Essay details:

  • Subject area(s): Marketing
  • Price: Free download
  • Published on: 14th September 2019
  • File format: Text
  • Number of pages: 2

Text preview of this essay:

This page is a preview - download the full version of this essay above.

The restaurant with the golden arches, the social network, the red big N widget used to stream series and movies, a computer company identified by a particular fruit and many more. Nowadays, these descriptions immediately trigger a response (Holt, 2004). The companies (i.e. McDonald's, Facebook, Netflix and Apple) are global brands operating in highly competitive markets. Their effective pursuance of their business model has led to them being where they are right now. In addition to their leading position in organizational activities, they are also ranked amongst the Forbes World's Most Innovative Companies (Dyer & Gregersen, 2016). One component they all share, is their strong brand equity (Dyer & Gregersen, 2016). However, it should be stated that in this constantly evolving world of innovations and marketing, products and services that were relevant yesterday can no longer be certain of success tomorrow. Holland, Schekleton and Na (2011) found that global brands (e.g., McDonald's, Facebook, Netflix, Apple, etc.) that successfully manage to sustain their products in highly competitive markets are more innovative. Henard and Dacin (2010) found that this is caused by their increased ability to invest in New Product Development (NPD) introductions to meet customers' needs. However, even though many firms devote considerable resources to the development of new products in order to enhance their likelihood of survival in an industry, most innovations brought to the market still fail (Lee & O'Connor, 2003).

In addition to the process of coming up with an innovation and its corresponding level of innovativeness, an important issue marketers face is how to successfully market an innovation. A central finding of previous research is that many new products fail due to a lack customer need fulfillment and a significant relative advantage of the innovation compared to the old product (Montoya-Weiss & Calantone, 1994; Frambach & Schillewaert, 2001). Hence, in order to be successful in bringing innovations to the market, an understanding of the potential factors affecting the innovation adoption process is crucial. Previous research on the adoption and the diffusion of innovations has offered some understanding. Consumer innovation adoption refers to the decision to make use of an innovation, whereas diffusion refers to the accumulated level of users of an innovation in a market (Rogers, 2010). Innovation adoption entails a process of multiple stages through which an individual passes, namely from first awareness to continued use of the innovation (Rogers, 2010). Over the course of this process, a potential adopter establishes perceptions of the characteristics of the innovation followed by a weight based decision-making process (Castaño, Sujan, Kacker & Sujan 2008; Wood & Lynch 2002).

One of the components companies in the World's Most Innovative Companies share, is their strong brand equity and iconic branding (Dyer & Gregersen, 2016). It has become clear that companies that understand the fact that consumers have become more aware and demanding and can adapt to this will be successful regardless of the relation to product design, the use of advertising or the use of a product (Gupta & Lehmann, 2005). Simultaneously, Keller (1993) found that it is important to build a powerful brand. By obtaining a powerful brand, an organization can be aided in gaining differential marketing advantages and simultaneously enhances competitiveness (Hoeffler & Keller, 2003; Keller, 2008). Furthermore, acquiring a powerful brand makes it possible for firms to reinforce their competitive advantages and by doing so obtain various marketing advantages over its competitors, such as the ability to sell services and products at premium prices and maximization of the consumers' demands and needs (Keller, 2008). Therefore, brand management has a crucial role to play in forming a favorable attitude towards an organization (Curtis, Abratt & Minor, 2009). Aaker (2009) formulated his customer based equity dimensions: brand awareness, perceived quality, brand association and brand loyalty and other proprietary assets. The most basic one of these is brand awareness, because if the customers are not aware of the brand, it has no value or equity (Shimp, 2010). Brand awareness is defined as the consumers' abilities to recognize or recall a brand among others which provide similar offerings (Aaker, 2009).

Most of the previous brand equity research has focused on the marketing mix variables such as advertising, price and product quality as contributing factors (Cobb-Walgren, Ruble & Donthu, 1995; Yoo & Donthu, 2001). However, more recent research has stated the importance of another variable affecting the innovation adoption process, namely the Country or Origin (COO) Image.

