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Moderating Effects of Nationality and Product Category on the Relationship between Innovation and Customer Equity in K orea and C hina
Author(s) -
Zhang Hao,
Ko Eunju,
Lee Euntaik
Publication year - 2013
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/j.1540-5885.2012.00990.x
Subject(s) - business , brand equity , marketing , product (mathematics) , product category , equity (law) , nationality , product innovation , advertising , mathematics , geometry , archaeology , immigration , political science , law , history
Innovation has become a key concept in recent decades. Truly innovative products can create value for consumers, extend the product category, generate higher margins, and strengthen the brand. Simply speaking, relationships may form between product innovation and each driver of customer equity. However, for different product categories and nationalities, this relationship may differ. This paper not only identifies the relationships between innovation and customer equity, but also examines the moderating effects of product category and nationality. In total, 409 consumers from K orea ( n = 200) and C hina ( n = 209) were surveyed by questionnaire in this study. The stimuli of the degree of innovation (i.e., radical or incremental) included N ike+ I pod and A didas 1, and N ike A ir M ax and A didas T eam S eries from the shoe industry, while H&M designer label and N ano material, and H&M seasonal collection and cycle material from the clothing industry. Structural equation modeling was used to test the hypotheses. The results show that the degree of innovation exerts positive influences on value equity and brand equity, which can be drivers of customer equity. Thus, the reason firms launch innovative products is not only to boost sales by increasing customer value, but also to improve brand image, which can influence the customers’ purchase decision. The relationship between innovation and customer equity can be moderated by product category and nationality. Managers should develop different innovation strategies based on different product categories and customer nationalities.