Investigating the Performance Impact of Newness from a Design Perspective

Product innovativeness is regarded as a critical construct in new product development research (e.g., Avlonitis et al., 2001; Danneels and Kleinschmidt, 2001). Several researchers have focused on the issue of conceptualizing and measuring innovativeness (e.g., Green et al., 1995). However, product innovativeness is very rarely assessed from a design perspective. This fact is surprising, especially when considering that in many markets new products are very similar in technological features, but compete on the product design (Veryzer, 1995). Drawing from different literature streams, such as design and consumer research, we build an argument for why product innovativeness both from a design and technology perspective may impact sales performance of new products. In order to investigate these effects, we conducted a study based on a sample of 157 new car models launched in the German market between 1978 and 2006. For measuring both innovativeness dimensions, different data collection methods are combined, such as expert interviews, expert ratings, and document analyses. Responding to recent calls for more objective performance metrics (Sourescu et al., 2003), actual sales data are used as a performance measure. The results of our study demonstrate that product innovativeness is a relevant driver of new product performance. Firms in the automotive industry who launch more innovative new products are able to generate higher sales with these products compared to their less innovative competitors. In particular, the results lend support to our suggestion that design newness is a relevant dimension of product innovativeness. The finding that design newness has a significant effect on car sales, underlines the importance to consider a design perspective when assessing product innovativeness and its performance effects.