Hofstede (1980) suggests that the value systems are different from country to country and that in the marketing context, this may be relevant because the significance of brand may vary among people in different countries. It is common that consumers use COO stereotypes to evaluate an innovation, for example ‘German cars are excellent' or ‘Italian pizzas are the best in the world'. Brands from countries that have a favorable image generally find that their NPD's are more easily and readily accepted than those from countries with a less favorable image. (Roth and Diamantoploulos, 2009)

COO is considered as an important variable that influences the perceptions of brands in general (Roth and Diamantopoulos, 2009). Mohd Yasin, Nasser Noor and Mohamad (2007) found that in general, the CoI image is considered as an extrinsic cue that is used to form beliefs and evaluate products. Consequently, these cues influence their purchase behaviors.

Previous literature showed the significant influence of product innovation as a key factor for driving organizational growth and performance (Chimhundu, Hamlin & McNeil, 2010). Surprisingly, only few scholars have examined the empirical link between brand equity, and in particular barnd awareness, and the influence on the outcome of product innovation (Stock, 2011; Milenkov, 2012). Moreover, the link between brand equity in a national culture context and the outcome of innovations has been neglected in the literature. Therefore, this study is conducted in order to contribute to the literature by testing the relationships of the brand equity dimension brand awareness and the type of innovation in the innovation adoption process in a national culture context (i.e. CoI). The research question of study will therefore be:

What is the influence of product innovativeness, brand awareness and the country of origin image (CoI) on consumer innovation adoption?

In an attempt to answer the research question, the following sub questions will be formulated an extensively discussed in the course of this study:

• What is product innovativeness and how does it influence consumer innovation adoption process?

• What is brand awareness and how does it influence consumer innovation adoption?

• What is Country of Origin Image (CoI) and how does it influence consumer innovation adoption?

To accomplish the above set aim, this research offers a brief overview of the literature on the brand equity dimension brand awareness and the types of innovations and its corresponding level of innovativeness that can be distinguished. The focus will then shift to the Country of Origin Image (CoI) of the customer and its potential influence on how customers evaluate New Product Developments (NPD) introductions and its effect on the innovation adoption process. Hypotheses will be developed to assess the possible relationships between the opposed independent variables and the success of innovations. The research ends with drawn conclusions, their theoretical and managerial implications and a discussion.

1. Theory

The following chapter will present and discuss previous literature regarding the key concepts and theories that that are relevant to this study. Firstly, the study outlines the consumer innovation adoption process. Then, the type of innovations and the concept innovativeness will be thoroughly discussed, followed by literature on brand awareness, and Country of Origin Image. Finally, the conceptual model, which subsumes all hypotheses and key constructs, is presented.  

2.1. What is the consumer innovation adoption?

Over the past decades of research in innovation adoption, several theoretical models have been developed to explain consumer innovation adoption, namely: the Theory of Reasoned Action (Fishbein & Ajzen, 1975), the Theory of Planned Behavior (Ajzen, 1985), the Technology Acceptance Model (Davis, 1989), and Rogers' (2010) widely accepted innovation diffusion theory. The majority of these models is based on the assumption that adopter categories predict the innovation adoption. Adopter categories classify members of a social system based on innovativeness and include: innovators, early adopters, early majority, late majority, and laggards. Innovators are open to new ideas and actively seek information about new ideas (Rogers, 2010). They expose themselves to a high degree of mass media and their interpersonal social system is larger than local network. Furthermore, they are able to cope with higher levels of uncertainty and risk than other categories. The measure of innovativeness and the corresponding adopter category is based on the relative time at which an innovation is adopted (Rogers 2010). Ostlund (1974) already concluded that the categories were outdated and suggested that innovation characteristics should be adopted as predictors of innovation adoption. Meuter, Bitner, Ostrom and Brown (2005) have found that the innovation characteristics of the diffusion of innovations paradigm (i.e. relative advantage, compatibility, complexity, trial-ability, observability) have been found to explain rate of adoption better than other characteristics. Rogers (2010) however combines the innovation categories and the innovation characteristics in his diffusion model. Diffusion essentially entails a social process through which people talking to people spread an innovation. It has been found that mass media channels are more effective in creating awareness and knowledge of innovations, since interpersonal channels are found to be more effective in forming and changing an attitude towards a new idea and therefore affects the decision to adopt or reject an innovation (Rogers, 2010).

