Evaluation of incrementally new versus really new products: the moderating role of personal need for structure and the effect of mental simulation

Abstract

Firms are facing a dilemma about product newness when developing a new product. Incrementally New Products (INPs) are the new products with improvements based on the existing products. Thus, developing this new product is less risky for the firm but does not guarantee its sustainable. Really New Products (RNPs) are the new products with novel benefits creating a new category. Thus, developing this new product is riskier but firms may be able to capture substantial market share as a pioneer. The aim of the thesis is to help firms’ decision making regarding this dilemma. Two issues were raised: consumers’ evaluation of INP vs. RNP, and enhancing the evaluation of INP vs. RNP. Regarding the second issue, effect of mental simulation on the evaluation of RNP is specifically examined. 4 studies were conducted and revealed that consumers’ Personal Need for Structure (PNS) plays an important role in both issues. In Studies 1 to 4, PNS moderated consumers’ evaluation of INP vs. RNP. Specifically, the high-PNS consumers evaluated INPs higher than RNPs, whereas the low-PNS consumers evaluated RNPs higher than INPs. Study 2 explored the underlying mechanism of the results from Study 1. It was revealed that PNS moderated schema congruity effect (Mandler 1982; Meyers-Levy and Tybout 1989) to occur in the different levels of product newness, thus affecting the evaluation of INP vs. RNP. In Studies 3 and 4, PNS moderated the effect of process vs. outcome simulation in enhancing the evaluation of RNP. Specifically, process simulation was more effective than outcome simulation for the high-PNS consumers, whereas outcome simulation was more effective than the process simulation for the low-PNS consumers. These findings imply that considering consumers’ PNS may be helpful to firms’ decision making regarding the development and the launch of a new product.