Key Topic: Innovativeness

Running head: DISCUSSION BOARD FORUM 1 – INNOVATIVENSS 1

Discussion Board Forum 1
Innovativeness

Liberty University

Innovativeness

Key Concept Explanation

Innovativeness is an aspect of customer value in the perception of consumer products. In

definition, an innovation is “an idea, practice, or object which is perceived as new by the

individuals or other units of adoption” (Shams, Alpert & Brown, 2015, p. 1591). Innovativeness

may take the form of reengineering existing products in order to create something unique. It

may involve a drastic change in technology and how we accomplish tasks in our day-to-day

lives. Our societal existence is deeply rooted in the idea of innovativeness, from the advent of

the telegram to the smart phone, from the wheel to the airplane. The degree of innovation is

largely tied to the success of any business venture.

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

Comparison

Innovativeness is a key component to the value stream of any production system.

Take for instance the service industry. As recently as 1970, the service industry represented

approximately 20% of the gross domestic product in the world’s developed countries. Forty

years later, through a period of increased innovation, the share has ballooned to 70% (Dotzel,

Shankar & Berry, 2013). With that said, to the individual consumer, “innovation is only new if

it is perceived to be new” (Lowe & Alpert, 2015, p. 1). The demand curve is greatly influenced

by not only the existence of innovation, but also the understanding of how this new idea, service,

product, etc. will be beneficial (creating value) to the consumer. Similarly, in the hospitality

realm, research as provided a direct correlation between hotel innovativeness and the perception

of the benefits thereby presenting a distinct market advantage (Sandvik, Duhan & Sandvik,

2014). In order to attract more customers in the 1980s, any hotel/motel worthy of your stay

would boast “Free HBO” on the marquis. Through innovation, “Free Wifi” is more sought after

than the aging movie channel. The investment required to install wireless internet routers

throughout the property was negated by the idea that consumers desired this innovation

engineered into their overnight accommodations. This idea of consumer expectation is a

common theme throughout the research conducted with regard to innovativeness.

Article Summary

In the European Journal of Marketing, authors Rahil Shams, Frank Alpert and Mark

Brown discuss the concept of innovativeness through the prism of ‘branding’ in the article

entitled “Consumer Perceived Brand Innovativeness” (2015). In their study conducted at a large

Australian university, the students were asked how consumers perceived innovativeness with

regard to brand. Additionally, they developed a Consumer Perceived Brand Innovativeness

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

(CPBI) index that measures “consumers’ perception of a brand’s track record of product

innovations, degree of creativity, and potential for continued innovative activity in the future in a

given market” (Shams, Alpert & Brown, 2015, p. 1594). The purpose being to enable an

accurate assessment of how creative and cutting-edge a brand is in the mind of a target market.

The results revealed that consumers associated innovativeness to certain brands with marginal

regard to First-to-market technology but more toward those that convey a consistent, strategic

approach of demonstrating innovativeness through marketing language, physical features (color,

name, look, etc.) and multi-media presence. The authors conclude that established companies

that hold a high CPBI rating are not as affected by those Second-to-market imitators as one might

have thought. This measurement allows managers to determine whether existing marketing

strategies are adequate or whether to change their positioning on innovativeness. Additionally,

the index provides the ability to identify which attributes influence the perception of

innovativeness most accurately.

Biblical Integration

All throughout His Holy Word, God is the source of all innovativeness, and it is through

Him that we are able to transform our ideas into actionable and material use. “In the beginning,

God created the heavens and the earth” (Genesis 1:1, ESV). Not lost in this passage is the

creativity of our Creator, who has endowed us a similar ability to shape our environment. This is

described in Mark 2:21-22 (ESV) with the concept of utilizing new wineskins for the continued

aging process of new wine. Moreover, Paul encourages us not to be “conformed to this world,

but be transformed by the renewal of your mind, that by testing you may discern what is the will

of God, what is good and acceptable and perfect” (Romans 12:2, ESV).

Application

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

As recently as the turn of the 21st century, the consumption of most all music still

required buyers to purchase compact discs to enjoy their favorite songs. The mass production of

inventory, sleek packaging, distribution logistics, and store shelf placement was part and parcel

with selling music. All of this changed however (and in an extremely short window of time), in

an effort to maintain competitiveness through innovation. Today, companies such as Apple have

revolutionized the way we consume music through digital, mobile technology. In hindsight, this

transition was inevitable. However, the development, adoption, and commitment of new

technology and innovation can be an extremely risky proposition for any company, and the

returns are not guaranteed. Therefore, the characteristic mark of any highly innovative company

is the inherently high assumption of risk (Ruvio, Shoham, Vigoda-Gadot & Schwabsky, 2014).