Rogers (2010, p.20) defines the adoption process as ‘'the process through which and individual (or other decision-making unit) passes from (1) first knowledge of an innovation, to (2) forming an attitude toward the innovation, to (3) a decision to adopt or reject, to (4) implementation of the new idea, and to (5) confirmation of this decision.''

To define adoption behavior, this study makes use of Rogers' (2010) book where adoption behavior is referred to as the (trial) purchase of an innovation.  

The innovation adoption literature distinguishes between characteristics of the adopter and the innovation's perceived innovation characteristics as major drivers of the innovation adoption process (Tornatzky & Klein, 1982; Frambach & Schillewaert, 2002; Rogers, 2010). These variables describe the likelihood that the innovation is adopted by consumers and are simultaneously used to gain knowledge on its spread over the community of subject (Frambach and Schillewaert, 2002). According to Arts et al., (2011, p.135), ‘'adopter characteristics capture the personal traits that describe the (potential) adopter of an innovation, which can be divided into socio-demographics and psychographics.'' Frequently used socio-demographics are consumers' age, level of education, income, gender and family household cycle. Frequently used psychographics are innovativeness, media proneness, price consciousness and brand familiarity (Tornatzky & Klein, 1982; Rogers, 2010). Rogers (2010) defines innovation characteristics as attributes consumers use to evaluate an innovation and identifies consumers' perception of the relative advantage, compatibility, complexity, trial-ability, observability as the most important explanatory variables of consumer innovation adoption. Rogers (2010) finds that innovations that are perceived by individuals as having a greater relative advantage, compatibility, trialability, and observability and less complexity will be adopted more rapidly than other innovations. He furthermore stresses that the attributes' relative advantage and compatibility are particularly important in explaining an innovation's rate of adoption. Hoeffler (2003) (see also: Herzenstein, Posavac &Brakus, 2007) adds uncertainty in relation to innovation as another explanatory variable and Wu and Wang (2005) address the effect perceived risk has on the technology acceptance models.

In line with previous literature's distinction between characteristics of the adopter and the innovation's perceived innovation characteristics as major drivers of the innovation adoption process, the identified antecedents with corresponding definitions (Rogers, 2010; Hoeffler, 2003; Arts et al., 2011) of both concepts will be presented to gain a more thorough understanding of the consumer innovation adoption process. Firstly, antecedents and definitions of innovation characteristics will be presented. Following, the antecedents and definition of the adopter characteristics on consumer innovation adoption will be presented.

Antecedents and definitions of innovation characteristics on consumer innovation adoption:

1. Relative advantage – the degree to which an innovation is perceived as being better than the idea it supersedes

2. Compatibility - the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters

3. Complexity – the degree to which an innovation is perceived as difficult to understand and use.

4. Trialability – the degree to which an innovation may be experiment with on limited basis.

5. Observability – the degree to which the results of an innovation are visible to others.

6. Uncertainty – the degree to which the functional, social, and/or financial consequences of purchasing and using an innovation cannot be established.

Antecedents and definitions of the adopter characteristics on consumer innovation:

1. Age – the age of the (potential) adopter.

2. Education – the level of education a consumer has enjoyed.

3. Income – the income level of the (potential) adopter.

4. Product involvement – the degree to which a consumer experience differentiation, familiarity, importance and commitment for a specified product category, not brand.

5. Innovativeness – the general propensity of a consumer to adopt new products.

6. Opinion leadership – the degree to which and individual is able to influence informally in a desired way with relative frequency.

7. Information seeking – the extent to which one seeks information about innovations.

8. Media proneness – the degree to which an individual is receptive for the media, as well as how often an individual uses certain media.

As stated in the introduction, consumer innovation adoption refers to the decision to make use of an innovation (Rogers, 2010). The extent of this study will be based on this definition from Rogers' (2010) innovation diffusion model, its corresponding definitions and its corresponding predictors of adoption.

