Branding Next-Generation Products

Abstract:     
We study the effect of brand name selection on consumer perceptions and adoption of next-generation product innovations. In four experiments, participants evaluated next-generation offerings whose brand names either continued or interrupted the existing naming sequences. The first set of results show that while consumers anticipate enhanced performance on existing product features (i.e., alignable improvements) irrespective of the branding decision, a name change triggers significantly higher expectations of new features (i.e., nonalignable improvements). Next, we examined the implication of this finding for purchase intentions. The added layer of innovation inferred from a brand name change led participants to believe they were exposed to greater risk as well as greater reward. As a result, in the last two experiments we found that situational and dispositional factors influencing the relative salience of these conflicting beliefs ultimately determined whether a particular naming option stimulated or hindered demand.

Keywords: Next-generation product innovation, brand name selection, branding, structural alignment theory, consumer inference

Working Paper Series