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THE IMPACT OF PRODUCT INNOVATION AND CUSTOMER PARTICIPATION ON BRAND ATTITUDE
Despite the importance of innovation and customer participation for both practitioners and academics, the effects of the integration between innovation and customer participation has rarely been addressed in consumers’ perspectives. Accordingly, the authors first examine separately the impact of the two breakthrough innovation types (technology-based innovation vs. market-based innovation) and two forms of customer participation (as information providers vs. as co-developers) on brand attitude. Following this, the interaction effect between the two variables is also tested. We used a 2x2x2 mixed subjects design. We employed a 2 (breakthrough innovations: T-INNO, M-INNO) x 2 (customer participation: CPI, CPC) between-subjects design for independent variables and the dependent variable had a 2 (brand attitude: pre-brand attitude, post-brand attitude) within-subject design. The hypotheses were tested for a cell phone product category by pretest. Participants were 148 university students from Seoul, Korea. The results show that both breakthrough innovation and customer participation positively influence the brand attitudes held by customers, though neither the two forms of breakthrough innovation nor the two forms of customer participation differ from each other in terms of the strength of this relationship. However, when technology-based innovation is combined with customer participation in the form of co-development, a stronger positive impact on brand attitude is observed than when customers are treated as information providers. Conversely, when market-based innovation is combined with customer participation in the form of information provision, a stronger positive impact on brand attitude is observed than when the customers act as co-developers. These results have a number of theoretical contributions. First, prior innovation research has mostly focused on the impact on firm performance. Even though a few researchers have conducted several studies about the impact of innovation in terms of consumers’ perspectives, they did not consider the specific type of innovation. The present study focuses on comparing the impact of two types of breakthrough innovation based on customers’ perspectives. Second, prior customer participation or co-creation research has mostly looked at the positive impact on performance from both the firm’s and consumer’s perspective. However, they did not consider the specific type of customer participation which can affect differently performance. In this study, the differential impact of each type of customer participation was explored. Third, previous studies have not focused on the interaction effect between two types of innovation and customer participation. We found that the interaction effect can be significant when they are combined together. This study has also managerial implications. First, when firm managers utilize both breakthrough innovation and customer participation strategies, they need to consider the most effective combination of the forms of innovation and participation available. Second, this interaction effect should be considered not only in the innovative product development process but also in the communication activities in their customers. Finally, the limitations and further research directions of this results are discussed.