1.2. What levels of innovativeness can be distinguished and how do they influence consumer innovation adoption?

Over the past decades, numerous classifications for the types of innovations have been developed. According to Garcia and Calantone (2002) there are 21 empirical studies in the new product development (NPD) literature that model product innovativeness. In these 21 empirical studies, the models used, consist of fifteen constructs and a shocking 51 distinct scale items. Several studies have shown that that there is a lack of conformance in the definition of ‘innovation' (Henard & Szymanski, 2001). Cooper (1998) suggests that the lack of conformance undermines the understanding of the nature of innovation.

Furthermore, there are multiple scholars that have expressed the importance of categorizing innovations into radical and incremental innovations (Song & Montoya-Weiss, 1998).

A comparatively new distinction between disruptive and sustaining technologies adds another option to these classifications and differentiations. It is built upon the radical/incremental dichotomy. Several studies suggest that a merely 10% of all new innovations fall into the category of radical innovations (Garcia & Calantone, 2002). The remaining 90% is covered by incremental innovations (Rothwell & Gardiner, 1988). However, Garcia and Calantone (2002) do not agree with the radical/incremental dichotomy and add a third category: really new innovations.

Adams, Bessant and Phelps (2006) pledge for a general definition that is applicable to different disciplines and covers multiple aspects of innovation. They furthermore stress that this would be beneficial regarding the fact that the term innovation is notoriously ambiguous and lacks a single definition or measure scale. After an extensive literature review Garcia and Calantone (2002) define general innovation as ‘'an iterative process initiated by the perception of a new market and/or new service opportunity for a technology-based invention which leads to development, production, and marketing tasks striving for the commercial success of the invention. ‘' (p. 112).

Smith, Barfield and Dufour (1996) add to this that innovation, in addition to basic and applied research, also consists of product development, marketing, servicing, manufacturing, distribution and product adaption. In the extent of this study, the above quoted definition of innovation will be used to define innovation. Garcia and Calantone (2002) furthermore stress that this overall definition is captured from a study on technological innovations (OECD, 1991) and that it addresses the general distinction that the innovation process consist of the technological development of an invention in combination the introduction of that invention to the market by which it becomes an innovation (Garcia & Calantone, 2002), they state that: ‘'innovativeness is a measure of discontinuity in the status quo in marketing factors and/or technology factors'' (p.118) and that this is applicable to all typologies of innovation (Garcia & Calantone, 2002).  Therefore, in the extent of this research the type of innovation will be assessed based on this statement accordingly.

2.2.1. Product innovativeness

Product innovativeness is concerned with technical and marketing discontinuities (Daneels & Kleinschmidt, 2001; Garcia & Cantalone, 2002). Garcia and Calantone, (2002) state that: ‘'innovativeness is a measure of discontinuity in the status quo in marketing factors and/or technology factors.'' (p.118) and that this is applicable to all typologies of innovation. Therefore, in the extent of this research the type of innovation will be assessed based on this statement accordingly. Garcia and Calantone (2002) established a product innovativeness classification framework that is defined in terms of industry-level technological and market discontinuity. Furthermore, the framework distinguishes between firm-level technical and marketing know-how newness as macro (i.e., industry-level) and micro (i.e., firm-level) incubators of overall product innovativeness.

When assessing innovativeness on a macro level, it is considered innovative when a really new innovation is able to create a paradigm shift in the technology and/or market structure in an industry. When assessing innovativeness on a micro level, it is considered innovative when a new innovation has the capacity to influence the firm's existing marketing resources, technological resources, skills, knowledge, capabilities or strategy (Daneels & Kleinschmidt, 2001; Garcia & Calantone, 2002).  By making a distinction to whom and from whose perspective an innovation should be addressed, the level of newness of an innovation can be measured (Garcia & Calantone, 2002). In the extent of this study, innovativeness will be viewed from the newness to the customer perspective. In defining innovativeness, Kleinschmidt and Cooper (1991) distinguish between three categories, namely: highly, moderately and low innovative products. Highly innovative products consist of new-to-the-world products and innovative new product lines to the company. Moderately innovative products consist of innovative new lines to the firm but not new to the market and new items in existing product lines for the firm. Low innovativeness products consist of all other products. This entails modifications to existing products, redesigns, repositioning and cost reductions (Kleinschmidt and Cooper, 1991)

1.2.2. Consumer innovativeness

1.2.3. Incremental innovation

Incremental innovations

consist of products that have low market and technologi-

cal uncertainty, and include modifications of existing

products, products redesigned to achieve cost reductions,

and repositioning. These classifications are consistent

with the typology offered more recently by Garcia and

Calantone (2002).

