Product Innovativeness Dimensions and Their Relationships with Product Advantage, Product Financial Performance, and Project Protocol

Abstract

A considerable body of research informs the relationship of product innovativeness with firm and environmental variables as well as the impact of product innovativeness on product financial success. While providing significant insight, the extant literature exhibits conflicting findings that raise questions as to how, specifically, product innovativeness contributes to product financial performance. This study ties together several streams of research related to the product innovativeness construct to enhance understanding of the product innovativeness—product financial performance relationship. The product innovativeness construct is deconstructed by conceptualizing the relationships among three dimensions of product innovativeness: technological discontinuity, marketing discontinuity, and customer discontinuity. Product innovativeness is distinguished from product advantage, and the relationships among product innovativeness dimensions, product advantage, and product financial performance are empirically tested. The results reveal that, indeed, product innovativeness consists of three separate dimensions that exhibit no or moderate correlations with product advantage. Furthermore, product advantage positively and marketing discontinuity negatively influence product financial performance. Finally, the study also examines how project protocols impact the product innovativeness dimensions. Project protocols, also known as product definitions, describe the general parameters a new product should exhibit (i.e., target segments, product functions and features, base technology, pricing, communication and distribution channels, and required resources) as well as the priorities of the general parameters. Because they guide product design and set priorities and have been found to be a dominant driver of product financial performance, project protocols are important. The present study enhances understanding of how project protocols influence the dimensions of product innovativeness, finding that project protocols positively impact product financial performance indirectly through product advantage and marketing discontinuity.