Can all brands innovate in the same way? A typology of brand position and innovation effort

Abstract

Product innovation is vital to ongoing brand equity and has been responsible for revitalizing many brands, including Apple, Dunlop Volley, Mini, and Gucci. While several scholars have noted the relationship between a brand's position and the form of innovation available to a firm, surprisingly no study has sought to bridge this gap. This study aims to address this issue by, first, building a typology of the innovation practices underpinning differently positioned brands and, second, exploring the strategic and tactical implications of different brand-related innovation efforts. In so doing, this study addresses a critical question: How do differently positioned brands organize their innovation efforts? A multiple case-study approach was used in this paper. Cases were sampled from a number of industries and across a range of different countries with a focus on business-to-consumer brands. Thirty-five interviews were conducted across 12 cases. The brands studied differed in their approach to innovation (incremental vs. radical) and in their relationship to the marketplace (market-driven and driving markets). These two dimensions result in four alternative ways of organizing the innovation effort to effectively reinforce the brand: (1) incremental and market driven (follower brands); (2) radical and market driven (category leader brands); (3) incremental and driving market (craft-design-driven brands); and (4) radical and driving markets (product leader brands).For follower brands, new product success is contingent upon the quality of the firm's marketing information systems and speed to market. Category leaders seek to dominate and appeal to the mass market with bold product initiatives. Craft-designer-driven brands aim to maintain an aura of authenticity, downplaying the commercial realities of their innovation efforts, while product leader brands seek to reaffirm their status as industry pioneers. This research contributes to the branding and new product development literature in several ways. It illustrates that differently positioned brands require the deployment of different firm capabilities and resources and a unique organizational philosophy to achieve new product success. The findings also enrich the brand extension literature through an examination of alternate bases, beyond that of product category, by which brand fit can be established. Finally, this research demonstrates how brand positioning can pose limitations on an industry leader's ability to respond to disruptive technologies. This study identifies that failed new products or brand extensions are driven by a mismatch between desired strategy and the capabilities necessary for achieving success (suggesting brand extensions are not as low risk as previously thought). As such, managers should carefully attend to brand perceptions when developing innovation strategies, particularly in relation to brand extensions.