Incremental innovations

consist of products that have low market and technologi-

cal uncertainty, and include modifications of existing

products, products redesigned to achieve cost reductions,

and repositioning. These classifications are consistent

with the typology offered more recently by Garcia and

Calantone (2002).

Incremental innovations are considered to provide new features, benefits, or improvements to the existing technology in the existing market (Song & Montoya-Weiss, 1998). Ali (1994) defines incremental products as ‘'product line extensions or modifications of existing products'' (p.48). Furthermore, Garcia and Calantone (2002) stress that ‘'incremental innovations cause either a marketing or technological discontinuity but not both'' (p.120)

Incremental innovation is iterative in nature and functions as constant stimuli for many firms

For the sake of this study, incremental innovation is defined according to the aforementioned definition by Song & Montoya-Weiss (1998)

1.2.4. Really new innovation

In their study, Kleinschmidt and Cooper (1991) distinguish between ‘high', ‘moderate' and ‘low' innovativeness in their innovation classification. The really new innovation class of innovations is comparable to the moderate class and lies in between the radical and incremental innovation typologies. Kleinschmidt and Cooper (1991) define really new products (i.e. moderately innovative products) as ‘'consisting of lines to the firm, but where the products were not as innovative (that is not new to the market) ad new items in existing product lines for the firm'' (p.243). Song and Montoya-Weiss (1998) define really new innovations as ‘'an entirely new product category and/or production system and delivery system. A really new product is one that: (1) relies on technology never used in the industry before; (2) has an impact on or causes significant changes in the whole industry; and (3) is the first of its kind and totally new to the market'' (p.126). This should however be classified as a radical innovation. According to Garcia & Calantone (2002, p.122), ‘'really new innovations are easily identifiable by the criteria that a discontinuity must occur on either a marketing or technological macro basis in combination with a microlevel discontinuity.'' Song & Montoya-Weiss (1998) therefore define a really new innovation as a radical innovation because their definition includes both a discontinuity must occur on a marketing and technological basis. Really new innovations can evolve into new product lines, product line extensions with new technology, or new market with existing technology (Garcia & Calantone, 2002)

2.2.4 Radical Innovation

A radical innovation is defined as an innovation that embodies new technology and results in a new market structure (Song & Montoya-Weiss, 1998). Utterback and Kim (1986) define radical innovation as ‘'change that sweeps away much of a firm's existing investment in technical skills and knowledge, designs, production, technique, and plant and equipment'' (p.114).

In contrast to incremental innovation, radical innovations do not address the recognized customer demand but instead creates an unrecognized customer demand resulting in new industries, competitors, firms, distribution channels and marketing activities. Radical innovations are typically innovations that cause marketing and technological discontinuities.

With radical innovation, customers have no knowledge yet about what behavioral patterns are required for these kinds of new products/services or new applications (Betz, 2003)

Regarding the type of innovation, Garcia & Calantone's (2002) distinction in incremental, really new and radical innovations will apply as a base of this research. When referring to a products innovativeness, Kleinschmidt & Cooper's (1991) typology distinguishing between high, moderate and low innovativeness will apply. Hence, an incremental innovation corresponds to a low level of innovativeness, a really new innovation corresponds to a moderate level of innovativeness and a radical innovation corresponds to a high level of innovativeness.

