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Brand equity and the exacerbating factors of product innovation failure evaluations: A communication effect perspective

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  • Liao, Shuling
  • Cheng, Colin C.J.

Abstract

When both high-equity and low-equity brands experience an innovation failure, does the high-equity brand fare better? This study investigates this question by exploring how consumers view and evaluate brands following an innovation failure. The researchers examine whether brand equity, preannouncement of the innovation, and word-of-mouth from an opinion leader exacerbate or alleviate the negative impact of the failure. Two experiments with a total of 816 subjects show that high-equity brands suffer less than low-equity brands from the adverse effects of innovation failures. However, innovation failures are more detrimental to high-equity brands that have preannounced the innovation and to low-equity brands that do not receive supportive word-of-mouth from an opinion leader after the failures occur.

Suggested Citation

  • Liao, Shuling & Cheng, Colin C.J., 2014. "Brand equity and the exacerbating factors of product innovation failure evaluations: A communication effect perspective," Journal of Business Research, Elsevier, vol. 67(1), pages 2919-2925.
  • Handle: RePEc:eee:jbrese:v:67:y:2014:i:1:p:2919-2925
    DOI: 10.1016/j.jbusres.2012.10.001
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    References listed on IDEAS

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    Cited by:

    1. de Oliveira, Marta Olivia Rovedder & Silveira, Cleo Schmitt & Luce, Fernando Bins, 2015. "Brand equity estimation model," Journal of Business Research, Elsevier, vol. 68(12), pages 2560-2568.
    2. repec:spr:rvmgts:v:12:y:2018:i:4:d:10.1007_s11846-017-0235-2 is not listed on IDEAS
    3. Liao, Shuling & Chou, Cindy Yunhsin & Lin, Tzu-Han, 2015. "Adverse behavioral and relational consequences of service innovation failure," Journal of Business Research, Elsevier, vol. 68(4), pages 834-839.
    4. Adrian BRUNELLO, 2014. "Customer-Based Brand Equity – An Innovative Approach," THE YEARBOOK OF THE "GH. ZANE" INSTITUTE OF ECONOMIC RESEARCHES, Gheorghe Zane Institute for Economic and Social Research ( from THE ROMANIAN ACADEMY, JASSY BRANCH), vol. 23(1), pages 73-81.
    5. Jahanmir, Sara F. & Lages, Luis Filipe, 2016. "The late-adopter scale: A measure of late adopters of technological innovations," Journal of Business Research, Elsevier, vol. 69(5), pages 1701-1706.
    6. repec:dob:journl:v:10:y:2018:i:2:a:3 is not listed on IDEAS
    7. Heidenreich, Sven & Kraemer, Tobias & Handrich, Matthias, 2016. "Satisfied and unwilling: Exploring cognitive and situational resistance to innovations," Journal of Business Research, Elsevier, vol. 69(7), pages 2440-2447.
    8. Fayez Bassam Shriedeh & Noor Hasmini Abd. Ghani, 2016. "Innovation`s effect on brand equity: Insights from medical tourists," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 6(8), pages 176-184, August.

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