Annotated Bibliography

Dotzel, T, Shankar, V. & Berry, L. (2013). Service innovativeness and firm value. Journal Of

Marketing Research, 50(2), 259-276. Retrieved from http://ezproxy.liberty.edu/login?

url=http://search.ebscohost.com/login.aspx?

direct=true&db=bah&AN=86184852&site=ehost-live&scope=site

The authors discuss how innovativeness in the service industry is utilized to increase

customer satisfaction and value by assuming a certain level of risk. They maintain that in

this industry, there are two enablers of innovations: Internet and people. They use a

model to examine the level of satisfaction, risk, value in the relationships between

internet-related innovations and direct personal interface with people by utilizing date

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

from over 1,000 innovatons over the past five years. The results from this study conclude

that innovation involving face-to-face interaction has an overall impact on firm value

through customer satisfaction, and yet internet innovations are more directly tied to an

increase in firm value.

Lowe, B. & Alpert, F. (2015). Forecasting consumer perception of innovativeness. Technovation,

45(1), 1. Retrieved from

http://www.sciencedirect.com/science/article/pii/S0166497215000103

In this article, the authors examine how consumers regard whether or not a product is

innovative and how this determination is made. They also discuss how this perception

influences their purchasing behavior. This article explains how a study of ‘Consumer

Perceived Innovativeness (CPI) identifies the relationship between consumer habits and

firms that extoll innovation by utilizing qualitative research and quantitative surveys. By

this research, the authors surmise advances in product development as a consequence of

CPI and not merely a dimension. Thus, it is expected to provide actionable intelligence

to innovative managers with regard to developing output that will surpass the creativity

level of others.

Ruvio, A. A., Shoham, A., Vigoda-Gadot, E., & Schwabsky, N. (2014). Organizational

innovativeness: Construct development and cross-cultural validation. Journal of Product

Innovation Management, 31(5), 1004-1022. doi:10.1111/jpim.12141

In the Journal of Product Innovation Management, the authors explain the concept of

Organizational Innovativeness. In it, they offer five dimensions that constitute effective

Organization Innovativeness: creating value with a useful, new product or service,

organizational openness with regard to adopting new ideas or concepts, future orientation

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

or the preparedness of a firm for innovative changes, the degree to which managers will

assume risk, and lastly, the proclivity of a firm to be proactive in pursing emergent

business opportunities. The operational utilization by way of framing Organizational

Innovativeness into these five areas support new direction with regard to research and

development along with guiding strategy.

Sandvik, I., Duhan, D. & Sandvik, K. (2014). Innovativeness and profitability. Cornell

Hospitality Quarterly, 55(2), 165-185. Retrieved from

http://journals.sagepub.com.ezproxy.liberty.edu/doi/full/10.1177/1938965514520963

Is there a direct link between the creativity and innovation of hotels and their long term

monetary success? Norwegian professors Izabela L. Sandvik, Dale F. Duhan and Kåre

Sandvik propose that this innovation, coupled with the ability for customers to

understand and appreciate it, is correlative to maximizing profit. They discuss the anemic

volume of research study involving this relationship in the hospitality industry,

accounting for past theoretical and methodological shortcomings, and highlight a new,

comprehensive study all their own. In a sample of almost 300 hotels in Norway, the

authors validate their theory that a correlation exists between innovativeness and

profitability.

Shams, R., Alpert, F., & Brown, M. (2015). Consumer perceived brand innovativeness. European

Journal of Marketing, 49(9), 1589-1615. Retrieved from http://ezproxy.liberty.edu/login?

url=http://search.proquest.com.ezproxy.liberty.edu/docview/1707071365?

accountid=12085

The authors discuss the concept of innovativeness through the prism of ‘branding’ in

relation to their study where students were asked how consumers perceived

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DISCUSSION BOARD FORUM 1 – INNOVATIVENSS

innovativeness with regard to brand. Additionally, they developed a Consumer Perceived

Brand Innovativeness index that measures “consumers’ perception of a brand’s track

record of product innovations, degree of creativity, and potential for continued innovative

activity in the future in a given market”. The results revealed that consumers associated

innovativeness to certain brands with marginal regard to First-to-market technology but

more toward those that convey a consistent, strategic approach of demonstrating

innovativeness through marketing language, physical features (color, name, look, etc.)

and multi-media presence. This measurement allows managers to determine whether

existing marketing strategies are adequate and provides the ability to identify which

attributes influence the perception of innovativeness most accurately

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