2.2.5. Level of innovativeness and consumer innovation adoption

Calantone, Chan and Cui (2006) found that although product innovativeness enhances relative advantage, a high level of innovativeness reduces customer familiarity and therefore can be detrimental to innovation adoption. Radical innovations require a greater number of resources and have a higher level of uncertainty and risk (Kotler & Keller, 2012). Risk and uncertainty have been identified as major barriers to adoption (Hoeffler, 2003). Furthermore, radical innovations require consumer engagement and the learning of new capabilities and therefore decreases the likelihood of an innovation being adopted. Cooper and Kleinschmidt (1991) (see also: Philips & Baumgartner, 2002) indicate that less innovative products are more familiar, less uncertain, may result in higher synergies, and therefore have a higher success rate. Lastly, Kock, Gemünden, Salomo and Schultz (2011) conclude that innovations that fit to the existing resource configuration will be more likely to succees. Therefore, the following hypothesis is formulated:

H1: The higher the level of innovativeness, the lower the likelihood of consumer innovation adoption.

1.3. What is brand awareness and how does it influence consumer innovation adoption?

Aaker (2009) distinguished several customer-based brand–equity dimensions of which, according to him, the basic one is brand awareness. Accordingly, Shimp (2010) explains that if a customer is not aware of a brand, it has no value or equity and that even though awareness does not guarantee purchase, it often ensures that the brand of subject is at least on the consumer's short-list.  Furthermore, brand awareness may result in higher perceived quality and commitment, resulting in significant buying behavior accordingly (Aaker, 1991). Keller (2008) defines brand awareness in terms of ‘'being related to the strength of the brand node or trace in memory reflected by consumers' ability to recall or recognize the brand under different conditions ‘' (p.143).

Consumers may use brand awareness as a purchase decision heuristics (Hoyer & Brown 1990; MacDonald & Sharp 2000). Heuristics are simple, efficient rules which people often use to form judgments and make decisions. Hence, it can be said that people use their awareness of the brand in order to make a decision on whether or not to purchase.

Advertising nowadays is a crucial part of marketing. Repetitive advertising is used to keep the brand in the consumer's consideration set. A consumer's consideration set is defined as the set of brands to which a consumer gives serious attention when making a purchase decision (Hoyer & Brown 1990; MacDonald & Sharp 2000). It has been argued that brand awareness has important effects on consumer's decision making. It does so by influencing which brands come into the consideration set. Furthermore, it also influences which brands are selected from the consideration set (Hoyer & Brown 1990; MacDonald & Sharp 2000).

Aaker (1996;2009) distinguishes different levels of brand awareness and concludes that their dimensions involve a continuum ranging from an uncertainty that the consumer is aware of the brand (i.e. unaware of brand) to brand recognition (i.e. XXX) to brand recall (i.e. XXX) to TOMA (i.e. first-named brand in a recall task) to brand dominance (i.e. the only brand recalled) a belief that the brand is the only brand in a particular product class (i.e. top-of-mind awareness or TOMA). Many scholars, however, distinguish two essential levels of brand awareness: stimuli-based brand recognition and memory-based brand recall (Aaker, 2009; Keller, 1993).

2.3.1. Brand recognition

Kotler and Keller (2012) and Shimp (2007) found that recognition is a commonly accepted measure of brand awareness. Keller (2008) defines brand recognition as: ‘'consumers' ability to confirm prior exposure to the brand when given the brand a cue.'' (p.73). Consumer's that are able to correctly discriminate a particular brand, ‘recall' a brand because they have seen it or heard from it before. Recognition will reflect whether consumers are able to recognize a brand as one to which they have already been exposed when faced with a purchase decision. Brand recognition supposedly is more important to the extent that purchase decisions are made in the store and regarding the newness of the brand (Aaker, 2009). In short, brand recognition refers to whether consumers are able to recognize a brand. (Aaker, 2012)

1.3.2. Brand recall

In his book, Keller (2008) defines brand recall in terms of the consumers' ability to retrieve the brand when given a product category, the needs fulfilled by the category, or any other type of probe that might function as a cue. In other words, brand recall refers to whether a consumer is able to recall a certain brand during the decision-making process without the use of any memory aid. Brand recall entails different levels, namely, in addition to brand recall, there is the top-of-mind awareness (i.e. TOMA). When confronted with a recall task, the first named brand in a certain category is called the first named brand. Furthermore, there is the level of brand dominance (a belief that the brand is the only brand in a particular product class)

1.3.3. Brand awareness and consumer innovation adoption

If we are to follow Keller's (2008; also Aaker, 2009) definition of brand awareness, that stresses that favorable brand associations lead to a positive response in the form of purchase intention, it can be concluded that consumers will preferably buy top-of-mind brand in a relevant category and that brand awareness overall has an important role to play in innovation adoption and its success. Brand awareness is considered to be a crucial factor for marketplace success (Keller, 2008).

