THE ROLE OF DEFAULTS IN PREVENTING INNOVATION REJECTION

Sabine Kuester (), Silke C. Hess () and Andreas Herrmann ()
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Sabine Kuester: University of Mannheim, Department of Marketing, Castle, D-68131 Mannheim, Germany
Silke C. Hess: Deutsche Telekom AG, Products & Innovation, T-Online-Allee 1, D-64295 Darmstadt, Germany
Andreas Herrmann: University of St. Gallen (HSG), Center for Customer Insight, Bahnhofstrasse 8, CH-9000 St. Gallen, Switzerland

International Journal of Innovation Management (ijim), 2015, vol. 19, issue 02, 1-23

Abstract: Innovation rejection remains a serious problem for companies introducing new products, as customers may overvalue products they already own and underestimate the innovation's advantage. Choice data from two experiments demonstrate that innovation rejection is determined by (dis)satisfaction with the status quo and that defaults are powerful instruments to overcome the status quo effect in innovation decision making. Innovation rejection decreases significantly if the innovation is implemented as a default, an option customers select unless they actively opt out. Furthermore, it is observed that implementing the innovation as the default significantly increases the perceived value and decreases the perceived risk of the innovation. Taking into account customer expertise, the authors detect that defaults are more effective in reducing innovation rejection for novices. The study derives managerial implications for new product launch management that aims at preventing innovation rejection.

Keywords: Innovation rejection; status quo bias; defaults; customer expertise (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S1363919615500231

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