Newness, value and new product performance

Both consumers and organizations hold a dualistic attitude towards product innovativeness. Consumers are known to hold an inherent tendency to approach (neophilia) and avoid (neophobia) new food products at the same time. Similarly, at a managerial level it is not all that clear whether revenues of innovation strategies should come primarily from incremental or more discontinuous innovations. This paper reviews product newness in relation to new product performance. We describe studies that show that newness per se is not related to market performance but that it does so if it provides meaningful differentiation to consumers in the market place. We zoom in on the consumer perspective on how consumers respond to newness and briefly discuss three dominant approaches in the study of consumers and product newness. We then discuss how firms in their product development strategies and processes can enhance the likelihood that such meaningful differentiation is achieved. At a strategic level market orientation can be an important strategy to enhance product meaningfulness. At a more tactical level, we discuss problems with traditional approaches for idea generation and the fuzzy front-end of new product development