Hoyer and Brown (1990), and later MacDonald and Sharp (2000), used a controlled peanut butter tasting experiment for their research that dramatically demonstrated the power of a recognized brand. Both their findings show that consumers when faced to choose out of a set of brands in a category with marked awareness differentials (e.g. labels) an overwhelming majority showed a preference for the high awareness brand, despite price and quality differences. In their experiments, they furthermore proved that consumers with high brand awareness made their decisions faster than consumers in a nonawareness state of mind.

Cooper (1998) identified success factors and concluded that the elements of non-product advantage (e.g. brand name awareness) yield positive results. In other words, there is a positive relationship between a company's brand name awareness and the result of an innovation and its adoption. Several studies have supported the association between brand awareness and buyer behavior (Macdonald & Sharp, 2000).

Furthermore, it has been found that strong, favorable and unique brand associations can result in several brand-equity enhancing outcomes (e.g. loyalty, price premiums, more favorable price elasticity, greater communication and channel effectiveness) (Hoeffler & Keller 2003; Keller 2008). Furthermore, Phau and Prendergast (2000) found that increasing awareness yields higher levels of brand preference, which in turn will generate stronger purchase intentions.

Calantone et al. (2006) argue that it even though product innovativeness enhances product advantage, high level of innovativeness reduces awareness (i.e. customer familiarity) and therefore can be can be detrimental to the adoption of an NPD. Therefore, they stress that a higher level of brand awareness, will lead to a higher rate of innovation adoption since customers will be more familiar with the product and are willing to engage in more learning. The following hypothesis is therefore formulated:

H3: The higher the level of brand awareness, the higher the probability of consumer innovation adoption.

1.4. What is the Country of Origin Image (CoI) and how does it influence consumer innovation adoption?

The construct Counrty of Origin Image originates from the Country of Origin (CoO) construct. The interest in CoO has emerged a long time ago and since then, several scholars have defined the product's country of origin as ‘'the country of manufacture or assembly.'' (Bilkey & Nes, 1982; Papadopoulos, 1993). Where CoO used to be defined according to the aforementioned definition or in terms of a ‘'made in –‘' label (Nagashima, 1977; Chasin & Jaffe, 1987),  in modern marketplace it can be complicated to define a product's CoO accordingly. This is caused by the growing number of multinational companies and the introduction of the hybrid products. Hybrid products are ‘'products that contain components or ingredients made in various countries'' (Baughn & Yaprak, 1993, p. 90).

Jaffe and Nebenzahl (2001) defined a hybrid product in terms of being composed of components sourced in multiple countries. These products affect the consumer's product evaluation because they might not be aware of the complexity of the manufacturer. Previous literature on hybrid products show that CoI is decomposed in the case of hybrid products. The Country of Assembly (CoA) or Country of Design (CoD) are considered cues for product quality and in some cases a negative CoA perception can be compensated by a positive CoD or the other way around (Jaffe and Nebenzahl, 2001)

Phau and Prendergast (2000) identify three phases in the development of CoO research. The first phase took place from 1965-1973 and was represented by single cue studies (i.e. CoO the only product to be manipulated). The second phase covered the years 1982-1990 and functioned as a basis to shift from single-cue studies to multi-cue studies as CoO effects inflated. Lastly, the third phase covered the years from 1993 up till now and addresses the increased number of hybrid products resulting in an increased interest in researching the relationship between the image of the country of manufacture and that of the country of national origin (Baughn & Yaprak, 1993).

2.4.1. From CoO to CoI

Roth and Diamantopoulos (2009) conclude that over the past decades of researching the CoO construct, focus has gradually shifted from assessing differences in product evaluations and preferences based on the national origin of a product to explicitly measuring the Country of Origin Image (CoI).

