a significant impact on most strategic launch decisions, which in turn significantly contribute to market performance. It is found that while an analytical posture relates to all three strategic launch decisions, risk taking and an aggressive posture have a significant impact on two, respectively one, launch strategy elements. These findings confirm the importance of investigating antecedents for a successful new product launch, as the corporate mind-set serves as a background resource that sets the framework for successful new product launch decisions. In the final section implications for research and managerial practice as well as limitations of this research are provided.
Academic literature is filled with debate on whether product innovativeness positively impacts new product performance (NPP) because of increasing competitive advantage or negatively impacts performance due to consumers' fears of novel technology and resultant resistance to adopt. This study investigates this issue by modeling product innovativeness as a moderator that influences the relationship between communication strategy and new product performance. The authors emphasize that the impact of innovativeness to producers is different from that to consumers and that the differences have strategic impact when commercializing highly innovative products. Product innovativeness is conceptualized as multidimensional, and each dimension is tested separately. Four dimensions of innovativeness are explored—product newness to the firm, market newness to the firm, product superiority to the customer, and adoption difficulty for the customer.
In this study, communication strategy is comprised of preannouncement strategy and advertising strategy. First, the relationship between whether or not a preannouncement is offered and NPP is explored. Then three types of preannouncement messages (customer education, anticipation creation, and market preemption) are investigated. Advertising strategy is characterized by whether the advertisement campaign at the time of launch was based primarily on emotional or functional appeals.
Using empirical results from 284 surveys of product managers, the authors find that the relationship between communication strategy and NPP is moderated by innovativeness, and that the relationships differ not only by degree but also by type of innovativeness. Implications for research and practice are discussed.
The subjects in this study conducted relatively little formal customer research during the early stages of the NPD projects. The methods used for obtaining customer input during the concept generation and exploration stages were primarily qualitative. Although the companies in the study still did not focus consistently on customer issues during the technical development and design stage, the less discontinuous projects did use such traditional quantitative techniques as concept tests, clinics, and experiments during this phase of NPD. Throughout the projects in this study, the real opportunities for obtaining customer input came during the prototype testing and commercialization phases of the NPD projects.
This paper examines the reasons for corporate customers' resistance to adopt industrial service innovations provided by their supplier companies. It is based on work with nine Finnish suppliers of industrial services and their potential customers. We view organizations as networks of individual adopters. We find that organizational sentiment towards adopting an innovation is often ambivalent and that resisting views reveal important drawbacks of an innovation that need to be addressed. The results clarify the effects of utility, cost, emotion and risk aversion in organizational service decisions emphasizing the fit of the service for the customer.
Anand (Anand, P. 1985. Testing regret. Management Sci. 31 114--116.) has suggested that measuring the sacrifice a person is prepared to make to avoid regret may be more difficult than I suggest in Bell (Bell, D. E. 1983. Risk premiums for decision regret. Management Sci. 29 1156--1166.). Though he believes regret is probably widespread, he is concerned that regret may be confounded with other of the psychological phenomena that I have discussed, especially disappointment (Bell [Bell, D. E. 1985. Disappointment in decision making under uncertainty. Harvard Business School Working Paper 83-18, 1982. Oper. Res. (January--February).]). I will use this opportunity for response to set my work in perspective.
Prior research has demonstrated that consumers who take an opportunity and are satisfied (satisfied takers) are likely to
avail of a future opportunity when it is presented again but those who forsake an opportunity and experience regret (regretful
forsakers) are less likely to do so, exhibiting inaction inertia. In this research we demonstrate when and why regret for inaction may result in the intent to avail of a future opportunity and compare this intent with that of satisfied
consumers. Specifically, we demonstrate in two studies that (1) when consumers forgo an opportunity and experience regret,
they are motivated to avail of a similar opportunity when it is presented in the future, and (2) this intent by regretful
forsakers may be more intense than that experienced by satisfied customers due to the elicitation of mental imagery regarding
the anticipated consumption episode.
This article examines some of the effects of product expertise on consumer evaluations of new-product concepts. Consumers with expertise regarding a particular product are expected to be capable of extensive processing of the information on new concepts of that product. Consumers with much product expertise appear to supply more articulated evaluations that are more internally consistent and stable over time than consumers with little product expertise. It is suggested that only those consumers who at least have a moderate level of product expertise should be invited to new-product concept tests.
While many of the factors which help explain the rate and scale of innovative technology adoption have been identified, one important variable (the influence of insider, practitioner-developed versus commercial, externally-developed technology) has been under-explored. Focusing on healthcare in particular, the purpose of this paper is to focus on the insider-innovator/user dynamic. Relevant literature is used to draw-out and examine the prima facie reasons why insider innovator status might enhance, or conversely impede, widespread adoption. From the literature, a model depicting adoption activity pathways and adoption processes is developed. The paper concludes with a research agenda for future empirical study
This article addresses how consumers resolve decisions involving conflict between attributes linked to highly valued goals, such as an automobile purchase decision requiring determination of how much safety one is willing to sacrifice in order to obtain other benefits.,One salient goal for these decisions may be coping with or minimizing the negative emotion generated during decision making. The conceptual framework developed in this article predicts that choosing avoidant options (e.g., the option to maintain the status quo) can satisfy coping goals by minimizing explicit confrontation of negative potential decision consequences and difficult trade-offs. Two experiments demonstrate that reported emotion can be altered by manipulating decision attributes, that the opportunity to choose an avoidant option mitigates levels of reported emotion, and that increasingly emotion-laden decision environments are associated with more choice of avoidant options. Mediation analyses indicate that actual choice of an avoidant option results in less retrospective negative emotion (in experiment I)and that increased initial negative emotion results in increased choice of avoidant options (in experiment 2). Mediation analyses for experiment 2 also indicate that increased response times mediate avoidant choice, in contrast to explanations of the status quo bias and similar choice phenomena that appeal to decision makers' desires to minimize cognitive effort.
This article develops and tests alternative models of market-level expectations, perceived product performance, and customer satisfaction. Market performance expectations are argued to be largely rational in nature yet adaptive to changing market conditions. Customer satisfaction is conceptualized as a cumulative construct that is effected by market expectations and performance perceptions in any given period and is affected by past satisfaction from period to period. An empirical study that supports adaptive market expectations and stable market satisfaction using data from the Swedish Customer Satisfaction Barometer is reported. Copyright 1995 by the University of Chicago.
Two studies are reported that apply diffusion theory to two new consumer products. The research objective in both studies was to discriminate buyers from nonbuyers using the personal characteristics of respondents and their perceptions of each new product and thereby also to assess the relative importance of the predictor variables. In both studies perceptual variables are found far more successful as predictors of the purchase outcome than respondent personal characteristics.
Much experimental evidence indicates that choice depends on the status quo or reference level: changes of reference point often lead to reversals of preference. The authors present a reference-dependent theory of consumer choice, which explains such effects by a deformation of indifference curves about the reference point. The central assumption of the theory is that losses and disadvantages have greater impact on preferences than gains and advantages. Implications of loss aversion for economic behavior are considered. Copyright 1991, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.