In Roth and Diamantopoulos' (2009) study, three different dimensions are distinguished that should be considered when analyzing the effect on purchase intention and highlights the complexity of and multidimensionality of the Country of Origin construct:

1. Country image (CI): defined in terms of the (general) image of countries

2. Product-country image (PCI): defined in terms of the image of countries and their products

3. Product image (PI): defined in terms of the images of products from a country

Several researches have tried to define the concept CoI as ‘'perceptions'', (e.g. Nebenzahl, Jaffe & Usunier, 2003), while others use ‘'impressions'' or ‘'associations'' (e.g. Van Ittersum, Candel & Meulenberg, 2003), ‘'stereotypes'' (e.g., Verlegh & Steenkamp, 1999), ‘'schemas'' (Askegaard & Ger, 1998) or even ‘'beliefs'' (Kotler, Haider & Rein, 1993). However, Roth and Diamantopoulos (2009) stress that even though none of these terms are wrong, they are not comprehensive enough to fully capture the construct of CoI. Brijs, Bloemer and Kasper (2011) add that CoI can be viewed as an operational concept consisting form a variable, a holistic network and a complex of beliefs, an attitude construct and a triple-component attitude construct. Therefore, they suggest that CoI should be assessed based on the attitude theory which is based on three dimensions, namely:

1. Cognitive: beliefs including schemas and stereotypes,

2. Affective: feelings and emotions,

3. Conative: intended behavior.

Fishbein and Azjen (1975, p.6) define attitudes as ‘'a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object''. Subsequently, it can be said that attitude theory captures three dimensions of the construct CoI. Firstly, because it can explain how countries are seen in the customer's mind and what their attitudes towards a country is (i.e., stereotypes and schemas). Secondly, it explains how this information is affecting their response toward a country (i.e., country conations). And lastly, because it explains how CoI converges and diverges with other constructs typically mentioned in previous CoO research.

1.4.2. CoI and consumer innovation adoption

A vast amount of studies has shown that CoI can affect consumers in a number of ways, namely: social status, store or product choice and perceived risk. Moreover, they have shown that CoI in particular affects product evaluation such as quality perception, product attitude and purchase intention (Papadopoulos, 1993; Huddlestone, Good & Stoel, 2001). Furthermore, several studies have concluded that the influence of CoI exists in both product assessment and decision making processes (Bilkey and Nes, 1982; Verlegh and Steenkamp, 1999; Solomun, 2014). Magnusson, Westjohn and Zdravkovic (2011) found that the perceived CoI of a brand strongly affects brand attitudes, regardless of the perceptions' objective accuracy. Fournier (1998) found that a strong emotional attachment to certain brands and products can result from relating a national identity to a product. Dodds, Monroe and Grewal (1991) defined purchase intention in terms of consumer's willingness to buy. Blackwell, Miniard and Engel (2001) add that intentions are subjective judgments about how we will behave in the future and therefore represent what we think we will buy.  Shao, Baker and Wagner (2004) conclude that purchase intent refers to a consumer's intention to purchase a product or patronize a service firm. Chandrashekaran, Rotte, Tax and Grewal (2007) found that satisfaction and purchase intention are strongly related to each other and point out that when consumers have a high level of satisfaction about what they have bought, there will be a stronger connection to their future purchasing behavior of a product. Sääksjärvi and Morel (2010) address that innovation adoption has often been operationalized as purchase intention.  Using Henard and Szymanski's (2001) meta-analysis as the most comprehensive and recent summary of empirical finding, Evanschitzky, Eisend, Calantone and Jiang (2012) conduct an update by analyzing articles published from 1999 through 2011 and find that a positive CoI has a significant positive relationship with product evaluation and purchase behavior.

Therefore, the following hypothesis is formulated:

H3: A positive Country of Origin Image yields a higher chance on consumer innovation adoption

...(download the rest of the essay above)

About this essay:

This essay was submitted to us by a student in order to help you with your studies.

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, . Available from:< > [Accessed 16.10.19].